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Sun 19 Aug 2007 12:00 AM

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Flat screens enter in store advertising mix for hypers

While the past few years have seen a sea change in the way stores operate, with major advances in the technology behind retail operations such as stock taking, ordering and point of sale, other aspects of retailing have remained stubbornly the same. In store advertising is one example; printed adverts and signboards, either on walls, hanging from the ceiling or shelves, have been a staple of supermarkets and other types of store for years.

While the past few years have seen a sea change in the way stores operate, with major advances in the technology behind retail operations such as stock taking, ordering and point of sale, other aspects of retailing have remained stubbornly the same. In store advertising is one example; printed adverts and signboards, either on walls, hanging from the ceiling or shelves, have been a staple of supermarkets and other types of store for years.

But that looks set to change, as retailers, and particularly hypermarket operators, wake up to the many benefits of installing a system of multiple flat screens in their stores. Indeed, by placing these screens in strategic locations, the retailer can transmit advertising and information to customers across single or multiple stores from a central location, with none of the hassle of positioning and removing costly printed promotional material.

Raad Raad, managing director of Mxn Middle East, a company that specialises in digital signage, is just one exponent of the technology who is convinced it will become an integral part of retail outlets in the next few years.

Raad points to numerous ways retailers can benefit from installing a network of digital displays in store, from offering brand owners an advertising medium, to alerting customers to special offers and discounts, for example on perishable goods that are close to their sell-by-date.

In terms of brand advertising, in store screens are likely to become popular with brand owners for the simple reason that the most effective time to catch consumers' interest is at, or close to, the point of sale. "It is the thing that will drive advertisers going forward - the customer is at the point of purchase and not at home watching the TV," Raad says.

"You are actually in the grocery store and seeing an ad for Pepsi, Coke or whichever brand it might be and I think advertisers understand the value of advertising when the consumer has got his hand on his wallet and he is ready to spend money."

But digital displays also are not only useful for promoting certain brands. Indeed, a retail chain that has an integrated system across its stores can also use the system to help ensure products approaching their sell-by-dates are sold. For example, if a store had a surplus of a certain brand of milk, or a batch of milk about to expire, it would be able to inform customers that the product is selling at a discount. Furthermore, a system can even be hooked up to a retailer's stock inventory system and programmed so that certain products will be promoted if and when they are nearing their expiry dates, according to Raad.

"By hooking into their inventory control system, we can actually programme it that way - if a hypermarket chain knew that all of their milk was expiring in the next 24 hours you could program in a rule to ensure that if the inventory that expires within a 24-hour period at any given time is above a certain level, and flash a discount message across all the screens starting at 7pm. This will give three or four hours to still move some product, whereas if you leave it to the next day it won't sell."

Despite these benefits, retailers in the Middle East have been slow to respond to the technology and this is partly due to a reluctance among retailers to pay for a system. This attitude is likely to change as retailers realise that digital display systems can become an effective revenue stream, as well as a means of communicating with customers.

"The best thing they could ever do is invest in the networks because if they own the system, they can command greater value from the brand owners who want to advertise on it, perhaps by renegotiating contracts," Raad says. "What the retailer seems to forget is that they are going to move more product after they install this type of system, and if they do that they are able to put more money in their pockets."

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