April 14, 2021
The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT
One of the larger digital signage networks in North American retail has been quietly building upon in Sam's Clubs, the big box warehouse club stores that Walmart runs in competition with Costco.
There are 25,000 or so screens in the stores and the aggregate audience that sees those screens is somewhere between 25 and 30 million people, per month.
The network started with TV walls - with one media playout box pumping a signal to as many as 40 TVs. So that gets the numbers up. But Sams's Club has been adding more screens in the auto service area, at the customer service counter and in food services. It is even testing digital floor projections.
The network exists to boost the shopper experience and support brands that have product in these stores. The operating model is much more about generating ad revenues that cover the operating costs of the network than it is about a new revenue stream for Sam's and Walmart.
Digital signage veteran Mike Hiatt runs the team that operates the in-store media network, and he has a great perspective on what's been done and what to do now. He was with Walmart years and years ago when PRN had CRT TVs hanging from ceilings, in the retail giant's first iteration of in-store digital signage.
Susie Opare-Abetia runs Wovenmedia, the San Francisco digital signage content and solutions company that has been running and growing the Sam's network since 2014.
I had a good chat recently with Susie and Mike about how the network operates, how it's growing and what they have collectively learned about running a big screen network in a cavernous big box store.
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Thanks for joining me, Mike, I think most people will know what Sam's Club is, but could you give me the Cliffs Notes twenty-five words or less explanation for the people in other parts of the world who don't know?
Mike Hiatt: Sure. Sam's Club is a member retail organization, similar to Costco, and we're part of the Walmart family of retailers.
So it's a membership-based club big-box membership club?
Mike Hiatt: Yeah, if you've been to Costco, you're very familiar with Sam's Club. We've been competing with them for quite a number of years and there's a lot of subtle differences between the two, but they're both basically member-oriented clubs and member clubs create a unique perspective for retailers and we can talk more about that later if you're interested.
And you run the media group, Sam's Media group, right?
Mike Hiatt: I don't run the whole group. The entire group is all monetization, all the monetization tactics for Sam's Club that will include online, mobile as well as in-club. I handle in-club.
So basically in-store media.
Mike Hiatt: Correct.
All right, and Susie, your company is providing the software and the content solution and basically the overall solution for a rather large network, right?
Susie Opare-Abetia: That's correct. So we've been working with Sam's now since 2014 when we did office deployment and so they used our platform, which consisted of all software suites plus a content library to manage all of the screens in the clubs.
And what's the scale of this network?
Susie Opare-Abetia: It's actually pretty ginormous, you know, roughly about 20,000 screens across the chain, which is about 590 clubs. So you've got about, just North of 40 screens in each club, and that's in the electronics department, and currently in the term battery department.
So it's like a typical big box going back many years where they have a TV wall full of different flat-panel TVs, all driven by this one or maybe a handful of media players all pretty much playing the same content and you've also got stuff in the battery and tire area, and now you're expanding in other parts of the store?
Susie Opare-Abetia: Yeah, that's correct. So like you said, the TV wall and electronics, and that's essentially powered by BrightSign meaning the plans connected to a series of amplifiers and then we've got two screens in the tire and battery, ceiling mounted just above the tire and battery services desk, and then we just finished deploying a pilot in 55 clubs. That's super exciting. I'm showing Mike will talk more about it, but that's basically adding screens in the cafe. Six large 75-inch displays in a cafe, displays in membership, and then floor projection technology in the aisle basically.
And I'm jumping ahead of myself here, but I'm curious about what the floor projections will solve a lot about.
Mike Hiatt: It's an exciting opportunity for us in terms of looking at it, we've been running one-off tests for quite a while, just looking at technology and how we could maximize the floor and use it, ‘cause it's really just a Greenfield space, right? And Woven came to us with some technology that got me really interested, which was laser projection versus the LCD.
I had been looking at LCD optical technology, from these projectors for years, and went on to the Path to Purchase Institute and DSC and you'd always see the different projection technologies and I never was interested because I know I couldn't roll it and roll it to the scale that we needed it because I didn't want to have to get people up on ladders every year or less changing out halogen light bulbs, and it just was never practical for us to even consider it.
