Digital signage: The signs are everywhere

Overall, the world digital signage systems market grew at a rate of 21.3 percent in revenue terms in 2006. The merchandising model is expected to drive the growth of deployments worldwide compared to the advertising model. Since the impact on ROI is measured in terms of increased brand awareness, the sales cycle tends to be much shorter. This is especially true for big-box retailers and major consumer brands.

"Frost & Sullivan expects network operators to embark on several pilot projects that will eventually evolve into full-blown rollouts providing the momentum for advertising revenue growth," said the analyst firm. "The success of these projects will help develop better pricing models and in-store media measurement standards."

In an interview with CRN recently, Daniel Hancox national channel manager at NEC, said higher-end display products give resellers an opportunity to make higher margins.

“Let’s face it resellers are better off advising a financial institution on the usage of digital signage and looking at these types of products. There’s definitely more of an advantage to selling a total solution than competing in the CE market, where end users can jump on the net and get a better price on a TV,” he said.

Andrew Shearer, product manager at NEC said the vendor has been involved in digital signage for the past four years. While it has been slow catching, according to Shearer the digital signage market has been consistent and he has rarely seen it stop.

“It’s almost exploding now, with a lot of businesses looking at implementing a digital signage solution. We have actually put a lot resources into our business and commercial area and we are doing the opposite for commercial applications products,” said Shearer.

Shearer said digital signage is not just one product. It’s a total solution which includes monitors, digital signage players and software controlling content creation, managed and hosted services.

“It’s always a total package, which gives resellers an opportunity to resell all their components from the integration of the package to maintenance of the products,” said Shearer.

Although Panasonic hasn’t dropped any of its CE products from the Australian market, the vendor is also looking towards digital signage as a viable market for its channel partners.

Mark Wong, national projects manager business systems at Panasonic Australia said the vendor started offering digital signage products about three years ago.

Through its reseller channel, Panasonic has completed a number of installations for various organisations including Phillip Island Tourist resort, Octopus Media Direct Factory Outlet stores in NSW, Victoria and Queensland, Billabong retail outlets and National Geographic stores.

“Panasonic has found that digital signage is a growing market with a great deal of potential. Our key challenge is educating the market in the benefits of this new medium. We do this by participating in major exhibitions, doing road shows and conducting training for our resellers,” said Wong.

The vendor has about 30 resellers and it prefers to work with a limited number of partners and work with them closely to implement a variety of digital solutions that would suit the requirements of the market.

According to Wong, in the early years of digital signage in Australia, adoption of the technology was mainly limited to airports, train stations and financial services. Now the vendor is seeing the retail sector (consumer goods, clothing), clubs and pubs, hotels and larger shopping malls incorporating digital signage as part of their marketing efforts to improve the customers’ experience.

“Australian retailers are very aware of what a digital signage solution is, we believe greater than 80 percent have seen or researched the technology. The other areas of potential growth would be clubs and pubs, real estate and hospitality,” said Wong.

Wong claimed AV/IT resellers need to understand the full benefits of a properly managed digital signage system and the impact it can have on sales and productivity.

“If a reseller wants to get into digital signage they must start to understand and address the real needs of the customer, and do a better job in educating the customer and partners in seeing the value of digital service. Have all round skills in displays, software, controllers, networking and content management,” said Wong.

According to Wong, the key is for resellers to package up their digital signage offerings, including the cost of operations and content creation and managed services.

“With a total package such as an effective and complete DS solution, there is less emphasis on price and more about the quality of service and ROI that can be delivered,” he said.