UK DIGITAL SIGNAGE SURVEY SEVENTH EDITION: JANUARY 2011 An essential reference point for any retailer, brand, or manufacturer, using (or considering) in-store digital signage. An independent research document conducted and produced by PoPAI uk & Ireland ltd and sponsored by lg electronics.

Contents 1. Management Summary 2. Introduction 3. Scope 4. Methodology 5. Frequently Asked Questions 6. Summary 7. Retailers & Brands - Analysis 8. Shopping Centres - Analysis

1. Management Summary Overview The UK Digital Signage Survey (now in its seventh edition) attempts to identify where and how UK retailers are currently using digital signage (display screens) in place of or in addition to traditional Point of Purchase. It also polls the attitudes of retailers, brand owners, shopping centres and network operators, including their plans and reasons for using digital signage in the future. Screen usage • There are 111 retail screen networks currently in operation in the UK (versus 93 in 2007). • There are 131,560 screens in situ (versus 102,582 in 2007, an increase of 28%). • Most retailers using screens in 2007 have subsequently increased the number of screens in situ. • The screens are spread across 47,000 retail outlets, with an average of 3 per store. • Where networks are in place, around a third of the retailers’ branches have screens in situ. • Most screens are wall mounted. Hardware • Most screens are at least 32” in size. An increasing number of retailers (13.8%) are using 65” screens. • LCD is the most common type, with use of LED screens increasing. • Approximately two thirds of all screens operate mute (without sound). • The number of interactive screens has remained fairly constant, at around 10%. Content • Most retailers operate only one channel, and live feeds and localised content are becoming increasingly popular. • ‘Promotional Messages’ and ‘Retailer branding’ are the most popular content types. • Content is being updated more frequently than in the past (weekly versus monthly). • Most content is now delivered to the screens using ADSL and is the responsibility of the Marketing department. Attitudes • ‘Sales Uplift’ is deemed the most important attribute of screen usage. • Over a third of retailers currently using screens are planning on extending their networks. • Touch screens are a potential growth area, with 30.5% of retailers likely to use ‘single touch’ screens in future and 17% looking at ‘multi-touch’. • Many of the retailers not currently using screens are ‘considering using them’ in the future. Shopping Centres • 44 shopping centre networks have been identified (versus 12 in 2007). • The number of screens in situ has seen a threefold increase (from 160 to 469). • Content is primarily delivered via PC/LAN and not ADSL (as with retailers). • Supplier branding features more heavily on shopping centre networks. • Ad revenue generation is more important to shopping centres than retailers. • Content is generally updated less frequently than by retailers.

2. Introduction Welcome to the 2011 edition of the UK Digital Signage Survey, sponsored by LG Electronics. There has been a great deal of change since the survey was last conducted in 2007… a global recession, a brand new government, the closure of some of the best known high street retailers, the steady growth of internet shopping, and developments in technology to name but just a few. All of these factors have directly or indirectly played their role in the landscape of UK retailing, and it could be argued that they have also influenced (at least to some extent) the development of digital signage in UK retail. A changing landscape UK retailing never stands still, and there have been numerous developments to the High Street since the last survey was conducted, with famous names such as Borders, Threshers, and Woolworths now consigned to history. These store closures have had limited impact on the number of screens in situ (though Woolworths and Borders did operate a relatively small number of screens in several stores). Closures such as these do however demonstrate the potential scale and pace of change within this dynamic sector.

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The UK’s largest retailer Tesco, was famously one of the first UK retailers to implement a major retail screen network, launching ‘Tesco TV’ in 2004. The network was withdrawn in 2009, as “the screens had come to the end of their operational life”. The removal of 5,000 screens represented the potential for a significant decline on the 2007 figures, accounting for almost 5% of the total at the time. Other developments include business closures, acquisitions and takeovers. These can result in both the development of new screen networks, or the closure of existing networks. A notable example is the re-branding of Abbey and Alliance & Leicester branches to Santander, and administration of the Avanti Screen Media Group. Enhancements for the 2011 survey To ensure consistency, the 2011 survey remains largely unchanged from the 2007 version. The digital signage industry does not stand still however, and there have been a number of technical developments over the last few years. To gain a better understanding of screen usage, some additional information has been captured, notably: • The location of screens in store. • The type of screens used (i.e. products designed for domestic or commercial use). • A further breakdown in the size of screens used (to accommodate new larger displays). • The inclusion of 3D and other new technologies. • Attitudes towards the importance of manufacturer brands of screen.

3. Scope Definitions ‘Digital signage’ refers to a ‘display screen’. A ‘screen’ can be defined as any surface used to display a sequence of still or moving electronically generated images. This includes traditional (CRT) TV’s and monitors, Plasma screens, TFT screens, LCD screens, LED (Light Emitting Diode) displays, and projection systems. A ‘screen’ may also have added interactivity such as ‘touch sensitivity’ or ‘button driven’ content. The ‘UK retail sector’ is defined as any outlet or business selling goods, merchandise, or services directly to the public for personal or domestic use, from premises within the United Kingdom. A ‘shopping centre’ is defined as a location (usually under cover) comprising of multiple retail outlets, where the primary function of the visitor is to perform a multi-stop shopping trip. Participants • The key respondents in the UK Digital Signage Survey are UK retailers, brand owners, shopping centres, and network operators. • It is important to differentiate these participants. Broadly speaking, they can be sub divided into two categories; those currently using screens, and those not currently using screens. • Given that the main objective of the survey is to monitor screen usage within the UK retail sector, focus was placed on contacting larger chain retailers who are known to be operating screen networks. • As such, 84.1% of respondents currently use screens in their stores, and the results of the survey should be taken aboard with this in mind. Most of these retailers will have first hand experience of the medium, and the majority polled each operate more than 100 branches across the UK. • A secondary objective of the survey is to gauge the opinions towards the future of digital signage. In this instance it is necessary to include the views of both those currently using screens and those not currently operating screens. Qualification criteria The survey focuses on screens used in place of (or to compliment) traditional Point of Purchase. In order to be included in the results, the following qualification criteria are to be fulfilled (where possible): 1. The primary application for the screens is the promotion of products and/or services. 2. The screens are customer facing and positioned inside the store or shopping centre. 3. The screens are installed on a permanent basis (generally a minimum of 1 year). 4. The store, branch, outlet or shopping centre is located within the UK.

