March 10, 2022
Digital signage drives significant ROI in retail environments.
According to a recent survey by Yodeck, 89% of retailers agreed that digital signage boosts the percentage of customers that buy. But digital signage can do much more than increase sales. In fact, this versatile and powerful technology can add value across the entire retail customer experience. But to unlock the tremendous potential of this tech, retailers, store planners, and commercial property managers first must understand how to measure its impact.
From picking your measurement methodology to calculating average dwell time, this article is your guide to evaluating retail digital signage ROI.
Jump to a section
Looking for more ways to elevate your retail experience with digital signage? Check out our article, Retail Digital Signage: The Ultimate Guide.
It’s important to note that return on investment (ROI) and return on objectives (ROO) are commonly used in the industry. This is because digital signage can grow the bottom line (ROI) and provide other vital services, like improved client experiences (ROO). Which metric you use depends on what you expect out of your digital signage. ROI may seem like the obvious — and only — choice for many retailers, but the tech can also help drive brand awareness, build consumer databases, navigate retail environments, all crucial elements of a successful retail business.
Measuring the performance of your digital signage starts with your objectives. If those objectives are purely financial (ROI), this step is more straightforward. If your objectives are broader or related to business goals, you will need to take some time to think them through clearly. Whatever they are, keep in mind that you will need to develop concrete KPIs — which we cover in the next section — out of them. This means that your objectives have to be reducible to relevant, measurable events.
With your objectives determined, it’s now time to develop the key performance indicators (KPIs) to measure using those objectives. When it comes to creating KPIs for digital signage, standard business metric guidance applies: You want all your KPIs to be specific, measurable, achievable, relevant, and time-bound (SMART).
One of the most critical components of assessing the impact of your digital signage is deciding on a measurement methodology. Every retailer and property manager should be familiar with the following four methods: surveys, social media, unique links, and video analytics.
Depending on your measurement methodology, there are several ways of deriving ROI figures in this space. Let’s assume minimal investment in that area and that you are simply comparing your revenue numbers while the digital signage ran to similar periods in the past without the signage. The difference between those two figures is the estimated impact of digital signage on your bottom line. To derive your ROI, you would need to subtract your digital signage costs — the total digital signage pricing or the cost to run during the period or some variation — from the estimated impact. Then, take what is remaining, divide it by the costs, and multiply it by 100. That figure is your ROI. This operation is expressed in simple mathematical terms as follows:
(Estimated Impact - Costs / Costs) x 100 = ROI
Calculating this figure will help you determine if the digital signage expenditure was worth it.Back to top
While your KPIs can vary depending on your objectives, a few standard metrics are worth mentioning due to their widespread use in retail spaces. These KPIs are average dwell time and session count:
Measurement is vital in business. Without a precise understanding of the impact of their initiatives, retailers, store planners, and commercial property managers cannot systematically improve their businesses. Although measurement in the digital signage space can prove challenging, new forms of retail displays like AR signage make generating these vital consumer analytics easier than ever.
Often delivered through consumer mobile applications, AR signage interactions can be attributed with as much detail and precision as website engagement. Retailers and property owners can use the app’s precision locational tracking to create a detailed 3D heat map of how customers move through commercial spaces, and the mobile application interface enables them to discover exactly how consumers are interacting with the AR signage.
Resonai is one of the leading providers of this innovative tech. Our industry-leading platform, Vera, provides everything you need to design, deploy, and manage AR signage in retail environments. Contact us today to set up your free demo.
Retail digital signage is in a period of massive growth across a wide cross-section of industries....
Understanding the types of retail signage and their use cases is an important aspect of generating...
Your store layout is one of the most profound methods you have to influence customer behavior. By...