In-store digital marketing is nothing new. Digital signage and kiosks have been around longer than we care to admit. And frankly, traditional vendors aren’t driving the new industry excitement. There is something more brewing. And it’s big. Really big. So why are we seeing such an explosion of activity right now?
I just finished watching Chernobyl on HBO. Wow! What a story. What a mobilization effort. What disaster and yet heroism. What comes out is that the blast of Chernobyl was a perfect storm of factors. A reactor core too far cooled down such that limiting and accelerating factors like steam and heat had been removed. Cooling rods that were completely disengaged. A power surge to raise the core that stalled until it started gaining self-enforcing momentum. And then the accelerant of the graphite of the cooling rods that hit all at once as the emergency shutdown was initiated. BOOM!
I see these factors here in in-store retail marketing technology except the explosion is a good thing, and not a tragedy. It may not happen in an instant, but the magnitude will be astounding. We are seeing a confluence of 6 key factors.
1) Physical retail is rising up to the threat of eCommerce and the Amazon effect.
Remember the Retail Apocalypse? Ahh, that was so 2017. After feeling the pain of eCommerce shifts and Amazon grabbing half of eCommerce growth, physical retailers have started fighting back, investing in stores to compete where Amazon is weakest (for example, the only negative growth on their earnings was there physical retail channel, despite investments). Yes, stores. Stores where the cost of acquisition is lower. Just ask all the DNVBs that are opening stores as they struggle to scale. Or Warby Parker which sells more in-store than online. Yes, stores. Where customers are more profitable. Where customer loyalty is more influenced. Where return rates are substantially lower. Yes, stores! Billions are being spent investing in stores.
2) Shoppers consume digital media at unprecedented levels and demand it in-store
If you read Mary Meeker’s Internet Trends report, as I do every year, digital media consumption is staggering. We’ve all become addicted to always on, rich media. We demand it in our product discovery. Videos. How tos. Ratings and reviews. Specs. Colors and sized. Related products. Discounts. All of it. In fact, when you walk into a store without digital, it feels benign. With millennial audiences increasingly commanding share of spend, digital is increasingly a mandate to create an engaging in-store experience.
3) Content marketing assets are already developed
Content marketing is already king online. There is so much content being developed to aid the digital discovery journey and it’s already paid for. Videos. Explainers. Influencer content. Ratings and reviews. Every brand has a wealth of digital assets that they can combine to create compelling in-store experiences. Just take a look at our customer showcase to see the varying types of content our customers are bringing in-store. It’s amazing.
4) Hardware is becoming more powerful, affordable and reliable
All the hardware that we use at Perch has become much more affordable, reliable and we project prices to go down 10-20% YoY. The equipment we deliver has an expected lifetime of 6 years. CPUs are powerful enough for edge of the shelf computing including complex sensing and computer vision.
5) Computer vision is progressing at exponential speed
Lastly, computer vision has progressed more in the last 2 years than in the 10 years before it. The Internet of Eyes is being enabled at a remarkable rate. Computer vision libraries are incredibly powerful and we have access to more visual data than ever for our training sets. The velocity will continue based on the level of venture and corporate investment I am seeing.
6) Digital Marketing and Data Competencies Are Spilling Into Physical Retail
At almost every conference I speak at, the biggest challenge identify is cultural. In-store designers don’t want their creativity measured as sales lift. Data architects are few and far between. Data collection across the store is just starting and will open up treasure troves of insight but hidden among a an overwhelming sea of metrics, only some of them valuable. Cultural change is the hardest, which is why DNVBs have such an advantage in building that DNA from scratch. But that’s changing. Ikea is hiring 50 data architects. Nordstrom is acquiring. Walgreens has 300 engineering postions open. Organizations are building those digital marketing competencies that feed off data. And digital is where data rules.
So if you are an early innovator in product engagement marketing and Physical+Digital displays, it’s a tremendous time. The number of Perch displays exploded, growing 7.9x YoY. We are seeing mass market deployments at Macy’s, J&J, Invisalign, Barnes & Noble and many more. Are you ready for the digital retail tidal wave?