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Def on the Aisle

In-store or in-house, businesses are relying on digital-television networks to get their message out.

Despite the hype, viewing television on a high-definition liquid crystal display isn’t all it’s cracked up to be. Hi-def content is limited, moving images tend to blur on screen, and standard-definition programs look like they’ve been run through a taffy puller.

But retailers love hi-def sets, and not just because consumers are willing to shell out $3,000 on a home appliance they once paid $300 for. The fact is, high-definition televisions draw big in-store audiences — audiences that tend to stand in front of the giant screens for long periods of time.

Retailers, clever bunch, have spotted an opportunity in this accidental audience. Many have started to run internally produced digital programs on the hi-def televisions they carry. They’ve also placed the TVs all over their shops. Wal-Mart’s 2,650-plus stores now boast an astonishing 100,000 screens. Those screens reach 336 million shoppers every month with news updates, concert excerpts, and repurposed broadcast content.

The programming, called digital in-store media, is a hit not only at retailers but at many other kinds of companies as well. Some — eager to cut T&E costs — have launched in-house digital satellite networks that beam training sessions and internal corporate communications to TV sets in far-flung offices (see “A Little Help from Above” at the end of this article).

Retailers are taking a more top-line approach. Wal-Mart, for instance, posts 12 minutes of advertising every hour on its network, including 5 minutes of house ads. Research sponsored by the company found that brand recall among in-store viewers was 65 percent. By comparison, brand recall for at-home viewers is closer to 23 percent. Says Nikki Baird, a senior analyst at Forrester Research, “An advertiser can tailor its messages to specific shoppers matching its target demographics.”

Apparently, the tailoring suits customers. In a study conducted by media-research specialist Arbitron, nearly a third of shoppers reported making an unplanned purchase after seeing a product advertised on an in-store digital satellite network. What’s more, digital programming generates ad sales dollars from vendors. Combined, the two revenue streams can add up. The UPS Store (Canada) launched a digital in-store network in June. Malcolm Houser, executive vice president and chief operating officer of the Toronto-based retail chain, expects a big payoff: “We anticipate a 300 percent return on our investment within five years.”

Time of the Signs

It’s hard to get that kind of return with old-fashioned signs. “In traditional settings, signs stay up for a selling season, depending on the retailer,” says Baird. “Digital in-store media allows the message to be changed by the hour, based on who is shopping at a given time.”

That’s been the case at CompUSA. Prior to the launch of a digital in-store media network in April 2004, salespeople at the Dallas-based retailer played whatever they liked on TV monitors on store shelves. Usually, that meant sports. “The traditional signage we had in our stores sent an inconsistent message and didn’t showcase the products the way we wanted,” says acting CFO Todd Whitbeck. “We felt there was an opportunity to combine the signage with the screens.”

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