But then when Woven came back to us and said, “Hey, we've got this new technology we found that some of these new providers, or, some of these providers are now developing, which is the laser technology with no moving parts.” I got really interested, and so we started working that internally at Sam's Club, and we were able to put together this idea, which was, we could throw messages onto the floor and basically not have to compete with product facings and all the other stuff that you had to deal with when I was at Walmart having to deal with monitors on the shelves. You don't have to compete with the merchants, and it's great because your sightline is right there on the floor anyway. So it's not like you don't have to look up 20 feet in the air.
Is it purely for advertising or a kind of in-store promotion?
Mike Hiatt: We’re using it for both? One is we're putting in some projectors to promote our scan and go product, which is a great mobile product. If you haven't ever used it and if you're a member of Sam's, you should really sign up for that because scan and go is fantastic.
Basically, you can scan your own items when you're in the isles, and then you basically check out by just swiping your credit card that's already in the mobile app, and then you can skip the line, and so we created this fast lane just as mainly a way to promote the idea of scan and go. So we have dedicated a special lane in some of our clubs with the pilot test. There's a lane now, and then above the lane are two projectors that are just showing these really cool arrows using the projectors that kind of show your way out of the club, and it's just a fun way to promote the idea that you really should be using scan and go and skip the line altogether.
And of course, during COVID, this has been a really popular trend. You're not having to deal with going through the checkout line. You just scan yourself out, and you take off. So we are using it for that, and then we've got projectors that we're testing and still in testing mode. But testing that from a monetization standpoint, where we put supplier advertising or advertising products, all endemic on the floor inside what we call the race track or that main thoroughfare of traffic as people move around the club near the product. We want to have it obviously near the product where most displays are.
You mentioned monetization. I'm curious what the business model is, if you're using in-store promotions, you're doing endemic advertising for brands that sell in the store, and then maybe some third-party advertising.
You've got potentially a pretty big audience. Is the idea of the screen network for incremental revenues for the company, or is it a cost-recovery model first, and if you make some revenue beyond that, even better?
Mike Hiatt: That's a great question. It really acts as a way for us to put technology in the club to help the members experience.
Being a member club, club members think of us as a country club for retail. We take care of our members. We want our members to feel valued and we want them to have a good experience when they're in our clubs, even probably more so than say a particular retailer or grocery chain would, and it's because they pay money every year to participate.
And so as they come in, we want to make sure that the technology is helping them, and so as a part of that, the monetization piece, at least when it comes to the in-club area, we want to promote products that they're interested in, and of course, the suppliers want to do that as well. And of course, we want to charge them for that, and that allows us to do the cost recovery.
We're not focused on maximizing advertising revenue per se. That's not our main objective, even though if it happens, that's great, but that's not why we do it, and that's not the main focus, and so we're really not interested in non-endemic. Sam's Club has traditionally been, we've been focused on endemic advertising only, just because we're not trying to create a media network that spans beyond that.
Okay. So if I am a third-party brand, there'd be no reason why I would ever sell on Sam's Club, you're not really interested in their advertising?
Mike Hiatt: Not really. There are some opportunities we're talking about, some other tests that we're looking to do, but they're mainly out in the parking lot or out where the fuel screens are, the fuel pumps, but not inside the club.
Susie, how often does content change on the network?
Susie Opare-Abetia: So that's a really good question and it really depends on the channel. So for example, in tires and batteries, it's going to be changing less frequently, and you have the, like you said, seasonal promotions and specials depending on holidays and that kind of stuff, and then you have the menu board, if you will, of services, which is pretty fixed.
In electronics, it’s quite different. The monetization strategy really drives the frequency of updates if you will. In some cases, content’s getting changed on a weekly basis, in some cases, it's, a couple of times a week and in some cases, it's less frequent if it's more like an evergreen sort of seasonal content. But in general, the idea is just to try and keep the programming as fresh as possible in that department. So that, if a member is shopping with Sam, maybe a couple of times a week, they get to see a little bit of variety in that loop.
