All (Digital) Signs Point To Growth

By Brian Albright, Business Solutions magazine.

Digital signage is becoming a lucrative add-on in a number of key verticals.

Digital signage has an increasing presence in a number of key vertical markets, and VARs are discovering that it can be an attractive add-on to their existing data collection, point of sale, and other solutions. Any customer that relies on traditional signage presents a potential sales opportunity, especially as the technology drops in cost and becomes easier to deploy.

“Business users are looking for a cost-effective alternative to the maintenance of static signage,” says Kevin Prewett,VP, Pro AV and digital signage at Ingram Micro U.S. “Digital signage provides that. It’s an easy-to-maintain, customizable, reliable solution that fits their needs. Another important factor is that it is not bandwidth-intensive if the solution leverages the existing network.”

These signage solutions also are evolving to integrate with other technologies, providing interactive display solutions in applications where increasing customer touchpoints is key. “Digital signage will become very prevalent in the next five years and will be in many formats — not just the large-screen formats we are accustomed to seeing today,” says Nell Alverson, director of merchandising at ScanSource POS & Barcoding. “There will be real-time interaction with other technologies and customer-facing systems that are being used in conjunction with digital signage — even with mobile devices.”

The primary opportunities for digital signage sales are in retail, hospitality, quick service restaurants, healthcare, transportation and other corporate markets, along with education and government. “The POS and AIDC (automatic identification and data collection) markets are clearly tied into these verticals, and it’s an easy transition to look for signage opportunities with current customers,” says Gary Childress, director of digital signage solutions at BlueStar. “Many of these verticals are looking for technology solutions to replace outdated manual processes and static promotions with dynamic messaging, targeted advertising, and timely communications — a ‘wow-factor’ that reduces costs and improves the overall customer experience.”

End users want user-friendly digital signage solutions that include software, hardware, and support, and they prefer to purchase from a single provider. Central control of the signage solution (which could include hundreds of displays) is critical. “Consumers desire network connectivity that allows them to instantly change the dynamic promotional message of dozens or hundreds of displays, via the Internet,” says Chris Walsh, director of marketing at POWERVAR.

With IT budgets still tight in many organizations, customers also want flexible financing arrangements, including the option to lease the solution. “Leasing is a viable option for end users who are cost-conscious, and it bodes well for digital signage solutions by allowing VARs to keep the solution refreshed,” Prewett says.

Mistakes To Avoid With Digital Signage
Be forewarned, deploying a digital signage solution requires more than just plugging in some displays. Common mistakes for VARs and integrators include failing to properly plan the digital network and selecting less-expensive, consumer-grade hardware that can fail and cause problems with the network later.

“If the VAR does not understand where their content is coming from and how to manage the content going forward, they could be setting themselves up for failure,” Childress warns. “Obviously, creating and managing digital signage content is crucial — this is sometimes the last step in digital network design, when it should be the first.”

Every vendor interviewed for this story emphasized the importance of managing content for these solutions. Helping customers determine how and when content will be changed is not only important for the success of the project, it also can provide new revenue opportunities for the VAR.

“Underestimating what makes up a complete digital signage solution is a common mistake,” Alverson says. “VARs need to think about all the things needed to complete it. One of the biggest pieces that is very important, and that offers resellers an opportunity to be an additional value to their customers, is content creation and management — especially for smaller end user customers who might not have the resources to manage these systems themselves.” Work closely with customers to determine the goals of the digital signage solution. Where is the return on investment coming from, and how do you measure the solution’s effectiveness? Can the network be expanded and upgraded later if necessary?

Other elements to consider include mounting solutions, financing, building code requirements, security measures, the effect of ambient light and weather conditions on displays, and the up-front cost to the VAR of content management and maintenance. Power management is another important factor that is often overlooked.

“Another mistake we see when implementing a digital signage solution is the misconception that the power supplying the network is 100% reliable or that someone has already addressed any power quality issues,” Walsh says. “These misconceptions can leave the network susceptible to power disturbances that not only cause disturbances to the network, but actually do damage to the microprocessors in the system. VARs need to be sure there is adequate power protection on all power and data lines connected to your digital signage network.”

Finally, large deployments can present a challenge for VARs unaccustomed to the requirements of an enterprise-class digital signage solution. “Most VARs underestimate the amount of resources and time required to fulfill a bid for a large-venue or enterprise-scale digital signage project,” Prewett says. “Larger venues require three to six months to test and stage a working solution before the initial rollout begins. A full rollout could take up to one year and ongoing maintenance thereafter.”

Software Can Present Integration Challenges
Digital signage software solutions (which are available as on-premise products or in a hosted model) are numerous and varied in terms of capabilities. “There are more than 200 digital software providers in the United States alone, and many are smaller companies with very little support services and channel experience,” Childress says. “As you decide which software to utilize, ask for references and visit site installs that have been up and running. Many software companies also specialize in specific vertical applications like healthcare, menu boards, wayfinding, or corporate communications. So, one size doesn’t always fit all.”

Make sure the software application is appropriate for the actual solution, that it’s scalable, can integrate with thirdparty solutions for data input, includes scheduling capabilities, and if necessary, can provide data that the customer can use for analytics. For VARs, gaining expertise on multiple software solutions is recommended, so that you can offer a variety of options to customers.

“Make sure you are an expert for at least two different software solutions, as customization and scalability tend to drive the success of a digital signage solution for a longer term,” Prewett says. “Before selecting a vendor of choice, be sure to check their references and their solution partners for viability.”

Digital Signage Will Become More Interactive, Analytical
In the coming years, expect to see increased performance and cost-effectiveness from digital signage solutions, as well as more interactivity and larger format touch screens. “Digital signage will become more about analyzing the audience viewing it, such as the counting of the number of people who viewed and their dwell time,” Walsh says. “This ‘pay-per-view’ can be used to bill advertisers, for example, much like Internet advertisers use pay-per-click.”

Integration with additional technology will also play an important role in the future of digital signage. “I believe the real game changers will be more creative, less expensive, and easier-to-use software applications; the continued growth of mobile computing applications with tablet PCs; and the ongoing developments of social networking crossing over into commercial markets,” Childress says. “The smartphone market growth alone has led to new solutions like close proximity marketing via Bluetooth, more targeted electronic coupons, facial recognition analysis, and real-time feedback.”

Growth forecasts for digital signage are encouraging, with estimates ranging anywhere from 20% to 30% over the next five years. Intel recently published an updated projection that indicated 10 million media players and 22 million digital signs would be deployed worldwide by 2015, representing a 35% compound growth rate from 2010. As these solutions evolve, savvy VARs should position themselves to be the go-to provider for digital signage with their customers.