Digital Signage Creates Volatile Pricing for Consumer Products
If you've walked into a store anytime in the last few years, you've probably
noticed that monitors have taken the place of old fashioned signs. In the past,
signs at fast food restaurants and gas stations had to be changed by hand, which
meant that at most the prices would change on a daily basis. Now, digital
signage and networked systems make it possible to have prices change while
you're standing in line or even after you've started the purchase process.
"I thought I was losing my mind," said an ice cream store customer who did not want to be identified. "I was getting some frozen custard and the total price went up by fifty cents before I got to the end of the line. The ice cream, fruit, and even the drink price updated while I was standing there." The customer was able to negotiate a discount, but is now wary of any store with digital signs.
On the retail side, owners talk about the need for quick price adjustments. According to Zack Hofsteader, a seafood shop owner, "everything that comes into my store arrives on a truck, and needs fuel to catch, process, and deliver. The price of all those things has gone up by a wide margin. I can get a computer to update my pricing so I can squeak by, but changing pricing all over the place is a huge hassle. Digital signs make it possible to post prices, and by the same token I can lower prices just as easily. It's a huge savings." He added that the animated features on the sign often call attention to sale items and catches of the day, so he is able to turn over inventory more quickly.
At the time of this writing gas price increases have created an ordering frenzy for digital signage and software. As many big corporations know, there is a productivity and safety component involved in making alterations to signs, which are usually located in high places or outdoors. Changing a sign in the winter, or during a rainstorm using a big aluminum pole, creates a certain level of liability. Therefore, the high initial setup cost of a digital sign is quickly paid back by efficiencies in labor, less lost time, and (the big secret) adjustable pricing.
New pricing and digital signage software algorithms make it possible for gas stations to measure competition pricing, demand, and even daily traffic to create a customized price for each location. This has been done for years "the hard way" but now digital signs (whether they are screens or LEDs) can make instant adjustments based on input from a computer thousands of miles away.
Inventory tracking is also finding its way to the sign in the restaurant lobby. If a fast food retailer knows that it has a large amount of expiring stock on hand, it quickly creates a new "special" or dollar menu item. Conversely, limited stock drives different specials or even cases where the item disappears from the menu altogether. During recent tomato and jalapeno scares, some items seamlessly vanished from the digital menu boards, while the old fashioned menu boards had to be changed manually, or in some cases with unsightly tape.
One of the other reasons for digital sign based pricing is contingency. A well known example is the national debt clock, which had to be updated with an extra digit. Fearing Zimbabwe style inflation in global markets where signs are sold, some businesses have built in programming that allows for extra space into the billions of dollars, even though the likelihood of such inflation in the US is low. Gas stations like digital signs because it is possible to have unlimited pricing per gallon (whether anyone would pay more than 10 dollars for a gallon is up for debate) since some retail giants remember the fiasco in 1979 where they had to replace pumps that did not count above one dollar, and a similar case in 2002 where the one dollar field had to be expanded for the number 2. Given the high expense involved in altering signage, the digital sign has become a way to make sure that pricing always matches up with daily item costs.
Notes and Special Information
Special note: some software is sold on proprietary equipment. Always make sure you check specifications so you know the full price of the software and hardware necessary for the products.