Yeah, I would imagine that there's a lot of thinking that has to go around the programming model because of that frequency and also because of sightlines, and I'm really curious to hear from both of you about TV walls and having a generic feed that goes across 40 different TVs and a whole bunch of different manufacturers and do they get fussy or are there any issues around what's on those screens, so that makes one look better than the other or whatever?
Susie Opare-Abetia: That's a really good question. I can talk to the tech piece, basically, what we're doing now with this, we're pretty much wrapped up with a third-generation platform in electronics. So we're delivering everything from delivering HDR, so the highest quality but then the tech is able to downscale that signal so that it was even for a very sort of low-end HD set. So the way the system works, it's pretty much agnostic to what you're feeding it. So we feed it the highest quality and the better sets get a better quality signal.
But in terms of the actual content, yes it's the same across all the TVs and maybe Mike can talk about how the different manufacturers get their share of time on the network.
Mike Hiatt: The short answer to your question is yes, they do get fussy.
I can tell you a lot of stories, but obviously, if you think about it, if you're a TV manufacturer, you want just to talk about your TVs all the time and so there is that fight there. But we believe strongly, the company as a whole believes strongly in a unified vision for the network where we have this one image that's running all the time. So we liked that idea of synchrony and pulling that together that Susie had talked about from a strategic standpoint because we feel like the club looks better versus the more chaotic version where you would have your own thing.
However, we do make accommodations for top-of-the-line models that they want to show off and get excited about, get people excited about what you'll see, like one-off kind of kiosks set apart from the TV wall and Samsung showing their Samsung content, LG is showing there content and Vizio and so on. So there is some of that there, but the majority of the screens are all playing the same thing, and then as part of our agreement with them is that we are there to support them as suppliers, and so we make sure that their content that they want to run is also part of the programming mix for the TV wall.
So as part of the relationship we have with them as strategic partners, we want to make sure that they're able to promote their TVs, even though there'll be Samsung content on an LG TV and vice versa, we have no problem with that because we want members to be able to compare and contrast TVs anyway and the only way to really do that very well is to be able to look at them, play in the same content.
Yeah. I could just imagine the conversations standing with a Samsung rep when it's an ad running on an LG TV or vice versa.
Mike Hiatt: Yes. (Laughter)
Sam's club is a pretty big footprint place with, I don't know, 40-50 foot ceilings and so on and a lot going on. How do you think in terms of sightlines and choices around content and how big a display has to be to suit the environment and the dynamics?
Mike Hiatt: It is a big space. It's really funny, I've always worried “Oh wow, these TV screens are just getting too big”, and when you're seeing them, like down next to you they look gigantic and then you stick them up on a wall and they're like, wait for a second, that's way too small.
So we live in that world quite a bit at Sam's when it comes to those kinds of things with sightlines. But I will say that the technology is getting there where it's affordable to bring in the big enough screens that we're starting to bridge that gap of where historically the screens were just a little too small and trying to roll that out across thousands of locations, the numbers really add up, and but I think we've turned that corner over the last few years where we can afford those 75-inch screens, which are more than fine when it is, in most situations, what we're trying to do, and in fact, in some cases, we're having to re-sculpt how they fit on the wall because we just don't have that much room to put these big screens. There's only so much real estate on the wall, so that's good.
That's all been good, and so I feel like we're getting to a happy place if you will, between the size of the screen and the size of the box, if you will.
So you've got 25,000 screens. What's the monthly audience, the aggregate audience?
Mike Hiatt: The audience that comes in is about 25 to 30 million per month that come into the club, and those numbers, COVID is really messed with us a little bit because we've had these giant groups of people come in, and then we've had some real swales like it's really hard to look at comparables over the past year.
And also our curbside pickup has gone way up too. So people that used to come into the club, a lot of them, because they don't want to be in the club due to COVID or other reasons that they're getting, we have a club pickup set up where now we just roll it out to their car, and they buy it online.
