How Does Digital Signage Work for Retailers?

With its growing affordability and increasingly advanced capabilities, more small business are turning to digital signage. Used correctly, digital signs and the software for managing them bring advertising and marketing content to life. But how does it actually work? And how do you know if you’re getting the most out of the investment?

It turns out that businesses are struggling to unlock the full potential of digital signs. Data from a consumer survey we conducted shows an overwhelming majority of consumers don’t even recall seeing any digital signage while shopping in the past three months.

And, of the 221 respondents who do recall seeing digital signage during that period, only 28 percent were compelled by the digital signage to make a purchase.

There’s still hope for digital signage, though! Whether you’re looking to implement it for the first time or want to improve an existing system, we’ll explain what’s involved with a comprehensive digital signage system and explore some best practices for getting the most bang for your buck.

Exploring Exactly How Digital Signage Works

Digital signage is exactly what the name implies: signs created from digital elements. These elements can include videos, a continuously changing roster of images and text or any other elements you’d expect to see on a computer monitor or TV.

Examples of digital signage in various settings.


If you’re wondering how this is accomplished, it’s pretty similar to the relationship between a desktop monitor and the computer tower that feeds it zeros and ones.

There are three components at play in a complete digital signage system. These are:

  • Content management system. Also known as a CMS, this is where the content for your digital signage system begins. Upload assets such as images, graphics, videos etc. to your CMS that you want displayed on your signs.
  • Digital signage player. Once assets are uploaded to your CMS, they’re sent across your network and received by your media player. These players typically connect to your network or an individual computer. Vendors often package these with your digital signage software.
  • Digital screen. This is the most obvious component of a digital signage system, but it shouldn’t be overlooked. There are a lot of variables to consider when selecting your screens. Keep in mind price, location, durability, quality and functionality.

Components of a Complete Digital Signage System

These components work in harmony with your wireless network to broadcast, manage and organize imagery across all your visual displays (even across different business locations).

Video-Based Content Drives Most Conversions

Now that we have a basic understanding of how digital signage works, let’s explore some strategies for getting the most out of your system. First of all:

The majority of consumers surveyed found video-based content on digital signage to be the most engaging type of content.

Most Compelling Type of Digital Signage Content

Text-based content and static images are somewhat viable content types, but video clearly reigns supreme for driving consumers to your business.

The beauty of digital signage systems is that you can switch between these content types depending on the subject and purpose of the messaging.

This doesn’t mean you have to employ all options though. It’s important to create a strategy for digital signage, just as you would with any other type of marketing campaign. Create each digital asset with an ideal next action in mind. This can include:

  • Visiting your business
  • Taking advantage of a sale
  • Buying a specific product

You can then monitor which types of signage content are convincing the most customers to take the desired next action.

Sales and Discount Messaging Is Most Effective

Another important factor to consider for your digital signage content strategy is the message each asset will convey. For example, we found that content with messaging about store sales and discounts attracted the most customer engagement and purchases.

Most Compelling Messaging for Digital Signage Content

Advertising sales and discounts is a great way to engage and attract both new and repeat customers to your store. Let’s face it, people like saving money. Sales and discount messaging can also be combined with the other types of content listed above.

The other viable messaging options include highlighting specific products, services, offerings etc., as well as simply advertising your business in general. Regardless of the messaging, digital signage must be clear, direct and specific in its purpose.

When featuring specific products, you obviously want to strategically position them in a way that is the most appealing to a target audience. This requires gathering basic customer data to learn the features they care about most and an understanding of why the product you want to feature will sell.

For general advertising, you still want each advertisement to have a target customer in mind. There’s value in building awareness for your store in a broad sense, but a having a target audience in mind will help you better narrow down the next action you’d like your messaging to achieve.

Where Do You Go From Here?

This information should provide you with a blueprint for setting up and effectively using a digital signage system. But what are the next steps?

  • If you already have a digital signage system in place but want to improve it, consider adjusting your strategy based on the consumer data above. For example it’s definitely time to invest in some video ads for your signs. And, remember to define a purpose and goal for every campaign you launch.
  • If you don’t already have a digital signage system in place, you’ll want to start there. Read through the many user reviews your peers have left on our site to help find the best digital signage system to suit your needs. Consider what equipment you already have (screens, monitors, players, computers) and what equipment you’ll need to launch your system. Vendors will often offer packages containing the necessary hardware for a signage system, but you might be able to piece it together at a lower cost.

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