November 2, 2004

By Jason Deign, News@Cisco

In-store network technology is catching on in the Netherlands - with important consequences for the country's leading department store.

De Bijenkorf, owned by the Royal Vendex group, is now using a Cisco "Store as a Medium" retail system to communicate with customers and help increase its profits, leading the way in the emerging field of in-store digital signage.

The retailer already has an enviable reputation as a trendsetter. As well as providing international premium brands and own brand fashion and cosmetic products, its 12 department stores in Holland offer a range of high-quality home goods, as well as media, sports and travel services.

De Bijenkorf has also broken new ground with the introduction of themed shopping events, a versatile store card and flexible opening hours.

Its latest idea, however, is the installation of 40 in-store television monitors at a newly-built Maastricht department store, on a pilot basis.

Initial use has seen the promotion of wedding list services, an in-store fashion show broadcast, loyalty scheme stimulation and marketing of the store's Internet site and e-commerce channels.

The monitors have also been used to publicize upcoming events such as special promotional evenings, product offers and periods of extended opening hours.

According to Ronald van Zanten, senior consultant in the Internet Business Solutions Group at Cisco in Europe, Middle East and Africa: "Using Store as a Medium helps enable retailers to deliver fast, efficient tailored promotional content to customers, reducing advertising costs and creating new revenue streams."

For Michiel Lingeman, De Bijenkorf's media print manager, the move is as significant as the arrival of the World Wide Web.

"Introducing in-store television is a move towards the store of the future. It can be compared to the Internet 15 years ago, when not many people were exploiting it for commercial use. One of the really attractive features is the ability to develop our own content and programming.

"This means that we can produce content that is very specific to our needs and can be immediately tailored to reflect exactly our central and local marketing priorities.

"In fact, the ability to tailor content to reflect in-store initiatives, trends and promotions is central to the screens' success."

The De Bijenkorf pilot follows a project to introduce video into the stores of its sister company within the Royal Vendex group, V&D (Vroom & Dreesman), a department store with mass-market emphasis.

Both projects are being managed by an information technology specialist called Vendex using technology from Cisco, which is well positioned to help through its thought leadership in digital video services and its ability to deliver Intelligent Store technology offerings.

Using Cisco video technologies, retailers can now schedule, broadcast and change such things as on-screen advertising and customer service messaging, from one centralized location.

Wim Van Der Bijl, program manager for Vendex KBB Retail Network, says: "We had already developed a video solution for V&D using content delivery networking from Cisco so there was no need to develop a new technical blueprint.

"We originally chose the Cisco solution because it was proven technology with the scalability and reliability to distribute video content across our existing network without degrading that network's performance in any way."

Vendex has a Cisco-based IP network throughout the Netherlands, interconnecting the 70 V&D department stores and 12 De Bijenkorf department stores with headquarters buildings, central offices, distribution depots and so on.

The network carries not only messaging traffic but also business-critical financial and supply chain applications.

Adding in-store video content to this could, in theory, have knock-on effects on core business applications. A 30-minute clip could easily require one gigabyte of information to be passed to each store location.

However, the Cisco technology uses sophisticated caching techniques to pull content from a central server and economically deliver it to servers at network nodes or for local storage.

In the V&D case, content is distributed every night and stored digitally on a server in every department store. In the De Bijenkorf Maastricht pilot, it is normally sent once every week or two but as screens roll out to other stores video files will be sent overnight, too.

The in-store playback systems can be sent play lists which determine what content is broadcast and when. This allows De Bijenkorf to target specific customers at the time of day and within the areas of the store they are most likely to visit.

Meanwhile, a satellite receiver provides live video streams from music channels that are fed to screens in youth-oriented parts of the store.

Michiel Lingeman says: "By introducing in-store television into the stores we are harnessing the power of the video medium.

"In-store screens will ultimately become a far more effective marketing tool than static print media. They're far more flexible because you can change the messaging and keep it fresh and always accurate.

"The plan is to change the content much more frequently once we've established the right mix. In the long run this investment is not only going to project a better image for the company but is also going to be extremely profitable."

Chris Huggett, senior director, Enterprise Verticals, Cisco Systems Europe, Middle East and Africa, adds: "Consumer behavior demonstrates that 75 percent of all purchases are made at the point of purchase, meaning that effective brand communications here are critical.

"Giving retailers the ability to drive interactive, branded content to multiple television screens, using a single converged IP network, even in remote stores, is a breakthrough in driving customer behavior from browsing to buying."

Jason Deign is a freelance journalist located in Barcelona, Spain.