Yeah, I suspect there's a whole bunch of businesses that are going to have an asterisk beside 2020 and 2021 in any kind of timelines or story of their business, just saying this happens. So like the anomaly is explainable.
Mike Hiatt: Yes. Even though I know that our merchants are really struggling because, if you're the person responsible for toilet paper, for example, you had a great March 2020.
There's no way that your March 2021 is going to compete with it, so it's going to be interesting for all of us, as we try to create new baselines and understand, how we're truly growing
And because you do a card read every time somebody buys something, you know how many people are in the store, right? Or at least how many members, and if you extrapolate that, it's 1.2 people per card or something that you that's how you get to your 25,000?
Mike Hiatt: Yeah. We've also done viewership studies and we're doing some new technologies where we're able to track that more accurately. As far as the individual people that are in the club, you're right, we do have the ticket counts, but depending there are some variables there, you'd have to try to, like you say, model and extrapolate 1.2, for example, And and we do and can do that, but we're actually looking at some other ways to track it more regularly because typically our insights team, they like to keep some of that data close to the vest and not even share it internally.
Yeah, that was going to be my next question and I'll try it anyway.
Is there any data around the kind of cause and effect, if you put an endemic. Advertising piece up for let's say organic olive oil from Italy or whatever. Can you then look at the selling rates of that olive oil when it's promoted on the screens versus those times when it’s not promoted on the screen and say, okay, it bumped it by 10% or whatever?
Mike Hiatt: Yes, we can do that. We haven't done that as much, mainly because of just the issues that we have with resources. It takes quite a bit of work actually to do those types of reporting, and we spend most of that time on the online side of the business with our resources to do that. So there's been sales in the club, mostly as an awareness-building channel, and that you're reaching members in the club, at that zero moments of purchase.
And that's the kind of way we promote it more than trying to attach it exactly to the point that they had an opportunity to see this spot and then they went and bought the product.
It’s more like new on shelves?
Mike Hiatt: Yeah, exactly. The floor graphics pieces, I think are going to change that formula a bit over time as we learn and figure out exactly what we're looking to do with the floor graphics program. But I can see that be in a place where we would actually create custom reporting based on sales lift or what we call return on ad spends, or ROAS, for the floor graphics because it's very direct or that product is local close to those screens, whereas you remember, in Sam's club, the TV wall, for example, is way up at the front. So as you walk in, you see them but you're not exposed to those messages when you're back there in the freezer, buying frozen chicken.
So there's a real 50-yard disconnect between the media and the chicken. So trying to connect that dot gets very circumspect, even if you are able to figure out that this individual walked by the TV wall when the frozen chicken ad was running, which is hard enough, and then trying to figure out when they actually made it back to the chicken, pick it up and put it in their cart and then made it around to actually purchase it.
Those are some details that are hard to get your finger on conclusively.
So if I’m a CPG brand, and I'm launching a new, I don't know, body lotion in a giant bottle, that's going to be deeper into the store. Is it hard to sell them into screen participation or they understand through explanation and maybe intuitively that this is better than people just stumbling across my product, it's better if I make them aware that this is available?
Mike Hiatt: Yeah, I think especially when you're launching a new product, we've seen a lot of success that way, where you think about that you're investing in the new product line, you're putting it in a Sam's Club and we don't have nearly the number of SKUs that say a Walmart has, but the SKUs that we do have, do very well from a sales velocity standpoint. And so yeah, a lot of them say, “Wow, okay. So I've got a new SKU inside of Sam's Club. It's a new three-pack,” that kind of thing where it's its own SKU. It's nothing that you can't buy this anywhere else really, and so as you walk in, you want to be able to impact them as best as you can.
We do a lot of that where you'll be driving that new product purchase and it's that zero moments where they're in the club, they're in the buying mode, it's not so much immediate as interruptive, and whether you're trying to read something on the internet or watch a TV show or something like that, we're interrupting you with an ad message. There are no interruptions inside of the Sam's Club because you're actually shopping. That's what you are doing. That is the editorial and the editorial and advertising, it's one and the same if you look at it that way.
