11.20.2007 04:28 PM
Retail Systems Research: digital signage increases revenue 2.5 percent

In October, Digital Signage Update profiled a report from analyst firm Retail Systems Research titled “The Business Case for Retail Media Networks.” The report aimed to quantify the benefits of digital signage networks — or retail media networks (RMNs) — to a greater depth than what has been previously done.

The report used statistics, case studies and other secondary research to come up with a hypothetical case study replete with results that in theory match the benefits of a real-life implementation. Three panelists shaped the study and results — an unnamed media and entertainment company, an anonymous small format specialty retailer and UPS Canada.

According to the initial data and case studies, the most conservative estimates peg in-store media responsible for a 15 percent lift on products promoted via digital signage, while corresponding display compliance contributed a 10 percent incremental lift. The firm also assumed the percent of SKUs on promotion made up roughly the same percentage of a transaction — again, a very conservative hypothesis, according to the research.

Using these postulations, the report concluded that an RMN contributes $40 million, or 2 percent of sales, to the top line of a 500-store chain with $2 billion in revenue and an average transaction value of $11.57 and 8 percent of SKUs on promotion per week — a figure that is consistent with UPS Canada’s 2.5 percent revenue boost compared to its own stores that did not use in-store networks.

The report also cites several soft benefits including a better recall of brands and their selling points by employees trained in stores with RMNs and a higher overall customer satisfaction rate with careful crafting of the RMN’s context.

For more information, visit http://www.retailsystemsresearch.com/_document/summary/324 and www.realdigitalmedia.com.


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