Are kiosks the future of digital signage?
The digital signage market offers a broad set of solutions delivered through various technology mediums with capabilities focused on transforming consumer patterns. Solutions are often uniquely designed to act as both an information portal and a feedback tool. These features have caused the digital signage market to become one of the fastest growing B2B and B2C marketing and advertising channels. It is estimated that there are over 2 million digital signs in the US, and that number is increasing by approximately 20% per year. — Microsoft
The current uses of digital signage are the usual suspects — information conveyance, advertising and entertainment. The primary market is made up of three segments: hardware, software and services. A secondary market has evolved as a form of networks including electrical interface, connectivity and most recently, analytics. The hardware products come in the form of kiosks, tablets, billboards and various digital displays, and can be found indoor and in the digital-out-of-home (DOOH) category.
The most common applications and usual encounters are within these respective industries: retail, corporate, healthcare, hospitality, government, manufacturing, transportation, entertainment, banking and education.
“The digital signage market is expected to be worth USD 32.84 Billion by 2023, at a CAGR of 7.4% between 2017 and 2023.” — Markets & Markets
The ongoing growth of the digital signage market can be accredited to a consumer macro cycle, adaptive technologies for data and analytics and an active buyer landscape.
Digital signage is a versatile product that supports:
- The challenges of a brick and mortar retail landscape
- The demand for digital promotion of products and services, in lockstep with advancements in technology offerings and rising infrastructure.
- The rise of IoT (Internet of Things) and the demand for advanced products with embedded, digitized information management, that can be accessed (and analyzed) from a remote location.
The product that best represents this market dynamic is the digital kiosk.
“Kiosks held the largest market share of the global digital signage market for products in 2016 and are expected to dominate the market till 2023” — Markets & Markets
Kiosks have been the most prominent medium allowing the flow of digital signage into an ever growing list of industries. Kiosks have been one of the most popular products in the retail space, given their ability to be applied “in-store” and “out-of-store”, ease of access to an abundance of information, and most importantly, being a tool for interactivity. Unlike digital signage products which display information/advertisements for a period of time, kiosks deliver relevant dynamic content.
The retail industry has been under a significant shift from brick and mortar to e-commerce consumption. Physical retail outlets have had to implement adaptive emerging technologies to compete with the edge online retailers have.There have been several methods that have allowed retailers to stay relevant and maintain market share, one being the optimized showroom, where customers are immersed in a shopping experience of interactivity and targeted advertising. The digital kiosk is the frontier technology creating the optimized showroom with high quality data captured through analytics.
The aspect of interactivity has enhanced the customer experience. Multi-touch signs and kiosks offer high impact brand messaging via HD video, animation and 3D-graphics. It’s interactivity has allowed add-on tools via connectivity, thus becoming a platform product for add-on products and services, such as analytics, content management and security.
Anonymous viewer analytics (AVA) technology has allowed users to get the optimal usage out of their signage. Sensor technology for AVA, such as cameras, beacons and wifi analytics have the ability to gather detailed measurements to deliver highly relevant, real-time content. Examples of information gathered — the number of people that viewed specific content, how long they viewed it, in-store walking patterns and demographic statistics. From the analyzed consumer data, content is deployed in service to the overall customer experience.
Apart from its popularity in the retail space, digital signage is filtering into almost every industry. We’re seeing momentum in healthcare, education, hospitality, airports and hotels.
Healthcare (including health & wellness) is likely to account for significant market share in the forecasted period, owing to the rapidly increasing demand for healthcare and fitness digital engagement, the increasing awareness on fitness and the rising demand of user-friendly and self-monitoring devices. In healthcare facilities, doctors are able to interact with patients like never before. Signage and kiosks offer them patient management, staff communication, medical records, facility maps, marketing and entertainment, to name a few. The global digital fitness industry alone is expected to reach an estimated $27.4 billion by 2022 and is forecast to grow at a CAGR of 32.6% from 2017 to 2022 — ReportLinker.
Within education, signage has proven to be a great tool for informing, engaging and protecting students. Educators are able to post announcements, share emergency messaging, display building directories and maps and display menus.
Signage in the hotel industry has gone beyond marketing and advertising, given it’s astonishing customer foot traffic and duration. Signage in resorts & hotels are now being used for event management systems (EMS), video walls, analytics, virtual concierge, facility mapping and in-room assistance.
Airports have used signage and kiosks for marketing, baggage information, facility mapping, flight updates, digital art, mobile communication and gate information display systems (GIDs).
As the digital signage market has become increasingly pervasive, operating software, content management systems and security accompanying the signage have become of corollary importance.
The market for software offerings is expected to grow at the highest rate for the next 5 years. Software licenses need regular updating. In North America alone, the digital signage software market is expected to register a CAGR of 9.1% during the forecast period (2017–2023) — KBV Research.
Content management is widely used and necessary for the increasing software offerings. Analyzing the collected data is crucial for deriving business insights and intelligence for optimal content deployment. Security has become a critical aspect of this market, given the highly personal data that kiosks receive and the public facing nature of the product. Despite the growth of the market and attention it is gaining, it is still a complex and highly fragmented market. 7MA predicts increased M&A activity in this space as platform signage companies acquire firms that offer superior content management solutions, software customization and security in order to a deliver a “full-service” digital signage company.
Recent, relevant transactions in the digital signage space include the following:
- MAY 2018 — Uniguest, Inc. acquisition of ONELAN
- FEB 2018 — AU Optronics Corp. acquisition of ComQi Holdings Limited
- FEB 2018 — Stratacache Inc. acquisition of Scala, Inc.
- JUL 2017 — Bunzl plc (LSE:BNZL) acquisition of Pixel Inspiration Holdings Limited
Authors: Tim Frye — Director, 7 Mile Advisors & Rory Julyan — Associate, 7 Mile Advisors
About 7 Mile Advisors
7 Mile Advisors provides Investment Banking & Advisory Services to the Business Services and Technology Industries globally. 7 Mile Advisors advises on M&A and private capital transactions, and provides market assessments and benchmarking. As a close-knit team with a long history together and a laser focus on our target markets, 7 Mile Advisors helps its clients sell companies, raise capital, grow through acquisitions, and evaluate new markets. For more information, including research on the M&A markets, visit www.7mileadvisors.com.
All securities transactions are executed by 7M Securities, LLC, member. SIPC / FINRA.
