Sendik’s Food Market
In order to effectively communicate with its customers, while remaining cost-effective on the back end, Sendik’s Food Market implemented several NEC V421s, NEC’s CMS and the VUKUNET ad serving platform.
- Customer: Sendik's Food Market
- Location: Nine stores in the greater Milwaukee metro area
- Challenge: Communicate more effectively with shoppers
- Solution: 42" NEC V421
- Date: October 2010
Procter & Gamble Co. defines the “First Moment of Truth” for consumer packaged goods as the three to seven seconds after a shopper first encounters a product on the store shelf. In their estimation, that brief period of time is all retailers have to influence purchasing decisions and turn browsers into buyers.
Since its founding in 1926, Milwaukee, Wisconsin-based Sendik’s Food Market had relied on paper signage to help shoppers make decisions during that First Moment of Truth. Printed posters, circulars, shelf talkers and other materials attracted attention and kept shoppers informed of special offers, weekly sales and other information.
As the face and pace of the grocery business has changed over the last few years, Sendik’s was finding that generating paper signage cost too much to produce and set up in the store, and that it limited the store’s ability to react to market pressures, particularly price fluctuations. The socially responsible retailer was also concerned about the environmental impact of using so much paper for so little time. Ultimately they determined that they needed a less costly, more agile and more attractive means of delivering information to shoppers.
The razor-thin margins in the grocery industry constantly put pressure on retailers to drive down costs. But in 2010, an economy in its third year of sluggish performance, coupled with a spike in wholesale costs due to rising gas prices, brought a new sense of urgency to the need for cost-cutting.
One area that came under scrutiny immediately was printing costs for in-store signage. While it is critical for shoppers to see information about featured and sale items during their First Moment of Truth at the shelf, it was becoming increasingly difficult to justify the cost of producing, printing, transporting and putting up the signage in the stores.
“Like everything else, printing costs had gone up in the last couple of years,” said Paul Doty, director of information technology at Sendik’s Food Markets. “The process was getting difficult to manage, and we were finding that sometimes the sale was nearly over by the time the printed signs appeared in the stores. We knew there had to be a better way of delivering this important information to our shoppers.”
The Sendik’s management team thought digital signage might provide the alternative they were seeking. While the creative costs would be roughly the same, the printing, shipping and in-store labor costs would be eliminated, and pricing information could be changed in minutes if market pressures required it.
To test the viability of the concept, Sendik’s installed digital screens in the break rooms at its stores. While they liked digital signage as an information delivery medium, they found the particular brand they had chosen did not have the durability required for the retail environment.
“Our stores are open 14 hours every day,” Doty said. “We knew if we were going to commit to digital signs, we had to have units that could handle that type of workload year after year, and that we needed a manufacturer that had a strong enough service organization to make repairs quickly if a unit did fail.”
With a plan to install roughly 25 digital signs in each of its nine stores, Sendik’s knew the company was making a huge investment. After reviewing the specs, reputation and in-use performance of several brands, Doty and the management team made its selection.
Sendik’s chose the NEC V421, a 42”, 1080p HD screen designed specifically for continuous duty in tough environments. The V421 features a public display-grade panel to protect against permanent image retention, an input panel that allows connection to DVI through HDCP along with HDMI, VGA, composite, S-Video and component options and Ethernet and RS-232 jacks for remote monitoring and management. To complete the package, Sendik’s also elected to standardize on the NEC CMS for creating and displaying the digital signage as well as its direct interface to the VUKUNET Ad Serving Platform.
“The NEC V421 really delivers a lot of value for the money,” Doty said. “Although it’s affordably priced, the resolution and color are outstanding. It’s built like a tank, too, and we are able to use the built-in scheduler to shut them down when the stores are closed to save energy. We’ve had the displays in our stores for more than a year, and they’re working flawlessly.”
Unlike many grocery retailers that only put up a couple of signs near the checkout stands and a handful in other areas, Sendik’s has made a huge commitment to its digital signage.
“When you walk in the store, you will see two to four of them immediately,” Doty said. “One will usually have a welcome message, while the others provide information on sales and specials. Each department has between one and four digital signs as well, strategically placed to work with the flow of traffic. If you follow the normal pattern within our stores, you will view all of them.”
In most cases the signs call out sale pricing for items within the department, focusing on the top items in the department for weekly sales ads, just as the company did with its printed signage. Sometimes, though, a sign in one department will tease for the one to follow, such as promoting cheese within the wine department.
“The NEC displays are so easy to control and change that it gives us the opportunity to experiment with different concepts to see what spikes sales,” Doty said. “If we have an idea today, we can have it up in the store tomorrow. We’re also using the signage to help us build the Sendik’s brand, such as promoting our red, reusable bags and the fact that we’re saving trees by going electronic. It seems like each week, we discover new ways to take advantage of our digital signage.”
By using the Web-based interface, changes can be made to the presentation and quickly downloaded to the local screen in fewer than five minutes, all without the need to build a dedicated digital signage backbone.
“Our creative department really loves the ease with which they can create digital signage, and the creative freedom it allows,” Doty said. “They really don’t like creating paper posters anymore.”
Store labor costs for advertising sales have been reduced to nearly nothing since the digital signage can be centrally managed. But the program has always been about more than saving money. Additional savings was achieved thanks to the complimentary NEC CMS that delivers fantastic performance.
“No one else in our area is doing anything like this,” Doty said. “There is a real ‘wow’ factor. Our stores were already very different than the typical generic supermarket, and now the digital signage really makes them distinctive.”
Another advantage is the greater ability Sendik’s has to communicate with its customers. One example Doty cites is what happens when the company receives a price break from one of its suppliers.
“Suppose our produce director gets a deal on strawberries for three days,” he said. “The stores can advertise it instantly and pass along the savings, helping shoppers save money while spiking store sales. These days, retailers have to be completely transparent with their customers and communicate with them. Our NEC digital signs make it easier for us to be transparent and be more responsible to the shoppers we serve.”