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Areas not covered A number of screens are not measured within the survey. Examples would include; screens used within a ‘trade only’ environment, ‘information only’ systems, and screens used primarily for entertainment. Generally speaking, if the screen message is not intended to initiate a sale of a product or service, then it will not be included in the survey (see examples listed below). This area is currently the subject of some debate amongst network operators. As such, the scope of future surveys may be extended to cover some of these applications. • Transport (airports, aeroplanes, buses, trains, taxis). • ATMs (indoor or outdoor). • Entertainment (bookmakers, casinos, cinema screens, gambling machines). • Estate agents. • Lifts/elevators. • Outdoor signage (electronic billboards). • Shelf edge labels (monochrome EPOS price systems). • Public information systems (departure and arrival times, ticket machines, vending). • Trade only outlets (e.g. ‘Cash & Carry’). The impact of electrical retailers When is a screen not a screen? It’s a simple enough question, but one that becomes more complicated when examined more closely. Take electrical retailers for example. A large branch of an electrical retailer may have over 20 computers on display, more than 30 flat screen TVs, and numerous other devices such as mobile handsets and game consoles… in some cases well over 100 different screens in just the one store. This poses an issue for the survey. If these screen numbers are to be included, it may result in a misleading picture, however these screens are too numerous to ignore. To address this issue, the results for electrical retailers have been isolated and presented individually. Other considerations It is impossible to survey every individual screen in every UK retail outlet. Focus has been given to ‘high street name’ retailers with multiple stores (in most cases over 100 branches). The number of screens recorded in the survey is likely to be a conservative figure versus the actual number of screens in situ. Extraction of data is also becoming increasingly harder as businesses are bound by data protection and privacy agreements (notably more so than in 2007). This has suppressed response levels to some extent; nevertheless over 100 respondents have contributed to the survey, which represents a credible sample size. A number of participants were unwilling or unable to answer all questions posed. Where questions were not answered, this has been taken into account when calculating response totals.

4. Methodology Data for the survey (phase seven) was captured during October 2010 as follows: Preparation – identify target respondents A list of target respondents was established from POPAI’s membership list and database, the LG Electronics database, and from a list of respondents to previous surveys. These included retailers, brand owners, network operators, and shopping centre operators. The job title of those approached included; Marketing Director, Marketing Manager, Communications Manager, Operations Manager, Store Designer, and Brand Manager. Each individual was contacted by telephone and (where possible) an email address obtained. Desk research – identify additional networks in situ Desk research was used to identify newly installed networks. This involved researching trade & industry press magazines and website articles. It is worth noting that the results did not include figures from industry press articles unless the retailer or network operator later verified these. Data capture – website survey A HTML email campaign was delivered to the target respondents on behalf of POPAI (inviting them to participate in a web version of the survey). The website survey contained 28 questions, the majority of these being ‘multiple choice’. As an incentive to participate, each respondent is rewarded with a complimentary copy of the survey findings (normally £295 plus VAT) and is entered into a prize draw to win an LG HD LED TV.

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Follow up – telephone The telephone follow up took place shortly after the email campaign was issued. The primary purpose of the follow up was to increase response levels. In certain instances, the telephone follow up was also used to confirm screen numbers or to sense check information entered into the survey. This resulted in some responses being removed from the results (for example where the screens in situ did not meet the qualification criteria outlined earlier). Follow up – field visits To give a cross section, two key locations were selected; Kingston Upon Thames and Manchester. In both instances, a tour of the central shopping areas (including shopping centres) was conducted. Where screens were present, numbers and type were noted, as well as the content type. Once again, if a new network was identified, the network operator was approached by the telephone follow up team and the figures added to the survey results as appropriate. If the retailer could not be contacted or refused to participate, then no data was recorded. Presentation of results Previous research suggests that the reason for operating a screen network is quite different for retailers and brands versus shopping centres. For this reason, the shopping centre results have been isolated, and are shown separately.

5. Frequently Asked Questions What is the UK digital signage survey? The ‘UK Digital Signage Survey’ is widely regarded as the most comprehensive and accurate measure of digital signage within the UK retail sector. It offers a ‘snapshot’ of where, when, how and why display screens are being used by retailers. What is the history of the survey? The survey (now in its seventh edition) was first conducted in November 2004. At the time, the scale of screen usage was unclear (industry estimates placed the total number at around 11,000). The survey identified an actual figure of 57,739 screens across 11,384 retail locations. Each instalment of the survey has subsequently become more comprehensive. The latest summary report includes data on screen usage (broken down by retail sector), a measure of interactivity, screen types, screen locations, funding sources, content delivery, retailer attitudes, and future plans for the technology. Contributing parties are also becoming more familiar with the value of the survey, and are increasingly requesting copies for internal and external presentations. What are the objectives of the survey? Primary objectives 1. To establish the number of networks and screens in operation within UK retail. 2. To identify why, where, when, and how retailers are using use screens. 3. To ascertain the type of hardware in use. 4. To understand content update frequency and method. 5. To examine the primary funding methods for networks and screens. Secondary objectives 1. To gauge opinion on the usage of screens (both current and planned). 2. To highlight interesting developments and case studies. 3. To offer predictions on the future use of screens. Who is the survey aimed at? The survey is aimed at key decision makers within UK retail sector, primarily those involved with in-store communication and marketing. It will be especially useful to retailers using or considering using screens to promote their products or services. The primary audience will have an interest in Store Design, Store Marketing, Customer Communications, or Retail Operations. The report will also benefit those working for Manufacturers or Suppliers of UK retailers looking to promote their products in-store. Typically this will involve those responsible for Point of Purchase or Merchandising. Interested parties might also include; Brand Managers, Trade Marketing Managers, and Marketing Directors. Finally, the report will be of interest to anyone seeking to understand how UK retailers are using screens to complement (or as an alternative to) conventional Point of Purchase. Who compiles the survey? The survey is compiled by POPAI UK & Ireland Ltd a not-for-profit organisation and is sponsored by LG Electronics. Please see ‘About the sponsors’ for more information.

