Innovation in Supermarkets: The Digital Signage Revolution
The retail industry is undergoing a significant transformation with the increasingly widespread adoption of digital signage. These digital displays, used to promote discounts and offers, not only enhance the customer experience but also upend traditional marketing strategies. Digital signage technology, valued at $17.77 billion in 2022 and projected to reach $27.8 billion by 2026, is rapidly becoming an indispensable tool for retailers around the world. The use of digital billboards in supermarkets has recently attracted the attention of many industry experts, particularly because of their ability to influence customers’ shopping behavior. A 2021 survey conducted by Future Stores revealed that 86 percent of major retailers expect digital displays to become effective in promoting price discounts. This expectation is based on digital signage’s ability to capture customers’ attention more effectively than traditional printed billboards due to the dynamic and visually appealing nature of digital content.
A recent study (“Digital signage for promoting price discounts: First insights into customer spending on distant and nearby discounted products”) conducted by Anastasia Nanni of Aalto University in Espoo, Finland, and Andrea Ordanini of Bocconi University, published in the Journal of Retailing, explored the impact of digital signage on customer spending on discounted products. The research, which involved 7,009 customers in two European supermarkets, revealed that promoting discounts via digital screens has a significant impact on sales of discounted products positioned away from the screens themselves. In contrast, for discounted products positioned close to the screens, the effect on sales was found to be negligible. Ordanini, professor of marketing and holder of the BNP Paribas Chair in Marketing & Service Analytics at Bocconi, commented, “Our results suggest that retailers should carefully consider the location of discounted products relative to digital screens. Our research shows that promoting products away from screens can increase customer spending on these products.”
Nanni and Ordanini’s research provides valuable insights for retailers who wish to optimize their in-store marketing strategies. For example, a supermarket could use digital screens to promote discounts on products located in far departments, while traditional printed signs might suffice for products close by. In a practical context, one could imagine a supermarket using digital screens in the fruit and vegetable department to promote discounts on meat and baked goods located in other areas of the store. This approach not only captures customers’ attention but also incentivizes them to explore the entire store, thus increasing the likelihood of additional purchases. Ordanini stresses the importance of a strategic approach: “Integrating digital screens and traditional printed billboards effectively can optimize retailers’ marketing strategies, improving the customer experience and increasing sales.”
The digital signage revolution offers new opportunities for retailers to improve their promotion strategies and increase sales of discounted products. Nanni and Ordanini’s research is a first step toward a deeper understanding of the effectiveness of digital signage in retail, offering valuable practical insights for store managers and marketing professionals. With the growing adoption of this technology, it is essential that retailers continue to explore and experiment with new strategies to maximize the benefits of digital signage, creating a more engaging and personalized shopping experience for their customers.
