Electronic message centres (EMCs) positively influence retail transactions and increase sales, according to new research from what is reportedly the first study to show the economic value of this specific form of signage.
The University of Cincinnati’s (UC’s) Economics Center in Ohio conducted the research on behalf of the Signage Foundation, focusing on the economic impact of outdoor light-emitting diode-based (LED-based) message boards. It found stores that had installed these variable-message displays, also referred to as digital signs, enjoyed increases in ‘destination’ transactions (i.e. purchases of products the consumers went to the store specifically to buy), ‘convenience’ or ‘impulse’ transactions (i.e. unplanned purchases) and total transactions.
The study also found the break-even point for an EMC installation’s return on investment (ROI) ranged from three to 15 months, depending on labour capacity and other fixed costs.
“In most cases,” the authors write, “the installation of such a sign pays for itself in less than a year, then contributes positively to the business’ bottom line for the remainder of its operational life.”
The researchers analyzed data from 19 ‘test’ stores that had installed new EMCs between July 2010 and February 2012, as well as 55 ‘control’ stores that had not undergone any signage change. All 74 stores were part of the same large retail chain (not pictured). In this way, the study was able to observe the effects of EMCs on directly comparable businesses.
“At most of its hundreds of locations, this retailer has at least three types of on-premise signage,” the authors explain. “The most visible sides of the building have standard branding and descriptive wall-mounted signage. Secondly, pylon and/or monument signage with the company’s branding is used along the nearest major thoroughfare. And finally, a two-sided EMC is placed below the largest corporate logo on that pylon or monument sign.”
By using the ‘control store’ methodology, the researchers observed a 2.1 per cent increase in weekly store sales in the first year after the installation of an EMC.
“While this overall lift in sales is modest, in a high-volume store with low installation costs, the technology’s ROI can be significant,” the authors write.