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Who participates in the survey? The survey is distributed to a large database of key contacts at major UK retailers, brand owners, shopping centres and screen network operators. The majority of respondents are UK retailers or network operators. How accurate is the survey? It would be impossible to get a 100% accurate figure of screen usage without visiting every retail store in the UK (clearly this is not practical, and even if it were, the figure would change daily). As with a lot of research, the results from the survey are only intended to offer the reader an overview. That said, the survey is arguably the most accurate gauge of screen usage in the UK currently available (with over 100 network operators surveyed). In addition, cross checking the results of the web survey with store visits and industry press coverage gives the survey extra depth and helps to build a clearer picture. What about confidentiality? Many retailers are (understandably) reluctant to share their strategy or sensitive business data, and the usage or investment in screen technology is no exception. To address this concern (and to protect the interests of individual companies) all figures shown are cumulative, and confidential data is not shared. For example, although recorded, the number of screens an individual retailer has in situ will not be published. This number will instead be added to those from other retailers to show the total results for the sector that the retailer operates in (e.g. ‘Fashion’). This protects the identity of individual companies and helps to maximise participation in the survey. The only instance where retailers are named individually is within the commentary (where this information has been obtained by store visits and is already in the public domain). The survey complies with the 1998 Data Protection Act and no confidential data is published or passed on to any third parties. A copy of the POPAI UK & Ireland Ltd privacy policy is available on request. How can I obtain further copies of the report? The summary report is made available free of charge to survey participants, members of POPAI UK & Ireland Ltd and clients of LG Electronics. Non-members/participants can purchase a copy of the report at the full retail price of £295 plus VAT. Can I participate in future surveys? Absolutely. This survey would not be possible without the cooperation of major retailers and brands. As well as receiving a free copy of the survey results, participants are entered into a prize draw to win an LG HD LED TV. Please contact POPAI UK & Ireland Ltd to be added to the contact list for the next survey.

6. Summary The past Each phase of the UK Digital Signage Survey produces an increasingly accurate impression of the number, type, and usage of screens in the UK retail sector. It has been three years since the last edition of the survey, and there has been much change in this time. Positive influences include some interesting developments in technology and a continuing decline in the cost of hardware. The present Since the first survey in 2004, the number of screen networks has grown significantly. • There are now 111 networks in operation. • There are currently 131,560 screens in situ (an increase of 28% on 2007 figures). • The screens are spread across 47,000 retail outlets, with an average of 3 per store. • Where networks are in place, around a third of the retailers’ branches have screens in situ. • Most retailers using screens in 2007 have increased the number of screens in situ. This growth also seems to have picked up pace in the last few years. In 2007, the survey predicted an increase in screen numbers of approximately 10% year on year, which has subsequently proved to be a reasonably accurate estimate. In addition, the nature of content seems to be changing significantly. 58.3% of content is now of a bespoke nature and updated weekly. This is driven in part by the availability of hardware and software, but mainly by the availability of ADSL connections.

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the reasons for this continued growth remain the same as in previous surveys: 1. developments in screen technology and content deployment methods. 2. Increased choice of hardware options. 3. Relative decrease in the cost of hardware. 4. Increased availability and speed of Adsl/broadband. 5. Increased availability of animated content (e.g. from websites and mobile app’s). 6. growing awareness and acceptance of the medium by retailers and consumers. In addition, the way in which content is deployed is becoming increasingly complex. Where a network may have relied upon a dvd player only a few years ago, we are now seeing more examples of live information feeds and content adapted to the local market. The future A short stroll down any uk high street will reveal that there are many more screens in situ now than a few years ago, but the number of retailers using screens still represents a relatively small proportion of uk retailers as a whole. With such a low overall penetration, it is likely that we will see many more networks over the next few years, but the rate of adoption may depend (at least in part) in retailers being able to demonstrate a cost benefit. this is particularly the case in a tough economic climate. A digital signage network requires significant funding, and so it is by its very nature a longer-term investment. Consumer spending and perceptions will also play a role… as reliance on price promotions becomes less important and store environment more important, the use of digital signage is likely to increase. there are also operational considerations. Anecdotal feedback would suggest that simple factors (such as the necessity for cabling and an electricity supply) mean retailers often wait to install a digital signage network as part of a store refit programme. Clearly if such a programme has been placed on hold for economic reasons, then the screen network is likely to be placed on hold also. As more retailers adopt the medium though, it is possible that it will become more widely accepted, and as it becomes more widely accepted it is likely to grow even faster… creating a ‘snowball effect’. developments in technology and social media will also continue to play a key role. only three years ago, Facebook and twitter were relative newcomers, and the majority of mobile phones came without unlimited internet browsing contracts, gPs, and touch screens. Compare that to now. Consumers are increasingly downloading, uploading, and sharing information in a matter of seconds, and this desire for instantaneous gratification currently shows no sign of slowing. In the latest survey, approximately 1 in 10 screens were interactive… a similar figure to in 2007, but this figure is expected to grow. the way in which consumers are now interacting with information will likely influence their expectations of in-store signage (particularly the interactive variety). If consumers can’t get the information they need from the screens in-store, will they simply dip their hand in their pockets and search for it on their mobile phone? this represents both an opportunity and a challenge for retailers and digital signage operators. one possible outcome may be the further development of wholly interactive systems, where consumer information (e.g. messages, photos and videos) can be uploaded to appear on large format signage. there have been some examples of this to date (starting a few years ago with text messages) but the concept has yet to take off (most likely because of the need to police such a system).

