Fifteen Reasons to Launch an In-Store Digital Network

Wal-Mart Canada is rolling out an in-store digital network that, according to the marketing executive leading the effort, can provide a multitude of benefits.Installation of a chain-wide digital signage network is "the ticket to a more attractive environment, and one that could drive sales," said Mike Dombrow, director of marketing for Wal-Mart Canada Corp., during a presentation at the NRF Show in New York last month.The network was up and running in 60 stores before the holiday 2007 season, and will be deployed to all 287 Wal-Mart Canada stores by the end of 2008. The network will be installed and operated by London, Ontario-based Ek3 Technologies and its Toronto-based subsidiary, ShopCast. Ek3 pays for the installation and will sell advertising to Wal-Mart suppliers in a revenue-share model with the chain, according to Ek3 ceo Nick Prigioniero. Advertising will carry a cost-per-thousand of about $4. Average length of an ad is currently 15 seconds.Each store will have at least 16 screens, depending on size; supercenters will have 20. The 42- and 48-inch monitors are being deployed at checkout and in 10 other zones, including cosmetics, produce, toys, electronics and dairy. They will be suspended from the ceiling, eight feet above the floor. (Editor's note: In the U.S., Wal-Mart has abandoned this type of screen configuration. See Related Articles.)The network will run unique programming and paid advertising on a national level, along with local information and other store-specific content. An important strategy for success will be to integrate promotional messages with merchandising activity, Dombrow said. Wal-Mart Canada has been investigating digital networks with ShopCast for several years, Dombrow said, as part of its efforts to better serve the needs of one million daily shoppers (in a nation of 31.6 million people). Historically, stores can often appear cluttered due to the volume and inconsistency of traditional messaging systems, which have always been hampered by store-level compliance, he said. Also, the lead times and costs of print sign programs make it difficult to respond quickly to market conditions or to customize messages, he added.What It Can DoThe network has three primary objectives:Engage shoppers by providing information and entertainment.Drive sales. Dombrow called it a "large-scale suggestive selling agent."Create a new revenue stream through paid vendor advertising.But Dombrow outlined 15 specific roles that the network can play in meeting those objectives:Engage shoppers.Entice them to shop more categories.Generate incremental sales.Spur impulse purchases.Create awareness of services.Jump-start sluggish categories.Reduce seasonal "liabilities" (overstock).Promote private-label products.React to market conditions.Reinforce external marketing activity.Foster goodwill (by promoting green initiatives and other civic causes).Build rapport with high-potential customers.Allow product vendors to build brand equity.Support major vendor promotions.Deploy strategies economically and quickly.The network concept was tested in 2003 by outfitting five stores with screens in the food, cosmetics, health & beauty and apparel departments. Over one month, the network ran ads from 16 vendors (four per department) representing 21 brands and 500 stock-keeping units. Ads on the network produced an average sales lift of 17.5% compared with control stores. In corresponding exit interviews, 88% of 751 shoppers said that the ads sparked interest in specific products, 20% said it inspired them to visit unplanned areas of the store, and 4% said it directly influenced a purchase. (Dombrow, however, thinks that last statistic is actually higher based on the sales results.)Linda, Meet LisaDombrow believes the network will help Wal-Mart Canada better connect with its core shopper: mothers with young families. Known internally as "Linda," this average shopper is 44 years old and has at least one child; she visits Wal-Mart twice as often as other shopper segments (33 trips annually) and spends 11 times more.ShopCast has created an animated character called "Lisa" that will be used in programming vignettes designed to entertain while showing "Linda" that "we have the products and services she needs and the experience that simplifies her life," explained Dombrow. The 30-second vignettes are "fun and engaging and very inexpensive to do," he said.Content in the early stages is purely entertainment as the chain seeks to establish the connection with shoppers. Later, the vignettes will incorporate paid advertising by presenting specific products as solutions to lifestyle needs. But the network will let Wal-Mart look beyond "Linda" to target other shopper segments. Additional characters will be added -- "Lisa" already has a husband, two kids and a dog -- to appeal to other demographics groups.The network dovetails with the company's "Store of the Community" strategy by providing an outlet through which to localize promotional information cost-effectively. This is especially important in Canada, where 20% of the population consists of recent immigrants. "We can now broadcast to specific stores," Dombrow said. As an example, the chain will soon develop programming in Mandarin.Another key target will be Baby Boomers, who in Canada represent 30% of the population, 50% of spending and 80% of the wealth. They also have told surveys that they often feel overlooked by youth-obsessed advertisers, he noted.

Fifteen Reasons to Launch an In-Store Digital Network

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