Susie, is Woven media building all of the ads, or are you building the content that's running in between the advertising and the advertising is coming in from agencies or perhaps from Sam's?
Susie Opare-Abetia: So it's essentially Mike's team that works with the suppliers as well as the internal merchandising teams and marketing to produce that content that's advertising or promotional, and then basically what happens is all of the content gets uploaded to our servers and then Mike's programming team is able to essentially combine the ad content, the commercial content with our third-party content, which is a mix of premium content across multiple categories, like sports entertainment, etc.
So that you end up with this really engaging experience that is skillfully crafted so that it's not just ads all the time. You're basically engaging the member, you're driving TV sales, and you're also promoting Sam’s Club and as we discussed, other products in other departments o in the electronics department.
Did the experience over the last seven years of working on this network reshape some assumptions around what you think people want to see when they're shopping in a Sam's Club versus what they really want to see?
Susie Opare-Abetia: Yeah, so Mike's team actually has done a really good job with some of the studies that they've done to determine what content categories really make sense. For example, we know that, believe it or not, food is a really compelling category and as is obviously sports and movie trailers, video games. So there's definitely been, over the period, more learning about what content captivates which audience and the audience: is it male, is it female, etc.
Mike Hiatt: Yeah, it really is fascinating. The male/female breakdown, where the males spend a lot more time watching the TV wall in particular. But they also represent a much smaller percentage of the actual members, regular shoppers in the club. So you want to take care of both audiences. But it is fascinating to see and then, of course, one group wants to see sports and skiing and all the different fun stuff, and then the female side is more about travel and food like Susie was saying.
Mike, you have an interesting history, so to speak, in terms of in-store media, in that, you had a first go-around working with Walmart on its in-store digital media network, and then went off and did your own thing, I believe, and then now you're back with Walmart but through Sam's.
Is there a clear distinction between the way things were done, let's say 10-15 years ago when you were involved with Walmart, and now?
Mike Hiatt: Oh yeah. When I first got there and inherited the system, we had CRT TV's, like 50 feet up in the air… (Laughter)
This is the old PRN network, right?
Mike Hiatt: Yeah, the old PRN network and we wanted to evolve that, and that was a really fun project for me to get into, and I never had any digital signage experience before that. I had been basically a VP over media direct operations for an ad agency in Salt Lake City and had worked in high tech, like previous to that. But I had some different ideas and some thinking about what we wanted to do and had a good relationship with PRN and we organized a kind of a next-generation network, and we were using satellites at the time. We don't do that anymore.
There's been a lot of fundamental changes that have allowed us to create a better experience and be better at our digital signage experience in the store environment.
So yeah, I don't know what you want me to talk about. I could go in any number of directions. What would you be interested in learning more about?
I’m curious about what you've learned and obviously, it's a lot easier to do now in many respects, and as you say, the sightlines and the display technologies are a lot more visible and compelling than TVs hanging from ceilings.
Mike Hiatt: One of the best things that I've found, and what I learned in my Walmart experience, which was really reassuring to me in this space, is that when done correctly, digital display or retail media actually works, it actually drives purchase. It actually makes the promise hole of what we always try to do in the advertising space, which is influence the purchase, and again, it has to be done correctly, and we were doing that with those endcap screens that we had in the club or in the store on the endcaps, and we definitively over and over again with an early solid methodology were able to show incremental sales lift from those positions and the better the content experience, the more proactive the content was, it was a definite art to design the content that would run on those screens.
But as we got better and better at that, we saw tremendous gains over our control claw, our controls stores for that product. That's the really encouraging thing is that when done correctly, it absolutely works and if you can get the media source very close to the product. A huge piece of that is making sure that something is working and it's not trying to do too much, so many digital signage deployments are trying to do too much and it makes it too chaotic and you just need to be focused and simple.