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Finally, who could have predicted back in 2007 that one of the biggest grossing films of all time would be a 3d animation? Avatar was just one of many hollywood 3d releases, and this trend looks set to continue with many forthcoming movies available in 3d. Although the technology is still very much in its infancy, it is already seeing its way into domestic products such as cameras, tvs and console games, and it is predicted that this will gradually become more mainstream. this technology is moving at a fast pace, and new 3d screens (that do not require the use of glasses) are already available. this could be a very exciting opportunity for retailers and the use of 3d screens is likely to grow quickly… in fact 22.2% of retailers are considering implementing 3d technology in the future. As with any medium however, it’s not so much the delivery method as the quality of the message within. Creating engaging, relevant content will continue to be key.

Fig 6.1 No. of screens in situ growth in screen numbers 2004 – 2010 160000 140000 120000 100000 80000 60000 40000 20000 0

oct 04

March 05

jul 05

jan 06

sept 06

Aug 07

oct 10 2011 Forecast

Fig 6.2 No. of stores using screens growth in no. of stores using screens 2004 – 2010 70000

60000

50000

40000

30000

20000

10000

0 oct 04

March 05

jul 05

jan 06

sept 06

Aug 07

oct 10 2011 Forecast

7. Analysis - Retailers & Brands Screen usage 87.1% of respondents to the survey were retailers, the remainder being made up of brand owners and manufacturers. This survey has identified 111 screen networks within the UK retail sector. This represents a growth of 19% on the 93 networks identified as operational in 2007. The vast majority of networks are owned and operated by retailers. Fig 7.1 Operation of a Digital Signage Network by company sector Fashion / Sports

17

Telecoms

10

Automotive

7

Consumer Electronics

8

Other

3

Health & Beauty

6

Banking / Finance

6

Consumer Durables

5

Convenience / CTN

6

Department Store

5

Toys

5

Travel Agent

4

Entertainment

3

Restaurant

4

Optician

4

Forecourt

4

Cinema / Theatre / Auditorium

4

Supermarket

1 15.9%

2 5 1 1

84.1%

2

Yes No

1

Fig 7.3 84.1% of respondents currently operate digital signage. Again, this is not representative of all UK retailers, and is due to the fact that historically the survey only contacted retailers known to be using screen networks. Retailers are more likely than brands to be operating digital signage (88% vs. 59%). Fashion/Sports, Telecoms and Consumer Electronics are the lead sectors using digital signage. Site visits would suggest that around 10% of retailers currently use digital signage. Whilst current penetration is relatively low, it is growing.

1 2

2 1

Jeweller

3

DIY

1 1

Confectioners

2

Chemist

2

Stationers

1

Greeting Cards

1

Catalogue Store

1

Fig 7.3 Do you currently use digital signage in-store?

Fig 7.4 How many stores use digital screens? 28.4%

22.4%

Have Digital Signage Network

Do not have Digital Signage Network

Fig 7.1 The survey identified 131,560 screens in situ in total. Fig 7.1 shows the number of retailers whose results are included in the survey. The results are broken down by retailer category. For example, of the 18 Fashion/Sports retailers surveyed, all but one had a screen network in situ, and of the 10 Telecoms retailers contacted, all 10 had a network in situ.

27.4%

Fig 7.2 How many stores does your company operate?

13.4% 9.0%

9.0% 4.5%

1-10

11-50

51-100

6.0% 3.0%

4.5%

101-150 151-200 201-300 301-400 401-500

0

1-10

11-50

27.3%

18.2% 15.2%

6.2%

5.3%

2.7%

3.5%

8.8%

9.7%

14.2%

8.8%

13.3%

Fig 7.5 How many screens do you operate in total?



500+

Fig 7.4 Although it is the larger retailers using screens, they tend not to use them across their entire retail estate. This may be related to store size, but it is more likely that the retailers are focusing on using screens in the busier stores and flagship branches.

15.2%

9.1%

3.0%

51-100 101-150 151-200 201-300 301-400 401-500 500+

Fig 7.2 The survey focuses mainly on larger high street retailers whom are likely to have more funding available for in-store Point of Purchase. Larger retailers will also benefit from economies of scale, making the cost per store much lower. For example, the cost of creating remains fixed, whether it is shown on one screen or a thousand. The bulk of respondents operated 500 stores or more, with the majority operating over 50 stores.



1-10

11-50

51-100

1.5%

9.1%

1.5%

101-150 151-200 201-300 301-400 401-500

500+

Fig 7.5 The size of screen networks varies enormously, with the bulk of operators having either less than 100 or more than 500 screens in situ. Those operating more than 500 screens tend to be in the Telecoms, Consumer Electricals, Convenience and Entertainment sectors.

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Fig 7.6 Number of screens per store

Fig 7.9 When were the screens first installed? 33.8%

44.6%

24.6%

33.8%

12.3% 4.6%

4.6%

11-15

16-20

20+

Chemist Cinema / Theatre Confectioners Consumer Durables



11700

DIY Entertainment Fashion / Sports Forecourt Greeting Cards Health & Beauty

531 12 322 36792 331 unknown

1565 0 15 5

Supermarket

10.8% 6.2%

2007

2006

1.5%

1.5% 2004

2005

0%

0%

1.5%

unknown 1100

Toys

7

Other

Fig 7.10 Where is each screen located?

