The UPS Store is investing in digital signage technology to boost sales, increase product recall and lower perceived wait times.
Most customers don’t pop into their local UPS store to browse the shelves. “Our typical customer is coming to us for a specific purpose, to pack something or ship something,” said Malcolm Houser, executive vice-president and COO of The UPS Store.
But one of the toughest things to do is get your sales staff to cross-sell and up-sell, he added. So the company turned to digital signage as a way to educate its customer base about additional offerings, without having to spend a lot of money.
After looking at seven different products, it chose CCi’s Retail Digital Media to provide digital signage at the point-of-purchase in retail locations across Canada.
The company has installed digital signage in 14 stores to date and another 25 are in some stage of installation. Just over 40 stores have signed on, and Houser estimates the company will deploy digital signage in about 80 stores by the end of this year. The company plans to roll out the technology to 75-80 stores each year over the next couple of years, with a goal of having all retail locations on board in three years.
“We’ve done our projections based on a 2.5 per cent increase (in sales), which we feel is pretty modest,” he said. “The U.S. Postal Service ran in excess of four per cent, so we said if the U.S. Postal Service can do it, we should be able to do it.”
CCi has partnered with Real Digital Media for its Neocast digital signage technology, designed to deal with retail environments such as long operating hours, varied network architectures and the requirement for little or no on-site maintenance. EyeQ Digital was selected as the content developer and will be responsible for all the material that appears on the network. CCi will provide integration and rollout services including project management, installation and ongoing support.
Intuitively it makes sense, but retailers want to put it in a few stores and test it out first, said Dennis Kukulsky, vice-president of CCi’s Retail Applications Division. “At the end of the day there’s got to be a return on investment,” he said. “With UPS, they’re going to enjoy something like a 300 per cent ROI each year based on the cost of the service.”
CCi also offers financing options. With UPS, for example, each store is an independent franchise, so CCi offers a price based on purchasing the technology and another price based on leasing it for a three- or five-year period.
A lot of retailers are doing pilots and experimenting with the medium, but very few have proceeded with major rollouts, said Nikki Baird, senior analyst of retail technology with Forrester Research. For the most part, retailers are trying to figure out what they can get out of the medium.
“The postal service and shipping companies have a lot of complex services – it’s not a product, you can’t just put it out on the shelf,” she said. “So to me it makes sense. For single-brand retailers this is an area where you get early penetration.”
A lot of department stores tested digital signage by putting up screens and TVs, but didn’t get anything out of it because they didn’t really know what they wanted to get out of it. You have to go in with a clear objective and define some measurements up front as to how you’re going to make sure you’re hitting that objective, said Baird. Measurement is a big challenge – some use ad recall or foot traffic as a proxy, but nobody really knows exactly how effective the medium is.
One advantage of the technology is that it’s capable of getting very targeted very quickly, she said, but it also creates a “content beast” that’s always hungry. Also, retailers have to consider their employees. If they’re running a two-hour loop over and over again, employees are going to be forced to listen to it all day long, all week long. And that, she said, is a good way to get your digital sign turned off.