The Idea
AI-powered digital signage that automatically changes what it displays to customers based on how they look (demographics, dressing style, body type etc)
Who uses this and who pays for this
Brick and Mortar SMEs who would like to see more revenue from customers. These are further subdivided into two kinds of customers:
- SMEs that are trying to convert footfall into more in-store visits via better signage (gyms, dance studios, hair salons, certain kinds of F&B businesses)
- SMEs that are trying to get more revenue out of users who are certain to come in to the store via better in-store or just out-of-store interventions, specially as people begin to queue up and figure out what to order (F&B, tailors and clothing stores)
How to quantify the value prop for a customer?
"Outdoor" signage solutions to convert footfall into more traffic
- Figure out how many people go to outdoor stores per day
- Out of these, figure out how many make planned vs unplanned visits to stores
- Out of the ones who are open to unplanned visits, figure out how many of them make their decisions by walking around, instead of reviews on Google or other platforms (searching for "restaurants/shops for X near me", instead of "let's just walk around to find an interesting store")
- Out of the ones who are open to simply walking around, figure out how many will be influenced by better signage
- Identify the "lift" you can cause with walk-in rates better digital signage
"Indoor" signage solutions to get more profit from customers that are in store
- Figure out how many people visit stores not knowing what exactly they will buy
- Figure out: a) how many people don't make a purchase in the store because they cannot find what they are looking for, and b) how many people don't buy enough (low average order volume) or buy low margin products because they aren't shown the things that you would like them to see
- Identify the "lift" you can cause for these users with better digital signage
Who are other players in the field that SMEs use?
Many existing players with an established presence in Singapore, predominantly providing digital signage as one of the many things that they do. Some of them already have demographic-based digital signage solutions in research (like this)
Learnings from field research
A lot of SMEs that I spoke to over the weekend have niche POS and ERP players that also provide digital signage options. An example of this is http://www.middlemen.co, which serves a bunch of small clients. Most of the ones I spoke to wanted a ton of customization. Can be a great consulting business if an AI layer is added to it. Difficult for this to be an out-of-the-box product business.
Spoke to 8 SME owners/store-managers over the weekend. Didn't pitch the product, just asked why they were using the signage they were using
- An F&B outlet (King's Banana Leaf Indian Restaurant at Upper Bukit Timah Road)
- Another F&B outlet (Daawat Tandoori at Upper Thomson)
- An organic farm store (Bollywood Veggies at Lim Chu Kang)
- A sex-toys store (U4ria at Somerset)
- A small bar (The Tipsy Cow at Tanjong Katong Road)
- A health supplements store (GNC Live Well at Toa Payoh)
- A book/stationary store (Popular Bookstore at Toa Payoh)
- A furniture+electronics store (Courts at Toa Payoh)
Among these, the F&B outlet was using digital signage prominently (to display the menu above the ordering counter). Courts had some digital signage, but it wasn't prominent. For the rest, a key concern was that digital signage will take up space when they are already constrained for space in the store. Outdoor digital signage would not have this problem, but most were skeptical about its efficacy. For attracting customers, the #1 thing they were all doing is SEO for Google Maps and hyperlocal ads on Facebook
For all of these stores, the plan to visit the store is generally "pre-planned". I.e., people typically search what stores are around on Google Maps, and then visit them. The only exception was Popular, where people often come just to browse items because they were supposed to be meeting someone who is late (clothing stores could be a similar example)
What are the key business dynamics in the field?
Spoke to Hitesh of Silverman Ventures, who is currently doing due-diligence for acquiring a digital signage business. 3 things to be aware of:
- Brutally competitive market with fairly low margins. Government subsidies help loosen pursestrings, but competition from China means that the differentiation has to be service + customization. Hard to see a pure product approach work in Singapore. Can be a great lifestyle business with ~$300-400k or so in annual profits and $2-$3M in annual revenue. Hard to scale beyond that
- What sells is the ability to grab customers' attention. Right now, customers' attention is online. Not in store. SPHMBO has been trying hard to do more with outdoor ad-tech, but hasn't had much success so far
- Analytics solutions are already widely available (Nielsen etc). Doesn't matter if they are correct or not, they're already well accepted by the industry. For example, consider this bit from an SPH press release: According to Nielsen Media Index, 50% of the traffic in Raffles Place are PMEBs versus the national average of 32%. Raffles Place also attracts a higher proportion of high-income earners with an average monthly household income of $7,000 and above (53% versus 38% national average). https://www.mumbrella.asia/2019/06/sph-outdoor-ad-firm-to-erect-led-screen-at-one-raffles-places Getting these insights at a "store" level instead of an overall location level will help. But it won't be a game changer.
Why would this be a good idea?
- Edge-ML is an emerging usecase with strong tailwinds. With effective branding and communication ("recommendations for the offline world powered by Edge-ML"), this could be a good strategic acquisition for large outdoor advertising companies or for online companies looking to pivot into offline advertising
- Deploying cameras in multiple stores and at multiple angles could lead to interesting learnings and interesting data that can open up possibilities beyond digital signage
Why would this not be a good idea?
- Not a hair-on-fire problem for customers. It's a nice to have, but optimizing SEO for Google Maps and using online channels to acquire users is much more urgent
- Difficulty in scaling. Installation, customization, and small iterative changes for each customer will make this a very hard to scale business
- Plenty of competition already exists, and is well known in the industry. Some of this competition is already trying out AI-assisted digital signage
- SMEs are generally happy with what they have. Few structural advantages for them
- Even if this does work, it doesn't unlock a ton of value for customers (leads to marginal yield improvements → not 10x improvements)