These are difficult times for US retailers. Iconic names like Macy’s, Sears and JCPenney have been shuttering hundreds of their stores at a rapid clip. Credit Suisse sector analysts predict that US retailers will close more than 8,600 locations this year alone—more than were lost during 2008, the low point of the Great Recession. And it’s not just the classic icons of retail that are closing shops, either; youth-oriented, putatively agile fashion brands like teen retailer rue21 announced the closure of 400 of its mall stores, as well. And stores like rue21, The Limited (which closed all its stores and which has gone out of business altogether), American Apparel, bebe (which is closing all 170 of its stores to focus on increasing its online sales), Wet Seal and Abercrombie & Fitch were all heavily invested in music playback systems; that suggests that simply putting in some hip-hop and a few subs isn’t cutting it anymore with that critical consumer market.
But can AV still give brick-and-mortar retail a boost? More than a few companies that work in that sector seem to think so, and they’re reaching out to retailers. For instance, Ingram Micro, a wholesale technology distributor, sees AV as still critical to engaging customers, building brands, improving customer experiences and training staff.
“For a growing number of customers, this type of engaging, immersive experience is simply expected,” the company proclaimed on its website. “As consumers become increasingly comfortable with, and reliant upon, digital technology in their day-to-day lives, they will continue to expect to encounter technology throughout their shopping and entertainment experiences.”
Creating An Opportunity
Frank Pisano, Director of Sales for the digital signage group at Milestone, the parent company for brands that include Chief, Da-Lite, Projecta, Sanus and Vaddio, said that the recent Digital Signage Expo in Las Vegas NV underscored that retail’s downturn is creating an opportunity for digital signage and video in consumer stores. “The retail market is ripe for the growth of digital signage,” he stated. “Interactive displays and strategic positioning of signage and video can have a huge impact on customer engagement and sales.”
Pisano said that the trade show presented a plethora of “Minority Report”-like technologies that can recognize gender, read faces, gauge emotional reactions and steer customers toward sales opportunities in stores; however, properly positioning those interactive displays is critical. “Integrators need to be aware of three things when it comes to mounts,” he said. “They need to be safe and secure. We’re putting them more often into traffic areas, and they have to be able to withstand being knocked into without shifting or falling down. They have to fit the aesthetic of the stores they’re used in. You don’t want the display systems to distract from the message they’re being used to convey. And they need to be able to be installed, maintained and updated easily and, preferably, remotely for those last two. When it’s not working properly, an interactive display can have as much negative impact as it can have positive impact when it’s working like it should.”
And AV needs to go big in retail now, Pisano added. “A 46-inch display hanging on a wall doesn’t create much excitement anymore,” he said. Floor-to-ceiling videowalls get attention, as do displays mounted in unexpected orientations. “The displays are becoming part of the sales-floor fixtures,” he added.
Retailers Look For Solutions
PingHD, a Denver CO-based content development company, has seen retail take on a larger share of its market in recent years, and Kevin Goldsmith, CTO, believes that the current pullback in retail’s fortunes might well accelerate that, as retailers look harder for solutions to turn around trends. “Retailers are historically…frugal,” he said, carefully choosing his words. “But the cost barriers of technologies like digital signage are coming down, so that should help encourage their use of them.” He cited the integration of chip-based media players into LG and other brands of commercial displays, which, he said, should increase uptake of in-store video and signage. PingHD has also done content development for high-end outdoor-products retailer Marmot. The content plays on 32-inch interactive displays in its stores, promoting products—for example, tents—that would take up too much valuable floor space to practically demonstrate. He also expects to deploy beacon technology in retail environments in the near future; it will target individual consumers through their mobile devices.
And digital signage offers significant scalabilities that can increase the ROI for retail users by allowing them to update information, such as pricing, globally and immediately; this increases their ability to respond to competitors’ moves and avoid incurring regulatory wrath when sale items run out before their special pricing can be adjusted. PingHD now also offers those and other signage platforms through an integrator channel it’s been developing over the last several years, and Goldsmith reported that response from integrators has been solid.
However, although retail’s current travails might present an opportunity for AV integrators and content developers, Goldsmith acknowledged that it might not necessarily be a windfall. He cited market research by a hardware retailer that indicated, of every 1,000 shoppers who enter its stores, only 15 of them have installed the retailer’s smartphone app. “That sort of uptake needs to be improved,” he said. “That’s a real challenge.” And certain bellwether retailers, whose leads the rest of the market tends to follow, often focus their AV mainly on their flagship outlets.
