Dec. 1, 2009
Digital signage and digital menu boards have shown plenty of promise for quick-service chains, especially their ability to offer centralized control over promotions, price changes and menu rollouts. But the ruggedized screens' cost and limited warranties led brands to take a wait-and-see stance. Despite multiple tests the technology, large-scale deployments seemed far off.
The wait may be over.
In the last year, the price of indoor ruggedized LCD screens has dropped significantly — 23 percent according to a pricing study by self-service and digital signage software provider WireSpring Technologies Inc. And five-year warranties are becoming more common.
"For the first time, we're looking at a fully installed system in operation for about $4,200 at (a warranty of) three years, including maintenance," said Bill Gerba, WireSpring CEO.
With prices that low, operators will soon be able to achieve the return on investment of replacing printed point-of-purchase materials with promotional digital signage boards and digital menu boards. Those boards can promote by daypart and push limited-time offerings in a moveable, eye-catching manner printed materials could never achieve.
Scott Koller, executive vice president and chief operating officer for Wireless Ronin Technologies Inc., a turnkey provider of digital signage and interactive kiosk solutions, said operators are tired of the clutter from the amount of printed POP in their stores, and that material also has lost its effectiveness as consumers tune it out. Complying with two to three price changes and menu rollouts a year is another challenge.
"It's not only one thing tipping the bucket" leading to the likelihood of large-scale deployments," he said. "All of the above and a healthy dose of each that I have to do this in a digital format."
Koller, predicts three of the top five QSR brands will likely announce "some type of real rollout in the next six to 18 months." If national menu labeling requirements become law as part of U.S. health-care reform legislation, the deployments may come even sooner.
And operator need, technological advancements and price point are finally at a meeting point, making large-scale rollouts in the near future likely.
"It's all finally coming together," he said.
QSRs are particularly motivated by the opportunity to solve the "operational nightmare" of ensuring all their stores in compliance with current promotions, from printed POP materials to up-to-date pricing on menu boards. Digital promotional boards and menu boards can be centrally controlled, but they also speed up the delivery of materials because they can be uploaded across many stores at one time.
Koller said QSRs have come to accept that investing in digital menu boards will likely become an operational cost, especially as menus become more complicated. The key is to optimize the board's potential, using it as a marketing tool. New subhead here maybe?
While price has been one of the primary deterrents to brands' moving to large-scale digital signage and menu board rollouts, it's not the only one. The tightened credit market on top of the economic slowdown are other factors.
Gerba said franchisees typically have been reluctant to invest in digital replacements because the price of printed point-of-purchase material has been cheaper.
"Cost is the driver, and as much as everyone would like to see (digital signage) both improve sales and reduce costs right now, it's still a one or the other game," Gerba said.
But for those franchisees interested in rolling out or testing a digital solution, there are some compromises to deploying a full menu-board system.
Canada's Tim Horton's QSR chain recently installed promotional panels (where) and then go into some Tim Horton's stuff followed by below.
Digital signage and menu board providers haven't been waiting for the economy to improve in order to sell their products.
WireSpring has seen success with its Digital Signage Easy Start, a turnkey player introduced this spring. Small chains and franchisees with five to 10 stores have been deploying the player as a single digital menu board, a promotional panel or a greeting panel in entry ways. Once set up, the player requires little maintenance.
Digital menu board solutions provider Epicure Digital Systems, on the other hand, has focused on digital promotional panels. Investing in a single panel allows operators to benefit from digital technology at a much smaller investment than a new set of digital menu boards.
Harvey Friedman, Epicure founder and president, said he expects large chains, especially those with a franchise system, to rollout such promotional panels before they would digital menu boards because of the panels' greater return on investment.
The promotional panels allow operators to forego printed material and to use the panels to upsell, daypart and promote brand awareness. With enterprise level controls, brands can develop and schedule the deployment of their marketing calendar based on instant uptake. The digital panels also allow brands to be more nimble, whether shifting a promotion to a particular region or responding to a competitor's challenge.
"So you'll see that being deployed before you'll see a full-scale 15-foot menu board," he said.
Even as the market for indoor digital systems improves, digital signage experts do not see outdoor menu boards following suit. The cost to ruggedize those units is still high.
"It's a matter of hardware," said Wireless Ronin's Koller. "The software can handle outdoor, no problem. The hardware for five-year (warranties) doesn't exist."