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On the wall beside the front counter at 7:30 in the morning is a TV screen tempting Tim Hortons customers to pick up a breakfast sandwich in addition to the double-double they came in for.
In that sense, the screen is just an electronic version of basic poster advertising. However, a few hours later it can not only automatically start pitching lunch items but has the capability to go all out on Boston Cream doughnuts at 3:52 in the afternoon when it senses inventory is reaching its four-hour expiration.
This new technology is helping to shape an emerging form of marketing called narrowcasting.
The basic premise is that retailers know customers consistently shop on impulse.
Milena Weinert, left, and Richard Hue, right, work in front of the new LCD screen installed at their work at Tim Hortons on King St. W., Toronto (Fernando Morales/The Globe and Mail)
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What digital screens allow companies to do is customize the in-store message and respond in real time for maximum effect, whether to push expiring doughnuts, overstocked snow blowers or umbrellas when it starts to rain outside.
"It's not just about pretty pictures on the screen," said Nick Prigioniero, chief executive officer of EK3 Technologies Inc., a London, Ont.-based company that provides digital signs for Tim Hortons and, more recently, for titan discounter Wal-Mart Canada Corp.
"It's about delivering the right message to consumers at the right time at the right place.
"For the retailer, it means being able to manage communications to consumers so that it can increase sales."
Digital signs have been around for several years, but EK3 is among a small but growing band of technology companies that are leading the way in allowing retailers, gas pump and mall operators to tailor their digital messages to their most pressing business needs.
Tim Hortons hasn't yet tapped into all these customized features. But Wal-Mart Canada, which has screens in about 60 of its nearly 300 outlets - and plans to have them in all its stores by the end of the summer - is enticed by the possibilities, said Mike Dombrow, director of marketing.
"The potential is very exciting," said Mr. Dombrow, who today will address a National Retail Federation's convention in New York about his company's narrowcasting strategy.
Over the holiday season, Wal-Mart Canada launched a series on its screens that showed an animated character named Lisa - the retailer's prototypical shopper - and her husband and three children. Over the next several months, Lisa will appear in similar segments depicting how she deals with family issues, such as preparing dinner after work.
By the spring, Wal-Mart hopes that customers will identify with Lisa - and trust her - so that she can begin to endorse products for the chain.
For now, Wal-Mart is using the technology to try to get shoppers to purchase more products by reminding them, for example, of mouthwashes and shampoos when they're in the clothing aisles, he said.
"The objective is to create an impulsive buying behaviour," Mr. Prigioniero added.
Graeme Spicer, director of retail strategy at consultancy DW + Partners, said industry insiders are closely watching how EK3 fares with its digital signs at Wal-Mart. The sector is looking for a more critical mass to convince more advertisers to sign on to the marketing tool, he said.
"We think, and many advertisers feel, it's a medium with a great deal of upside to it," added Hugh Dow, president of media buyer M2 Universal.
But he said the challenge is how to manage its rapid growth, and introduce some standardization in its pricing for advertisers. "It's a bit of a jungle."
Mr. Prigioniero said that EK3 charges advertisers about one-third of television rates. That translates into $4 per 1,000 viewers for space on Wal-Mart's digital signs, compared with about $12 per 1,000 viewers for television ads, he said.
EK3, started by two graduate engineering students at the University of Western Ontario in 1998, has grown to about 70 employees and is "aggressively" hiring as it finalizes plans to open offices in New York and Britain in the coming months, he said. Its other clients include Home Depot Inc. and Dresser Wayne of Austin, Tex., one of the world's largest gas pump manufacturers.
Testing our impulses
Wal-Mart tested screens in '03:
Sales rose 17.5%, v. the prior 30-day period without screens.
Of those surveyed, 88% said signs sparked interest in products; 72% found them entertaining; 13% said the ads increased interest in a product; 4% attributed a purchase to the ads.
Source: Starch Research
and Muldoon
Meet Lisa
This year, Wal-Mart will run a series of Lisa segments on its digital signs so that shoppers will identify with her. Eventually Lisa could be the pitchwoman for all of Wal-Mart Canada's marketing.
She's a 35- to 44-year-old mom
Has three children under 18-years-old living at home
Owns a pet
Well educated
Usually works outside the home
Demands quality
Likes convenience
Has a hectic life
Has to juggle finances
Marina Strauss