541

Telecoms Travel Agent

Digital signage networks are still a relatively new medium, and the number of screens installed has increased steadily since 2008, with over 1/2 of the networks being installed in the last 2-3 years. The increase in available technology, decrease in hardware prices, and improved methods for content delivery go some way in explaining this. As the medium becomes more mainstream, the type and nature of content displayed is also maturing. Anecdotal feedback suggests that retailers are now seeing digital signage as part of an overall marketing campaign (as opposed to an experimental technique).

691

Optician Stationers

3480

46

Jeweller Restaurant

1.5%

Fig 7.9

0

Convenience / CTN Department Store

2003

841

Catalogue Store

2002

277

2001

Automotive Banking / Finance

2000

Fig 7.7 Number of screens by sector (excluding electrical retailers)

4.6%

Most retailers operate less than 5 screens in each store. Those operating more than 10 screens per store are within the consumer electronics sector, department store sector and cinema sector.

Don’t know

6-10

2010

2-5

2009

1

2008



Fig 7.6

13.8%

0.0%

Wall Mounted

4624

200

60.9%

Behind Counter / Till Point



8012

26.6%

71,092 screens in total Window

Fig 7.7. Shows that there are 71,092 screens in total when electrical retailers are excluded from the results. The vast majority of screens in situ in ‘Convenience & CTN’ and ‘other’ are primarily owned and operated by Camelot, and are used to promote the National Lottery. Fig 7.8 Screen penetration (Retailers only, excludes brands)

25.0%

Central Column / Pillar

20.3%

15.6%

Over Counter / Till Point

Part of a Video Wall

Ceiling Mounted

Other

Total number of stores = 31395

9.4%

6.3%

12.5%

Fig 7.10 37%

63% No.  of stores without screens No. of stores with screens

Fig 7.8 Shows the penetration of screens within the retail sectors as a proportion of participants where the actual number of store with screens is known. 8

Wall mounted screens tend to be the most popular (possibly driven by practicality – ease of routing power cables etc.). The space above wall fixtures is often unutilised, making this an obvious location. The number of screens sited in windows was higher than anticipated, possibly due to the development of hardware that can operate in direct sunlight (traditionally a problem). This may encourage high street retailers who have previously discounted the medium to reconsider screens as an alternative to traditional Point of Purchase.

32.3%

All used

16.9%

21” – 31”

Primarily used 43.1%

Fig 7.12 Are you using professional screens or domestic TVs?

6.1%

6.1% Don’t know

1.5% 3D Screens

3.0%

3.0% TV / CRT

7.6%

3.0% Projector

Each edition of the survey findings has seen an increase in screen size used (due mainly to developments in hardware). Small screens might be used on shelf edges for example, with larger screens located above displays.

Combination

LCD

Fig 7.11

Plasma

13.8%

9.1%

65” +

LED

12.1%

1.5%

15.2%

24.2%

46.2%

42” – 51”

13.6%

32” – 41”

52” – 64”

62.1%

0 – 20”

Fig 7.13 Currently, what type of display device are you using? 63.6%

Fig 7.11 What size of screen do you use?

Fig 7.13 Very few retailers now use CRT screens, and these tend to be a legacy of older networks. LCD are the most popular screens used, but LED screens are on the increase and are expected to take over (due to increased longevity, and reduced power consumption).

Fig 7.14 Do the screens synchronise with audio? 10.9% 6.2%

13.8%

9.4%

18.5%

Professional screens 73.4%

Both domestic TVs and  professional screens Domestic TVs  67.7%

Don’t know 

Yes  No

Fig 7.12 Within the industry, screens manufactured for the domestic market are generally not considered suitable for operation in a retail environment. Professional equipment is designed and manufactured with specific usage in mind. For example, screens are often brighter (to deal with retailer lighting) and unlike domestic screens are designed to run continuously. Most retailers claimed to be using professional hardware (as reflected in the results) but site visits would suggest that domestic equipment was being used in many instances. With so many equipment options now available, it is unsurprising that respondents are unsure of the exact nature of the hardware they are using (often delegating the responsibility for purchasing to others). This represents both an issue and an opportunity for network operators. The quality and reliability of the current domestic screens in situ could be inferior (painting an inaccurate picture of screen failures for example). The opportunity meanwhile is for operators to educate retailers and marketers to promote the benefits of using purpose designed equipment. Company asset buyers and IT managers could play a stronger role here in the future.

Combination

Fig 7.14 Digital signage networks appear to be maturing and this is nicely demonstrated by the use of audio. Historically, creating content for digital signage was an issue for retailers. Initially, many simply opted to re-purpose TV ads for use in-store (using sound to attract attention). This was often ineffective, not only because it is inappropriate in a retail environment, but also because it quickly became an irritant to staff (who sometimes turned the feature off). Retailers now recognize the need for repetitive (high frequency) messages that work without audio. As the number of screens grows, they are developing completely bespoke content (which combines the benefits of moving imagery with conventional still images and text led messages). Although the consumer message tends to be very simple, the content delivery is becoming increasingly more sophisticated.

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Fig 7.15 Are the screens interactive?

10.8%

Fig 7.17 What device is used for content playback?

Standalone PC

9.2%

33.8%

Built in PC

27.7%

Media Player

16.9%

DVD Player

80.0%

10.8%

Yes No

3.1%

USB Stick (only)

Combination 29.2%

Don’t know

Fig 7.15 Approximately 10% of all retailer networks are fully interactive, with a further 10% of networks using both interactive and non-interactive screens.

Fig 7.16 H  ow many separate screen content channels do you operate?

