High street spending

The current banking crisis and credit crunch are reported to be affecting all aspects of our lives: cash is scarce, belts are being tightened, banks are closing, consumer confidence is low. So how is that affecting the EMEA retail industry, and more specifically the installation of new equipment and technologies in stores? Steve Montgomery finds out.

Stuart Thomson, Managing Director of CUK Audio finds a mixed situation: “The current economic downturn is hitting mid-range retailers: medium sized chains selling at average price levels. At the low end, retailers have been used to cutting costs to the bone and may drop their standards a little but will continue much in the same vein. At the very top end, the prestige brands are carrying on as ever; their customers still have money to spend and it has not affected investment plans in shops and outlets.” One area that may be affected, although this is not yet readily apparent is global expansion. Stuart continues: “Some of the UK’s very trendy retailers are achieving high levels of popularity in the USA and going through rapid expansion programmes there with all that entails.”
Across Europe the picture is much the same, Ignasi Call, General Manager of Barcelona-based audiovisual integrator Instronic: “Our activities cover over 500 retail units throughout Europe annually for clients such as Mango and Nike. These companies believe that in order to compete against the internet they have to improve the shopping experience in terms of sensory innovations in touch, smell, sound and visual aspects. They need to control all aspects of communication and be well prepared in their international operations and expansion plans if they are to succeed on a global scale. Banking is another case of concern in the current climate, although the long-term nature of their plans means that we are currently working on decisions and objectives set in 2007. Next year may be another story.”
Mood Media, the largest international provider of retail media solutions to brands such as the Cooperative Group, HMV and Toni&Guy TV as well as international brands including Volkswagen, Vodafone, ING offers some hope. Tibor Kovari, Mood Media’s UK managing director, “During a cost conscience time, retailers are increasingly looking for real return on any investments they make”. Brands spend a lot of money each year on traditional above-the-line media, such as TV, outdoor advertising, sponsorship and radio. Now is a good time to look at this expenditure; challenge the ROI and think about re-investing it at a point where sales can really be influenced, at the point-of-purchase in-store. Many of our customers consider retail media as an opportunity worth looking into and specifically digital networks and in-store advertising. Advertisers themselves are also keen to promote their products in-store and this industry has a lot of value to add to the retail market.”
What is apparent is that retailers have been and are continuing to invest in quality AV systems in order to attract customers and retain market share. Stuart Thomson: “Without question retailers all understand the importance of high quality audio, linked to in-store video and are prepared to invest heavily in it. Shops nowadays have similar set ups to night clubs with wireless antenna distribution for DJs, allowing them to host special events, top level lighting and sound systems that can deliver a sound level of over 110dB.”
The larger supermarket chains and banks are also investing in complete systems. Supermarkets must retain market share and see in-store TV information and advertising as a way of enhancing the customer experience. Banks are installing ‘banking radio’ networks aimed at entertaining and informing waiting customers in order to make the visit more pleasurable. Studies have shown that making a bank more ‘homely’ with sofas, pastel colours and audiovisual systems increases customer dwell time and lowers stress levels.
However, it is counterproductive to install high quality audio and a sound system and then just let local staff play their own DVDs or iTunes tracks. Most audio and video distribution is delivered to stores in a highly controlled manner, using satellite or IP distribution to solid state storage players. Or by means of flash memory or MP3 storage on iPOD or similar devices. Local control of volume is maintained in zones to match the ambient noise. Audac’s MICRO series offers a convenient way of installing a zonal system with slave amplifiers that also have mini-jack and USB charging sockets on the front panel for connection of an MP3 player with local source selection and volume control. The company’s 2 inch in-ceiling speakers can be mounted in the same profile as low voltage downlighting and have frequency response as low as 70Hz. Allowing simple and effective installation of high quality audio within ceiling spaces that are becoming more and more filled with electronic and service equipment as greater demands for security and safety equipment take up space.
With the increased sophistication of distributed content, comes the ability to offer additional services as an extension of the system into other areas. Inout’s Replay solid state audio server offers a complete range of inputs and outputs and includes a sophisticated playlist scheduler, together with a DCF77 antenna link to the European standard clock and multiple switching contacts so that highly accurate timed control of peripheral services can be set up for lights, air conditioning and other services in store. Taking the concept even further allows full remote control of systems over networks.
