The marketing notion of “you pay for what you see” is reaching its next level with the advent of digital signages that are gaining rapid acceptance across the BFSI, retail, automotive, FMCG, and e-commerce industries. Enterprises from these sectors are capitalizing on the fact that the purchasing intent of shoppers is mostly influenced on the spot by the graphic representation of products that they desire. According to our new report on the digital signage market, the usage of digital signage solutions at places like stores, hypermarkets, showrooms, and shopping arenas has the potential to boost retail sales by up to 43% as compared with other forms of outdoor advertising. However, it is a well-known fact that any apparent prospects of growth don’t necessarily translate into favorable procurement scenarios for buyers. An unbiased probe into the current digital signage market unravels factors, which apart from driving market growth, will play a significant role in boosting costs associated with the sourcing and procurement of digital signage solutions.
This report on the digital signage market helps buyers understand the impact of price dynamism on the overall procurement process. Additional information includes an analysis of the key risk management strategies, highlights of the digital signage market leaders, category growth potential, cost drivers, and much more.
This report will help market leaders understand the impact of price dynamism on the overall procurement process. Additional information includes an analysis of the key risk management strategies, highlights of the commercial printing companies, category growth potential, cost drivers, and much more.
This blog on the digital signage market highlights some of the disruptive factors and offers actionable insights into strategies for the effective procurement of digital signage solutions.
Implementation of advanced technologies such as AI
There is no doubting the fact that AI is the next big thing in the digital signage market. The very idea of eliciting better engagement from shoppers and to offer them a more personalized experience fuels the induction of AI. However, executing this cause comes with a cost. Implementing AI is one of the major cost components for suppliers in the digital signage market. The stark shortage of professionals with expertise in these technologies is further adding to the cost quotient of implementing this technology. The intensifying competition in the market is also compelling all the companies operating in the digital signage market to make strides in terms of technology and gain a competitive edge over their counterparts. In the years to come, AI will become indispensable and continue to make significant additions to the supplier’s OPEX. Invariably, suppliers will compensate for this recurring expenditure by increasing the purchasing price of digital signages.
Increasing expenditure on energy
The functioning of digital signage boards entails huge energy consumption. Large displays consume high energy as compared with small displays; however, small displays do not provide the necessary information to customers as they have space constraints. In addition, increasing costs of utilities are further disrupting the procurement scenario in the digital signage market.
Suppliers incurring heavy compliance costs
The manufacturing process of digital signboards involves the usage of CFCs, carbon tetrachloride, and methyl chloroform. With the environmental watchdogs tightening their scrutiny over the usage of these materials, suppliers are compelled to use organic solvents such as ketones and alcohol. This translates into further addition to the suppliers’ OPEX in the form of increasing compliance costs.
SpendEdge specializes in offering custom market information to procurement leaders who are looking to expand their market share. For over 15 years, we have carved a niche for ourselves when it comes to helping companies streamline their procurement process and develop better supplier selection metrices.
Smart Procurement in the Digital Signage Market
Despite the presence of numerous challenges, procurement specialists at SpendEdge argue that such challenges are the by-products of the market growth and do not necessarily have to be the reason to restrict cost-effective procurement of digital signages. This is evident in the substantial spend growth of the digital signage market, which is now expected to touch a value of more than USD 7 billion by 2023. In a recent procurement intelligence report on the digital signage market, experts have enlisted a set of procurement best practices that address some of the prominent challenges faced during procurement of digital signage solutions. Some of the procurement best practices that are highlighted in this report are enlisted as below:
- In view of the disruptive factors stated above that are affecting the digital signage market, it is recommended that buyers engage with suppliers that are adopting energy reduction programs in their manufacturing facilities to reduce their energy requirement and optimize their OPEX.
- Buyers should look for suppliers that can provide insurance for all the equipment or displays installed across multiple locations. This can ensure monetary coverage in case of damage to the display or other equipment, which can arise because of accidents, calamities, or other factors