Fig 7.17 The most popular device for content playback is PC. Increasingly, modern screens are featuring built–in PCs for this purpose. Approximately a third of respondents simply don’t know how the content is delivered… suggesting that they leave this task to a colleague or supplier. This represents an opportunity for the industry to educate retailers by explaining the different delivery methods and relative advantages and disadvantages of each.

62.3%

Fig 7.18 How do you deliver the content to the screen?

34.8%

ADSL Line (internet)

16.4%

0.0% 1

2

13.6%

PC via LAN / WAN

13.6%

Media Player via LAN / WAN

10.6%

DVD

10.6%

9.8%

6.6%



Satellite

3

4

5

3.3%

1.6% 3G

6

7+

Data Card or (USB / CF Card) Other

Fig 7.16 Most retailers operate only one channel. Those running more than one channel tend to be in the Cinema/Theatre sector, Convenience/CTN, Entertainment, Telecoms and Consumer Electronics sector. In the Cinema sector the screens surveyed are located above the concessions stands, promoting popcorn etc. (not the auditorium screen showing movies).

10

9.1%

Don’t know

6.1%

3.0%

28.8%

Fig 7.18 This area has seen one of the greatest changes since the last survey in 2007. At the time, DVD was the most popular method of distributing content to screens (45% of the total). This has now changed to ADSL as networks become far more sophisticated.

Fig 7.19 How would you classify the content shown on screen?

Fig 7.21 What is the main source of funding for your network?

3.9

Promotional Messages

11.1%

3.8

Retailer Branding

14.3%

3.0

Supplier Branding

58.7% 15.9%

2.0

Infotainment

Self funded Advertising

1.9

Third Party Advertising

Combination Brand Manufacturer 

0.8

Broadcast TV

0

1

2

3

Least important

4

5

Most important

Fig 7.21 Most networks are retailer funded. Ad revenue network numbers now represent a smaller proportion of the total than in 2007 (previously 1 in 5 networks were funded by ads).

Fig 7.19 Promotional messages and retailer branding have been split into two separate categories for the latest survey. It is perhaps no surprise that promotional messages are the most important category in such a tough economic climate.

Fig 7.22 Which department is responsible for decision making on digital signage networks?

Fig 7.20 How often do you update your screen content?

1.4% 8.6% 4.3%

58.3%

46.7%

85.7%

Marketing Operations

25.0% 21.7%

20.0%

Sales

15.0%

Other 

3.3%

Live Hourly Daily

Weekly

Monthly

Quarterly Every 6 months

Fig 7.20 Most content is now updated weekly. This represents a marked change to 2007 where nearly a third of content (31%) was updated monthly. This is driven in part by the availability of hardware and software, but more so by the availability of ADSL connections. Developments in software mean that retailers can now control the messages that appear on signage from a central location… getting their message in-store within seconds as opposed to weeks. This enables them to quickly instigate promotions and offers, and to react to environmental factors ranging from the weather to the latest winner of a TV talent show.

Fig 7.22 The majority of screen networks would appear to be the responsibility of the marketing department. Since most survey respondents came from the POPAI database (which is aimed at those working in marketing and advertising) these results may be impacted by respondent bias.

uk digital signage survey Seventh edition: january 2011

11

Retailers & Brands – Attitudes As well as identifying the current usage of digital media, the survey also looks at retailer attitudes towards future usage. The key findings are: • Most retailers think that up to £5k per store represents a reasonable investment. Those considering £10k+ are mainly within the Consumer Electronics and Cinema/Theatre sector. • Approximately 7 out of 10 retailers currently using screens are doing so because they regard them as having an impact on sales. • More than half of respondents think that digital signage improves the store environment. • The perceived benefit of product demonstration is influenced by the market sector. For the Telecoms, Consumer Electronics and Consumer Durable sectors, it is key to be able to show what the product has to offer. • Where the network is funded by advertising (e.g. forecourts), advertising revenue is (rather obviously) considered important. Where the network is self-funded, it is (unsurprisingly) of little or no importance.

• The usage of screens over the next 12 months looks set to increase, with 34% of retailers saying they are planning to increase the number of screens used. A further 1 in 5 who are not currently using screens say they are considering them. Very few of those who are currently using screens are planning to remove them. • There seems to be an appetite for touch screens. This technology is most likely to be used in-store over the next 12 months, with 42% of retailers currently considering interactivity. • Brand plays a part when selecting which hardware is used.

Fig 7.23 What would you consider to be a reasonable investment on screens (per store)?

Fig 7.24 Perceived benefit of screens

Sales Uplift

3.9

Brand Messages

3.8

3.1% 7.7%

Store Environment

3.6

18.5% Product Demonstration

70.8%

£0k – £5k £5k – £10k £10k – £20k

3.0

Compliance / Implementation

2.9

2.3

Advertising Revenue

£20k+ 0

1

2

3

4

5

Of no benefit Of greatest benefit

Mean score (average)

Fig 7.23 Most believe that up to £5k would be a reasonable investment per store. Those considering £10k+ are mainly within the Consumer Electronics and Cinema/Theatre sectors.

12

Sample size: 65 – 67

Fig 7.24 Sales uplift is, and brand messages are, seen to be of great benefit when using screens. Screens are also seen to be of benefit for the store environment. Advertising revenue is seen to be of least benefit. These figures reflect all options, irrespective of whether the survey participant currently uses screens. Many of those who currently do not have digital screens did not respond to this question – the assumption being that they cannot see what the benefits are of using screens.

