Adapt Or Perish – 2020 Has Changed The Digital Signage Business
June 19, 2020 by Dave Haynes
If there is anything clear about the future for the digital signage system, it’s that it will be different. Some of the vertical markets that have seen the most activity have been changed, probably forever, by the social changes brought on by COVID-19.
Key verticals like workplace communications, retail and food services are all going to work differently for the near term, and in some cases, the long term.
One of the hottest vertical markets has been workplace, and it is clear that workplaces are going to be different when lockdowns ease and people are allowed to go back to their offices. The big difference – many people will not be going back.
Big tech companies like Facebook, Twitter and Shopify, as well as banks and insurers, have all announced Work From Home can now be a permanent thing for its staff, and the same thing is happening across companies of all sizes who have maybe resisted remote work. Having been forced into it, the bosses have realized it is workable, productivity is not the issue they feared, and the big one – operating costs can be trimmed if they don’t need as much leased office space.
On the flip side, NOT encouraging WORK From Home means re-working office layouts and creating more physical distance, particularly in open floor plans where staff were somewhat packed together. More distance probably means a requirement for more leased space, which means more cost.
The one piece of good news in that is that costs per square foot for office space will probably be lower, as the shift to Work From Home really takes hold and leasing arrangements are renegotiated. A lot of office towers and campuses will have For Lease signs in 2021 and beyond.
Work From Home has knock-on effects for many, many businesses. If not as many people are having to go into the downtown areas for work, that impacts all kinds of supporting small businesses that make coffee, serve lunch and print stacks of presentations for office clients. It means fewer people are shopping on lunch breaks and after work.
Remote work also means that in big cities, singles and couples wedged into ghastly expensive but cramped apartments and condos – so they can walk to work and “experience” urban life – can abandon those arrangements and move back to where they grew up. As long as they have good internet connectivity, and can be 60-90 minutes from a regional airport, they can work at home in a 3,000 square foot house with a yard that cost less than a 1 BR in a big city’s central business district.
Nothing’s going to get most born and raised New Yorkers fleeing their beloved big city, but there are millions of people who’d very happily live back in rural Indiana, or wherever, than fight their way into downtown Atlanta, Dallas or Chicago everyday.
If a percentage of affluent knowledge workers leave the city center and decidedly urban neighbourhoods, the hipster restaurants, artisanal cheese shops and dog biscuit bakeries lose that core clientele, and maybe can’t operate at a profit. Instead of a Whole Foods or Trader Joe’s, there will be a 7-Eleven – because the demographics will have shifted.
The enforced closure of businesses has changed how we shop. Order-ahead and curbside pick-up is now available for retailer operators who never contemplated that being a need or interest of their customers.
Right now, the digital signage side of retail operations are about utility – managing access, communicating changes and limiting contact. That will shift back, as things settle down, to the need for many retailers to deliver on experience. Lockdowns forced billions of people to order everything from groceries to gazebos online, for home delivery. While probably imperfect in many cases, it mostly worked out, and consumers are now familiar with the process and conditioned to it.
That means some retailers, particularly in the central business districts of large cities, may be more like showrooms than stores that hold a lot of inventory. For example, the Canada Goose store in Toronto that emulates Canadian winter conditions, year-round, so shoppers can try on and test coats. You can buy a coat there, but not walk out with it. It gets shipped to the customers, as the store doesn’t keep inventory.
So what does all this mean to digital signage?
For workplaces, the opportunity may be reduced in white collar environments that are centered on offices. The need to effectively and immediately communicate will always be there, but there just may be fewer displays and software licenses.
The still untapped opportunity is in non-office working environments like manufacturing, processing and distribution. These are workplaces that can’t really do Work From Home. Operators can’t bring their CNC machines home. They’re also places that have few effective methods for communicating with employees, and where digital displays are particularly effective.
Health care environments are also largely untapped, apartment from donor walls, wayfinding and waiting room screens put in by media networks. The value of signage there is huge, but those organizations are busy with something else right now.
For retail, a hell of a lot of operators are shell-shocked at this point, and wondering about the next quarter, not the next five years. But those who come out of it, maybe leaner in store count and staff numbers, will be looking for digital to help drive tweaked environments. The value of interactive will be escalated, as will things like remote expertise via on-site video calling.
The need for bright displays in building windows and outside on sidewalks and plazas has likely gone up.
Those digital signage ecosystem people who sell solutions, and not just gadgets, will get a better reception.
Display and interactive technology that delivers on visual experience and makes activities faster, easier and generally better will resonate. Video walls and LED still have big potential, but you have to wonder if all of those commercial property companies who were investing millions in experiential lobby LED walls to attract and retain tenants will continue with that approach. They may be competing, instead, on cost per square foot. The wow factor may be the price, not the LEDs and cool motion graphics in the lobby.
Broadly, this may well be a golden age for digital signage technology. The need for effective, immediate, compelling and hyper-relevant messaging has probably never been higher. But it will take a lot of probing of customers and careful product planning to meet needs and resonate with end-users and partners.
Those company leaders who are sitting around waiting for things to go back to normal are in deep shit, because their normal is probably gone.
Well thought out and well written Dave. Thanks for that.
Convincingly argued and clearly explained, thanks