Retail Signage Shipments to More Than Double by 2013

The outlook for the global retail signage market has been revised down in 2009 as a result of the ongoing economic downturn that is impacting the entire electronics industry, according to iSuppli Corp.

This means that 2009 will be a stable to negative growth year for the retail sector as these macroeconomic forces continue to affect the bottom line of the retail industry. No surprise then that this will directly impact the digital signage market.

Luckily, this is minor blip on the radar of growth for the retail signage segment as iSuppli forecasts this market will grow to 2.5 million units by 2013, managing a Compound Annual Growth Rate (CAGR) of 26.8 percent up from 758,122 units in 2008.

Revenue wise, iSuppli forecasts this segment will grow to $2.1 billion by 2013, rising at a CAGR of 6 percent from $1.6 billion in 2008.

Stalling Installations
As a result of the global downturn, the economies of Western Europe and Asia also have been hit hard by the recession, which similarly will affect retail signage spending in these regions.

iSuppli has observed that retail signage installations have slowed and sales cycles have lengthened. As a result, actual installations are being pushed out until 2010.

Countering a Weak Economy
Despite this, several compelling market drivers are helping to counter the weak economy and enable the growth of signage in this sector. These include:

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The diminishing effectiveness and rapid decline of mass-media channels such as television and print.
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The demanding and rapidly changing product revisions inside retail outlets.

Television and print no longer have the strength to reach target audiences as they once had. Network television has slowly been eroded by the onslaught of cable and the Internet. Meanwhile, newspapers are closing at an alarming rate or reducing staff because of the reliance of consumers on the Internet to get their information.

This has prompted advertisers to seek new ways of communicating to their target audience groups and maximize their return on investment. In a soft economy, competition is fierce among retail outlets and they are always looking for innovative ways to attract new customers and to increase their margins among various existing clientele—making it a perfect fit for advertisers looking to new ways to promote their products.

But as products change quickly and revisions with new features come fast and furious, maintaining a knowledgeable sales staff is a must. Retail signage offers a way to communicating these changes and revisions electronically, as well as to provide brands with timely and relevant communication about product features and benefits. Furthermore, the advertisers can control, schedule, monitor and change content locally or even remotely.

Because of these reasons, iSuppli believes many retailers will accept the initial costs of migrating to digital signage platforms as the benefits to retail establishments are greater than what they are already using.