Fig 7.28 Perceived benefit of screens ‘Product Demonstration’

Fig 7.25 P  erceived benefit of screens ‘Sales uplift’ 40.3%

27.3% 24.2% 29.9% 19.7%

18.2%

17.9% 10.6%

5

4

3

6.0%

6.0%

2

1

Of greatest benefit Of no benefit

Sample size: 67

5 4 3 2 1 Of greatest benefit Of no benefit

Sample size: 66

Fig 7.25

Fig 7.28

Sales uplift is seen to be of great benefit when using screens, with 4 in 10 saying it’s the greatest benefit. Very few indicated that screens did not benefit sales uplift.

The percieved benefit of product demonstration is influenced by the market sector. For the Telecoms, Consumer Electronics and Consumer Durable sectors, it is key to be able to show what the product has to offer.

Fig 7.26 Perceived benefit of screens ‘Brand Messages’

Fig 7.29 Perceived benefit of screens ‘Compliance/Implementation’

34.8% 30.3%

36.4%

21.2% 22.7%

10.6%

13.6% 13.6%

6.1% 0.0% 5

4

3

2

1

Of greatest benefit Of no benefit

5 4 3 2 1 Of greatest benefit Of no benefit

Sample size: 66

Sample size: 66

Fig 7.29

Fig 7.26 Brand messaging is another great benefit of using screens. Whilst not as many rating it as the greatest benefit as sales uplift, there is a high percentage rating it 4 or 5.

Store compliance is not a primary motivator for using screens.

Fig 7.30 P  erceived benefit of screens ‘Advertising Revenue’

Fig 7.27 Perceived benefit of screens ‘Store environment’ 26.2%

36.4%

27.7%

28.8% 24.6% 18.5% 15.2% 12.1% 7.6%

3.1% 5 4 3 2 1 Of greatest benefit Of no benefit 5

4

3

2

1

Sample size: 66

Of greatest benefit Of no benefit

Sample size: 65

Fig 7.27 Store environment is a key benefit for many.

Fig 7.30 The importance of advertising revenue will usually depend on the way in which the network is funded. For a retailer where the network is funded by advertising will be very interested in this benefit. Forecourts is one of these sectors.

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Fig 7.31 What is you view on digital signage screen usage over the next 12 months?

Fig 7.33 Is brand an important consideration in selecting screens?

We use screens and plan to increase the number

34.1%

We use screens and plan to keep the same number

23.0%

9.4%

We don’t use screens, but are considering them

22.4%

52.7% We use screens and plan to remove them

We don’t use screens and don’t plan to

Brand is a consideration  alongside price

24.3%

1.2%

 rand is an important B indicator for quality and support

3.5%

Brand is not an important consideration

29.4%

Not sure

Fig 7.33 Fig 7.31 The usage of screens over the next 12 months looks set to increase, with 34% saying they are planning to increase the number of screens used. A further 1 in 5 who are not currently using screens say they are considering them. Very few of those who are currently using screens are planning to remove them.

Fig 7.32 Likelihood of using each technology in-store over the next 12 months? 30.5% Touch Screens (single touch)

42.7% 26.8%

17.1% 37.8%

Multi Touch Techonology

45.1%

14.8% 3D Screens

42.0% 43.2%

7.3% Gesture Technology

30.5% 62.2%

7.3% Holographic (augmented reality)

25.6% 67.1%

Yes

Possibly

No

Fig 7.32 Touch screen is the technology that is most likely to be used in-store over the next 12 months. Multi touch technology and 3D screens, although not a high percentage are saying yes, there is a large proportion who say that there is a possibility they may be used in-store. Gesture technology and holographic are the least likely to be used in the next 12 months in-store.

14

For three quarters of those interviewed, brand plays a part when selecting screens. For 52.7% brand is a consideration alongside price and for 24.3% brand is an important indicator of quality and support.

8. Analysis - Shopping Centres Overview The nature of screen usage in shopping centres is quite different to that in individual retail outlets. Rather than promoting individual messages, content tends to be a mixture of advertising, news, public announcements and general information. There is an increasing proliferation of touch screens (which are often used as interactive touch point maps). Shopping centres tend to use larger screen sizes (especially 50” and 65”) commonly suspended from the ceiling or mounted on free-standing columns (usually in busy traffic areas such as around lifts and escalators). A total of 72 shopping centres responded to the survey in 2007. At the time only 12 of these had a screen network in place (16.7% of the total). A total of 66 shopping centres responded to the most recent survey with the number of networks rising to 44 (66.6% of the total)… a very large increase in a relatively short time. In 2007, there were 160 screens in situ, and in the most recent survey this number had grown to 469 (nearly a threefold increase). The exact reason for this rapid growth is unknown, but one possible explanation is that it is easier (and more cost effective) to implement and manage a network in a small number of geographical locations, verses a large retail estate of retail stores. Most shopping centres had less than 10 screens in situ, a relatively small number given the size of the venues. Site visits would suggest that many of these are placed close to entrances to display useful information. Additional observations • Content is primarily delivered via PC/LAN and not ADSL (as with retailers). • Supplier branding features more heavily on shopping centre networks. • Ad revenue generation is more important to shopping centres than retailers. • Content is generally updated less frequently than by retailers. • A large number of shopping centres (36.1%) don’t currently plan on using screens.

Fig 8.1 Do you currently use digital signage in-store?

Shopping Centres – screen usage • Two thirds of shopping centres contacted currently use screens, generally operating no more than 10 screens in total. • Nearly all of the remainder (25% of respondents) not currently using screens stated they are considering using them. • Most shopping centres see screens as a tool to communicate supplier brands and promotional messages, and most content is updated on a weekly or monthly basis. • Large environments demand large screens, and 42”-51” screens are the most commonly used in shopping centres. • The most popular method of content distribution for shopping centres is via LAN/WAN (often because the shopping centre’s marketing operation is based on-site). In comparison, retailers (with many stores spread across the country) are more reliant on ADSL. • The way in which content is distributed to the screen is dependent on both the number of screens and whether the shopping centre operator has more than one site. Shopping centre networks are becoming increasingly sophisticated (especially in the larger centres) and now feature a combination of live information, such as the news feeds. • Funding of shopping centre networks appears to vary, with some being self-funded, others being funded by advertising, or by a combination. Those funded by brands/manufacturers tend to be larger shopping centres. • Shopping centres who operate 10 screens or less tend to update their screen content on a more frequent basis than those operating more than 10 screens. • As with retailers, touch screen technology is the most likely to be used in the near future. • Recent developments in technology have seen both hardware and software developed especially for the retail sector, and there are now a number of digital signage experts emerging. As more shopping centres and retailers implement screens it is likely that brand leaders will start to emerge and this area will become more important.

