Picture this: an ad on the menu board touting the latest Walt Disney Happy Meal toy suddenly changes while you’re in line waiting to order your Big Mac and french fries. The restaurant just ran out of the first toy and is already touting another one.
Or, higher-priced sandwiches aren’t moving in the afternoon, so an ad pops up on the restaurant’s menu board enticing customers to try the more expensive sandwich.
In the ultra-competitive fast food industry, store managers are beginning to tinker with new technology that could change the way you look at the old, drab menu board you’ve been used to.
It’s called point-of-purchase promotion, the attempt by retailers to grab consumers’ attention at the moment they are making up their mind what to buy and are pulling out their money. New computer technology has everyone from your local post office to your neighborhood McDonald’s restaurant experimenting with it.
At least six McDonald’s franchisees, including one in Chicago, are pilot testing a new digital menu board that can not only run advertising but also change promotions or menu prices at the click of a computer mouse.
The digital menu boards help retailers in their struggle to compete with local rivals by offering eye-catching promotional messages that can be changed almost instantly if necessary.
“We start with the premise that for the most part our audience is very media savvy. The population as a whole knows how to read messages, and things that move draw attention,” said Richard Mandeberg, vice president, director of digital marketing for Siren Technologies, a division of Chicago-based marketing firm Frankel & Co.
“Research shows that dynamic messaging that moves is more impactful to the consumer than a non-moving message.”
Siren is pilot-testing the new technology, called Digital Point-of-Purchase in both U.S. Post Offices and some McDonald’s.
At the heart of the new technology is being able to change the way consumers interact with point-of-purchase promotional materials. Instead of using traditional cardboard cutouts pronouncing 99-cent Big Macs to sell sandwiches, the new digital promotions offer consumers a short, colorful video-like clip to watch while they are waiting at the fast food counter.
“The bottom line is that customers don’t tend to pay attention to the menu board,” said Tony Dillon, general manager of Siren. “With this, we can give you four or five messages in the two or three minutes you’re there.”
But the technology is not cheap. The initial outlay for equipment can cost anywhere from $5,000 to $20,000 per store location.
Then comes the expense of tailoring promotions to the store, as Siren does, which can represent hundreds of dollars per promotion more–roughly the same price as traditional cardboard promotions.
Siren contracts with hardware manufacturers to design specific equipment for individual stores; Siren creates the computer software that makes it work.
If it is successful in the test markets, the technological changes would revolutionize the $30 billion promotional marketing industry, where most point-of-purchase marketing is still done with ads or displays printed on cardboard or paper.
In competitive industries like fast food, more retailers are finding it’s an advantage to be able to change promotions quickly in response to a rival’s activity or other local market conditions. And while one promotion might work for an urban area, a different one might work better in the suburbs.
“Local store marketing is a big advantage today,” said Ron Paul, president of Chicago-based restaurant consultancy Technomic, Inc. “It’s a big plus if retailers can execute it.”
Paul said that in the fast food industry, a third of the people buying food in a restaurant on any given day are not regular customers, which means they tend to spend more time looking at the choices on the menu board than do regular patrons.
“Consumers have told us that they are at the edge of being able to comprehend the menu board,” he said. “They almost can’t make decisions fast enough.”
It’s at that point that retailers hope to try and grab a more profitable transaction by promoting a more profitable sandwich.
Will it work? Paul says it depends on how deftly retailers mix their national marketing and local promotions without confusing the customer.
“One of the questions,” he says, “is how well can you execute it?”
