How to Measure the ROI of Digital Signage in Retail
- April 3, 2024
- 10:37 am
Digital signage is a game-changer for retailers. While a recent Yodeck survey shows 89% of retailers agree it increases sales, its benefits extend far beyond the cash register. This versatile technology enhances the entire customer experience. But to unlock its full potential, retailers need to understand how to measure its impact.
This article equips you with the knowledge to evaluate your retail digital signage ROI, guiding you through everything from choosing the right measurement methods to calculating dwell time.
Measuring Success: The ROI of Retail Digital Signage
Digital signage isn’t just about boosting sales (although a Yodeck survey shows 89% of retailers agree it does that!). It can enhance the entire customer experience. But to unlock its true potential, you need to understand its impact on your business.
Here’s where ROI (Return on Investment) and ROO (Return on Objectives) come in.
ROI vs ROO: Choosing the Right Metric
- ROI: Focuses on the bottom line. Did the signage directly increase sales? This is a good choice if your primary goal is financial gain.
- ROO: Considers broader business goals. Did the signage improve brand awareness, build your customer database, or make navigating your store easier? This is ideal if you have wider objectives.
Step 1: Define Your Objectives
The first step is to clearly define your objectives. Are you aiming for:
- Direct sales increase (ROI)?
- Improved customer experience (ROO)?
- A combination of both?
Step 2: Develop SMART KPIs
Once you have objectives, translate them into measurable metrics using the SMART framework:
- Specific: Don’t use vague terms like “engagement.” Instead, use specific metrics like “dwell time” (average time spent looking at a sign).
- Measurable: Define your KPIs in clear, quantifiable terms like numbers, percentages, or timeframes.
- Achievable: Set realistic goals that average customers can achieve. Ensure you have the means to measure them (covered in the next section).
- Relevant: Your KPIs should directly reflect your objectives and accurately measure progress towards them.
- Time-bound: Set timeframes for the activities you’re measuring (daily, weekly, monthly, etc.)
Step 3: Choose Your Measurement Methodology
Selecting the right measurement method is crucial for assessing the impact of your signage. Here are four common methods:
- Surveys: Interview customers during or after shopping to gauge the signage’s influence on their experience.
- Social Media: Track consumer engagement by including unique hashtags on your digital signage for social media mentions.
- Unique Links/QR Codes: These allow you to track conversions similar to landing pages in digital marketing campaigns.
- Video Analytics: Use in-store cameras, footfall tracking, and customer Wi-Fi activity to understand how customers interact with your signage.
Step 4: Calculate Your ROI (Optional for ROO)
This step depends on your chosen measurement method. Here’s a simplified example assuming minimal investment in measurement:
- Compare your revenue during periods with the digital signage running to similar periods without it.
- The difference between these figures represents the estimated impact of the signage on your sales.
- To calculate ROI, subtract your digital signage costs from the estimated impact.
- Divide the remaining amount by the costs and multiply by 100. This is your ROI, expressed as:
(Estimated Impact – Costs) / Costs x 100 = ROI
This calculation helps you determine if the digital signage investment was financially worthwhile.
Standard Digital Signage KPIs
While your KPIs will vary based on objectives, some standard metrics are widely used in retail spaces:
- Average Dwell Time: Measures how long customers spend in front of a screen, indicating engagement. Cameras with facial tracking can provide accurate estimates. Aim for at least 0.7 seconds, the industry benchmark.
- Session Count: Another engagement metric, though less precise. Use cameras with computer vision, a click counter, or an auto-reset feature to track sessions. None of these methods are perfect, but they offer actionable data.
By following these steps, you can effectively measure the impact of your digital signage and ensure it’s driving success for your retail business. Remember, successful implementation goes beyond just installing screens; it’s about setting clear objectives, choosing the right metrics, and using the data to optimize your signage strategy.
AR Signage: Transforming Retail Measurement
Measurement is the lifeblood of retail success. Without understanding the impact of their efforts, retailers can’t improve. Traditional digital signage measurement can be tricky, but AR signage is changing the game.
AR to the Rescue
Delivered through mobile apps, AR signage interactions provide detailed consumer analytics like website engagement tracking.
Here’s how AR signage benefits measurement:
- Precision Location Tracking: AR apps use precise location tracking to create detailed 3D heat maps of customer movement within your store. This unveils traffic patterns and areas of high engagement.
- Detailed Interaction Data: The mobile app interface lets you see exactly how customers interact with AR signage. This allows you to analyze dwell time, specific content viewed, and even actions taken (like adding items to a wishlist).
Beyond Measurement
AR signage goes beyond just measurement. It offers a more engaging and interactive customer experience, potentially leading to increased sales and brand loyalty.
Imagine a customer pointing their phone at a product display and seeing it come to life with 3D animations or detailed information. This immersive experience can grab attention, educate customers, and ultimately drive sales.
The Future of Retail Insights
AR signage is poised to revolutionize retail measurement. By providing granular data on customer behavior and engagement, it empowers retailers to:
- Optimize store layout for better traffic flow.
- Improve product placement based on customer interest.
- Tailor AR content to specific demographics for a more personalized experience.
The Takeaway
While traditional digital signage has its place, AR signage offers a powerful new way to measure customer behavior and create a more engaging shopping experience. By embracing AR technology, retailers can gain valuable insights and unlock a new level of success.
