Smart-Sign Technology: Retail Marketing Gets Sophisticated, But Will Regulation Kill It First?

by on January 12, 2010 · 29 comments

Today I appeared on CNBC [video here and embedded down below] to discuss concerns about emerging “smart-sign” technology, which could give rise to a new generation of interactive retail advertising and marketing efforts. This is in the news because, as Don Clark and Nick Wingfield report today in The Wall Street Journal (“Intel, Microsoft Offer Smart-Sign Technology: Retailers, Product Marketers Could Discern Viewer, Make Choices on What to Display and Transfer Coupons Via Phone“), Intel and Microsoft have announced that:

they will collaborate to help companies create and use new forms of digital signs. By exploiting Intel chips and Microsoft software, the companies hope to bring more interactivity to such devices and help retailers customized marketing offers to consumers.

Signs equipped with cameras and specialized software could recognize the age, gender and height of people in front of them, and tell what products and images received the most attention, the companies said. By gathering information about which messages are more effective, they add, traditional retailers could develop marketing approaches that better counter Web-based competitors. “Every year retailers lose more ground to online [sellers], and they have to do something about that,” said Joe Jensen, general manager of Intel’s embedded computing division.

Down below, I have jotted down a couple of thoughts about the rise of “digital signage” and more targeted forms of retail marketing, only a few of which I was able to get across in this short TV spot. I think it’s an exciting new development for both retailers and consumers for the reasons I explain down below:

  • Every new advertising and marketing innovation has been initially greeted with distrust or derision, but then is eventually embraced, or at least generally accepted. (ex: Ads were shunned at first for radio broadcasting, but then became an accepted part of the medium).
  • Targeted marketing has always taken place in the retail world.  In the past and still today, retail clerks and salespeople  approach women about their interest in perfume, and men to see if they are interested in a necktie or suit. Digital signage is just the next evolution of such targeted marketing.
  • Relevance has long been the Holy Grail of advertising & marketing. In the past, critics regularly complained about mass media advertising messages that was one-size-fits all.  And advertisers and retailers worried about inability to deliver product information to the right consumers.  New digital signage technologies can help change that for retail stores the same way contextual and targeted online ads have for the Internet.
  • This could really help stores better connect with their customers and perhaps help trim advertising budgets in the long-haul since ads might be more in line with actual demand.
  • In turn, smart-sign technology would also help consumers find more information and better deals about their preferred goods and services. It could be an interactive experience handled on your own terms. After all, you could always just walk away or ignore it entirely. Or you could ask for more information or get product materials or coupons sent to your phone or mobile device.
  • However, some products or services may prove to be too controversial or sensitive for digital signage displays. Examples might include: condoms, contraceptives, weight-loss products, etc.
  • But retailers know that and have very strong incentives to avoid embarrassing their customers or making them feel uncomfortable while they shop.  Thus, retailers will likely self-regulate and limit where and how digital signage is used.
  • Of course, some stores may shun the technology altogether because of the cost of the signs, or in an effort to differentiate themselves from competitors.
  • And consumers don’t have to shop at any store where they find digital ads annoying or intrusive. They can always vote with their feet and shop elsewhere.
  • Bottom line: This new advertising model is still in its cradle and we shouldn’t strangle it.  We should allow experimentation to continue and encourage advertisers and retailers to cautiously roll out smart-sign technology to see how consumers respond and whether it helps craft more targeted, sensible commercial advertisements.
  • Let innovation happen!

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