Fig 8.2 How many screens do you operate in total? 39.5%

39.5%

33.3%

66.7% 11.6% 9.3%

Yes  No

1 – 5

6 – 10

11 – 20

21 +

Total Number of screens = 469

uk digital signage survey Seventh edition: january 2011

15

Fig 8.3 What size of screens do you use?

Fig 8.6 How would you classify the content shown on screen?

5.0%

0 – 20”

20.0%

21” – 31”

3.9

Promotional Messages

3.9

3.4

Retailer Branding

25.0%

32” – 41”

Supplier Branding

Infotainment

3.1

Third Party Advertising

3.1

40.0%

42” – 51”

15.0%

52” – 64”

2.1

Broadcast TV 25.0%

65” +

5

4

3

2

1

Least important

0

Most important

Mean score (Average)

Fig 8.4 How do you deliver the content to the screen? Fig 8.7 What is the main source of funding for your network? PC via LAN / WAN

28.6%

21.4%

21.4%

ADSL Line (internet)

DVD

14.3%

28.6% 21.4%

Data Card or (USB / CF Card)

7.1%

28.6%

Self funded

28.6%

Don’t know

Advertising Brand/Manufacturer Combination

Fig 8.5 Number of screens operated vs. content delivery method? Fig 8.8 How often do you update your screen content? 1 – 5 screens

42.9%

42.9%

14.3% 14.3% 14.3% 14.3%

35.7% 6 – 10 screens

11 – 20 screens

66.7%

33.3%

28.6%

50%

50%

14.3% 21+ screens

100%

7.1%

PC via LAN / WAN

ADSL Line (internet)

Data Card or (USB / CF Card)

DVD

Live Daily

Weekly

Monthly Every 6 months

Don’t Know

Fig 8.8 Most content is updated on a weekly or monthly basis. 16

Fig 8.9 Number of screens operated vs. frequency of updating screen content? 1 – 5 screens

28.6%

14.3%

28.6%

42.9%

Fig 8.12 Is brand an important consideration in selecting screens?

14.3%

29.4% 6 – 10 screens

100%

52.9% 11 – 20 screens

100%

50%

17.6%

Brand is an important indicator  for quality and support Brand is not an  important consideration

100%

21+ screens

Live

Daily

Weekly

Monthly

Fig 8.13 Are the screens interactive?

Every six months

7.1%

Fig 8.10 What is your view on digital signage screen usage over the next 12 months?

We use screens and plan to increase the number

Brand is a consideration  alongside price

7.1%

5.6%

85.7%

We use screens and plan to keep the same number

27.8%

No  We don’t use screens, but are considering them

Yes

25.0%

Combination 

We don’t use screens and don’t plan to

36.1%

5.6%

Not sure

Fig 8.11 Likelihood of using each technology in-store over the next 12 months? 25.0% Touch Screens (single touch)

11.1% 63.9%

11.1% 19.4%

Multi Touch Technology

69.4%

2.8% 22.2%

3D Screens

75.0%

0.0% Holographic (augmented reality)

25.0% 75.0%

0.0% 22.9%

Gesture Technology

77.1%

Yes

Possibly

No

uk digital signage survey Seventh edition: january 2011

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About the sponsors

LG Commercial Displays LG produces a complete range of Commercial Display and Digital Signage products designed to support and enhance businesses in a variety of markets including retail, leisure, hospitality, small to medium businesses and public sector markets. We work in partnership with our customers, and take time to understand the individual requirements and work with them to develop bespoke, reliable solutions designed to improve business from either a cost saving, time saving or energy saving perspective. The LG product range includes: • LG SuperSign a complete content management solution comprising media player and content management software • A range of specialist digital signage screens designed to support specific usage scenarios including sunlight readable, stretch format, video wall and touch screen products • A complete range of Commercial TV products supported by a full 2 year B2B warranty. For more information please visit www.lge.com/uk or call 0121 202 1004.

POPAI UK Ltd Point-of-Purchase Advertising International (POPAI) is the only global, not-for-profit trade association exclusively dedicated to serving the interests of all those involved in retail marketing. POPAI has 20 national offices covering 45 countries and more than 1,700 members worldwide. The organisation works to establish and maintain excellence in all aspects of retail marketing communications, raise standards of business practices and provide its membership with information to ensure its continued position as a vital part of the marketing mix. POPAI conducts research and organises conferences, seminars and educational programmes to benefit its members who include P-O-P designers, manufacturers and suppliers, brands, retailers, agencies, suppliers of digital screen and audio and those working in educational sectors. www.popai.co.uk © 2011 All rights reserved. POPAI UK & Ireland Ltd and LG Electronics. This document may not be copied, adapted, distributed, or communicated by electronic transmission (in part or as a whole) without the prior consent of POPAI UK & Ireland Ltd and LG Electronics. The publishers (and their associated parties) will not be held liable for any damages (including, without limitation, damages for loss of business or loss of profits) arising in contract (or otherwise) from the use of the information contained within this document, or from any action or decision taken as a result of using this document. The ‘UK Retail Digital Signage Survey’ is priced at £295 (excl. VAT).