By Burt Helm
Flat-panel TVs are cool. Retailers know that, too -- and they're using them to woo you.
As you hit the mall this holiday season, expect to see these sleek screens -- from large wall-mounted units to tiny four-inch displays embedded inside cases -- staring at you from more places than ever. Increasingly, retailers are not only using them to play commercials but also loading them with eye-catching video to draw you inside their store and enhance the experience while you're there.
MORE THAN SHOPPING.
The concept of using TVs in stores has been around for a long time. But in the past, you could find them only in such large chains as Blockbuster (BBI ), Wal-Mart (WMT ), and Best Buy (BBY ). And the content wasn't exactly appealing -- mostly a series of ads, ranging from movie previews to special in-store sales and promos.
But as costs steadily fall, "digital signage" is working its way into high-end and mass-market retail alike. And rather than using them to explicitly hawk products, retailers are embedding these slim-profile screens into walls and display cases to push their brands more subtly while also embellishing their décor and bringing the atmosphere to life.
At H&M's flagship store on Fifth Avenue in New York City, customers are bombarded with music and fast-moving videos presented on clusters of small flat-screen TVs behind the cash registers. The Swedish clothing giant draws huge crowds -- and often long lines -- and the TVs are there to entertain the masses while they wait. "I like it a lot," says Bridget Heliak, a 17-year-old shopper visiting from Buffalo, N.Y. "It really gives you something more to do than just shop."
DRAWING CUSTOMERS IN.
Retailers are learning: The screens attracts customers like moths to a flame. And part of the allure is in the ability to customize. At a Lazarus-Macy's store in Cincinnati, flat screens show Ohio State football games each Saturday, helping to attract foot traffic. "It's suddenly now a draw for husbands to come in and watch the games" while they shop with their wives, says Jim Crawford, a Columbus (Ohio) retail-technology consultant who has worked with Macy's.
More important, small screens can make a customer focus on specific products. A new display at select Neiman Marcus stores for Nokia's (NOK ) Vertu -- a luxury line of cell phones that retail for $4,500 to $8,000 each -- is a glass cube with a four-inch LCD screen at the bottom. That way the phones rest on top of a moving picture.
"You have almost $100,000 of merchandise sitting in one square foot of space," says Kristopher Kargel of Chippenhook, the Lewisville (Tex.) concern that designed and built the display. "So you need to create something to draw the customer in." Kargel says in the last year he has experienced a surge in client requests for displays with integrated digital video components.
While the TVs themselves are a draw for customers, their versatility attracts retailers. "With multimedia we can be more nimble," says Michelle Barlow, Bank of America's (BAC ) manager of environmental communications. In 360 -- and counting -- of its 5,800 branches, the bank has incorporated flat screens into the walls. They show ads about various banking services and play CNN and CNBC to entertain customers during peak waiting times.
Barlow says Bank of America expects to add screens at 100 to 300 more branches this year. "We can very quickly update our advertising" or switch over to a TV format, Barlow says, because it's as simple as piping in new video over the network.
Retailers use providers like Premier Retail Networks, DMX Music, Creative Realities, and Screeny Media, a French company that's now expanding to the U.S. to distribute content into stores. As in the model used by big-box stores, shops download the video from a centralized server maintained by the providers either via satellite or broadband Internet connection, then feed it to the screens.
But while San Francisco-based Premier Retail Networks, the major provider to Wal-Mart and Best Buy, distributes content and sells ad space to outside companies much like a normal TV station would do, competitors charge a subscription fee and offer a higher level of customization. Carlson Wagonlit Travel, an agency in France, uses the Screeny Media service to display daily package deals -- including images and video of destinations and current price information -- on the plasma TVs in its store windows.
Even bigger plans are in the works. As this technology continues to mature, providers are hoping to make more sophisticated customizations available on their networks. That means creating not just digital but also "smart" signage -- store displays that integrate with inventory data to push certain products and change to target specific customer demographics. Someday soon, the TVs will be watching you, too.
Helm is a reporter for BusinessWeek Online in New York
Edited by Rod Kurtz