That makes it harder to scale it to smaller stores, Goldsmith added, thus potentially eroding consumers’ expectations for the in-store experience. And there is also the possibility, remote as it might now seem, that, as the cost of AV products and services declines over time, some retail environments could become awash in video; the “trees” retailers would like to sell could be hidden amid a “forest” of visual dazzle. And retail today takes many forms: from traditional big-box stores, to boutiques, to popups, to stores inside other stores. That, said Goldsmith, can make matching AV solutions with specific retailers a continuously moving target. “Retail is one of the more challenging verticals in general,” he stated. “AV technology can both help and hurt it, depending on how it’s implemented.”
AV Technology Instead Of Inventory
Some integrators are trying to find that balance. From its base halfway between Atlanta GA and Greenville SC, Georgia integrator RPAV has built a strong base of retail-sales clients, including national department stores and big-box chains. James Foxen, Operations Manager, conceded that retail’s relationship with AV is changing; however, it’s not disappearing. As stores get smaller, Foxen said RPAV is presenting retail clients with kiosks that use touchscreen displays that sit in stores, displaying the merchandise while decreasing the need to keep every color and variation of every product on the shelves.
“Customers can try on clothes and, if they’re satisfied with the fit, they can order the exact version of it they want through the kiosk, and it will be delivered directly to them at home,” he explained. “What AV like this can do is get the customer into the store and then make the shopping experience be truly in-person, but make the buying and delivery processes more like the online experience they’ve become used to.”
Brian Edwards, CEO of Los Angeles CA-based Edwards Technologies (ETI), has been a solutions vendor to Apple and other high-tech retailers, as well as theme parks like Disney and Universal, both of which have retail stores as part of their properties. But Edwards isn’t necessarily bullish on AV’s future in the retail vertical. “AV as a standalone component in retail environments is pretty much done with,” he declared. “You can put some speakers in a store, but that’s not what’s going to engage and motivate shoppers today.”
Edwards said that some advanced technologies, such as facial, gender, age and emotional recognition software, mounted on digital signage and surveillance systems, can help retailers better identify types of customers. However, he believes that retail will see much better and deeper engagement through custom apps on personal mobile devices. Those platforms (such as ETI’s Videro, which combines video, audio and web content playback, media storage, show control, lighting control, digital signage, event management and on-the-fly personalization into one streamlined and integrated application) can go beyond individual engagement. For instance, car maker Mercedes uses Videro in Germany to match pre-owned cars with buyers, drawing on cloud-stored inventory.
Not Totally Convinced
Edwards isn’t totally convinced that conventional AV is too old-school for modern retail needs. ETI was involved last year in implementing a version of Videro powering videowalls at UK furniture retailer DFS’ locations as a way to reduce space needed for inventory (www.sndcom.us/2t37utd) by letting customers browse styles and colors virtually. But, he does see it as having moved into the technological equivalent of a postmodern phase, as elements such as displays and media players become one, while continuing to drop in price. Meanwhile, they’re eclipsed in significance by personal mobile devices as ways to reach consumers. “We just finished a WaterWorld attraction for Universal that uses 60 channels of audio, all of it from one Mac mini computer, costing about $1,000. Five years ago, it would have taken an entire rack of equipment. That same effect is happening to retail now. We just did a new Macy’s in [Westfield CA’s] Century City Mall, and there are virtually no video screens in it; so, looking at just AV as a solution is really no solution at all. The AV has to be part of something bigger.”
Retailers will still embrace the bombastic aspects of AV, such as large screens, interactivity and big sound, but they seem to be reserving those investments for their flagship stores in major media centers like New York NY and Los Angeles. That’s because, according to Kyle McCane, Vice President of Enterprise Accounts at AVI-SPL, those premium stores are looked at as promoting the brand, rather than individual products. “Brands aren’t forgetting about their ‘factory’ or outlet or mall stores,” he said, “but they’re reserving their larger AV investments for their showcase stores.”
McCane described a recent refresh of a major brand’s flagship store in lower Manhattan that uses large Planar videowalls, whose immersive size and content is intended to put shoppers into the environments in which they plan to wear the clothes and accessories. To enhance the effect, AVI-SPL used off-the-shelf 3D motion sensors to sync shoppers’ movements with the onscreen content; for instance, running shoes can be “experienced” (instead of merely being tried on) by stepping on a treadmill that adjusts its angle as the video takes the runner up and down hills. A basketball experience in the same store is just as effective, although a Plexiglas screen was placed in front of the videowall to prevent damage to it when the experience gets a bit too real.
McCane doesn’t dispute Edwards’ predictions about retail moving deeper into engagement through shoppers’ own mobile devices, but he believes that, as long as retailers want to promote their brand above all else, AV will continue to be a major strategic component for flagship stores.
“The ROI isn’t from the products so much as it is from the overarching brand’s value,” he asserted, underscoring the cultural shift ahead for AV. “Understanding that is critical to understanding what retailers will need from AV in the future.”