Igor Horvath of Citylight Slovakia has supplied the Slovakian CroppTown clothing chain with systems based around Ecler audio products, again these are used for general audiovisual presentation and for special events with DJs and hip-hop artists: “With over 50 shops in a network calling for the best possible quality sound systems at a cost effective price the Ecler solution is ideal. We have coupled their MPA remote control amplifiers, DPA 600 amplifers and Dacord 10 speakers with AMIC audio processors to deliver fully controllable sound systems that can be controlled over the web. This allows us to deliver new content, set up time of day schedules and adjust all parameters of the system, including volume and compression, in any of the individual shops from our office.”
Another factor of the audiovisual installation in retail environments is that of the complete shopping experience and how far the installation, and content goes in providing a ‘brand experience’. Ruth Simmons, Managing Director of Soundlounge: “Research has shown that the wrong audiovisual content in shops can drive people away; in fact in one study the conclusion was that up to three out of four shoppers might leave the store because of it. In a shop taking £100,000 per week, that is a considerable amount of lost business. In one instance we observed a major high street chemist playing loud rock music over the analgesic drugs.” Julian Treasure, Chairman of the Sound Agency and author of the Sound Business book concurs: “Sound and video presented to customers in shops must complement the hundreds of thousands of pounds spent on visual design and branding. Whilst it is important to strive for the best possible sound reproduction, as many retailers do, too many retail soundscapes are arbitrary, hostile and incongruous with music that is selected at random in noisy environments and doesn’t match the brand message. Audio and video are very powerful messaging mediums, Charles Spence of Oxford University recently found that a positive audio experience can increase the value of a brand by up to 1200%, whilst a negative one can reduce it by 86%. Which suggests that the cost of selecting the wrong material has a significant effect on the bottom line.”
Digital signage plays an important part in the retail environment and beyond, leading customers from the street and transport systems into malls and shops and on to a purchasing action. Sid Stanley, General Manager of Sony Retail, Transport and Venues believes that in future it will be the predominant method of communication: “Currently the technology is still slightly ahead of the content and the power with which it can be used. Digital communication and display are robust technologies that can operate in real time. Their power lies in the immediacy of response which is starting to be leveraged. For example banks and cinemas both have products that are associated with rapidly changing data; in the case of banks, commercial environment and money market rates can affect the immediacy of their offerings, and in cinemas the approach of the screen time and seat take-up affects seat and beverage sales. Both can take advantage of the rapidly updatable capability of digital communication.” This is encompassed in the next generation of digital signage solutions to be offered by Sony within its Ziris range. Sid Stanley continues: “The use of metadata and instantaneous analysis of customer behaviour will drive future systems. This is not limited to direct interactivity with customers, but the interaction of external events and inherent commercial activity with promotional messaging. For example, the system will have several pre-programmed scenarios that are selected and run as a consequence of reports by smart devices responding to data from the EPOS system on which items are in short supply or not selling, Or from customer counting systems and gender analysis tools that determine the demographic structure of people in the shop at any given time.” Even simple weather stations could be linked in to allow the system to automatically select appropriate promotions.
The convergence between AV and IT is emerging as a dominant force in many sectors and one that is becoming a critical factor in the way traditional AV integrators operate. Fortunately most are able to take this convergence in their stride. Powerful processing of graphics local to the display means that content can be delivered as packets and stored on site; allowing what would once have required a complex delivery mechanism to be achieved using off the shelf network equipment. Sid Stanley: “When you consider that the graphic chip used in the Playstation 3 is ten times more powerful than standard microprocessors you realise that systems with enormous levels of features and quality are achievable; which results in the ability to create large, multi-screen, multi-image displays such as the recent installation at World Duty Free in Heathrow’s Terminal 5 and a similar installation at the National Geographic store in London.”
It remains to be seen exactly how hard the credit crunch and predicted recession will bite the AV industry. Indications are that we will not escape, but a sensible, long-term and committed approach by both retailers and system integrators should lead to future stability and ensure survival. Not an embarrassment of riches, at least not just yet.

Article Categories