So we learned a lot of things doing that whole process that allowed us to actually create a successful network and we're implementing those things today at Sam's Club and the, but the cool thing is over with the last 14 years, has been that we're finally starting to work better across the silos, if you will, because in a large retail organization, you think about any kind of deployment, like what we were doing at Walmart, you have to transcend operations, merchandising, marketing, and IT, and to get all four of those groups together when they all have different EDPs that they report into can be really difficult, and it's been historically a struggle, not only with my experience at Walmart and Sam's, but I think any big retailer. ‘cause when I went off and did my own thing, I was working with other retailers and they were dealing with similar problems, but it's a lot of that trying to get organized across those silos, it makes it very difficult to actually have a successful implementation a a lot of times.
What compelled you to go work again for a big company as opposed to yourself?
Mike Hiatt: It's funny. I left and did my own thing and was really enjoying it and was traveling the world and doing exciting stuff and working for a variety of retailers and technology companies, and one of those was Walmart, and so I was going back to help them and work on them, like beyond what I had done when I was there full time, and then also part of that was Sam's Club, which they wanted to redesign their network, and so I got involved in that, and then part of that was better understanding monetization and how we wanted to sell, and so we had a sales team handling the in club stuff and a different sales team handling the online, and so I made the decision, working with my people at Sam's Club, we decided we wanted to combine those two, and so by doing that, and then we reworked the technology side and that's when we brought Woven media in and they weren't selling, they weren't a sales facing organization with suppliers.
And Triad was and Triad was handling the online piece, let's have them handle the in-store piece or the in-club piece, and that started to work really well. I went off to do other things as a consultant and at the time, Roger Berdusco, who was our CEO at Triad reached out to me and convinced me to close my business and come work for him full time. So that's what I did, and yeah, came over and worked for Triad and basically running all the in-club or in-store and retail media-related stuff, while 90% of the rest of the company was focused on the online world, and we did that for several years and then, of course, one thing led to another and Triad ended up being bought by Sam's Club and they brought us all over, and so we were part of WPP and because it’s a long story, I won't get into all the private equity firms and the details associated with that. But at the time that we were, WPP and Sam's Club decided they wanted to bring it in-house, but they didn't want to try to build it from scratch.
They wanted to leverage our expertise, our people and our technology stack, and so we figured out how to put that package set up together and we moved over to Sam's, and so I’m back at the mothership, so to speak.
Yeah, so you just woke up one day and realized, “Oh, I'm here again?” (Laughter)
Mike Hiatt: Yes.
Susie Opare-Abetia: Thank you! (Laughter)
So Susie and Mike, what are people going to see over the next year or so at Sam's Club that's going to be added to the network?
Susie Opare-Abetia: Basically if you walk into Sam's club, and I said there are 55 deployed already, but basically over the next couple of years, we're rolling these new channels out across the chain. So we're doing 270 this year, and then next year we're going to finish out the rest. So if you go into Sam's Club, you'll see the cafe area, on both walls of the cafe, you’ll see three 75-inch screens, three of them facing the club and three of them facing into the cafe area, and those a mix of menu boards, as well as sizzle, big wide freezies, and hot dogs and what not to attract people into the cafe.
So a really nice mix of programming, synchronized in some cases across those three screens, and that's essentially replacing the paper signs that you see today in the club. So you'll see those in cafes. You'll also see, as Mike mentioned, the flow graphics projection in the scan and go aisle, and you'll see 75-inch screens in the member services areas. So this is where members go and find out more about travel services or financial services, or, do stuff with the membership, and that already is shown to have really moved the needle in terms of the member experience, the ratings. The screens are driving the ratings of that experience which is great.
And then you'll see, in some small number of clubs, you'll see the racetrack projectors that Mike mentioned in the aisle. Sam’s Club is still testing those and figuring out when they want to roll those out.
All right. This was super interesting. I appreciate you guys spending some time with me.
Susie Opare-Abetia: Thank you, Dave, this has been great.
Mike Hiatt: Yeah, this has been a lot of fun.