New in-store digital ads are using the latest technology to target messages to individual buyers, boosting sales and even helping to manage inventory

When you order a morning coffee at a café owned by Israel-based Aroma Espresso Bars, an image of a croissant may suddenly appear on a digital display next to the cash register. Stop by for a sandwich or salad later in the day, and the display could flash a picture of a suggested beverage.

Aroma Espresso says sales of desserts and beverages featured on the screens have increased as much as 68% in outlets where it has installed the display systems, starting about a year ago. The company has about 100 cafés in Israel, the U.S., Canada, and Romania. Besides boosting sales, the system aids inventory control—for example, by encouraging customers to buy Danish sweet rolls when muffins are running low.

Welcome to the future of point-of-sale retailing. In-store digital ad displays have been around for a few years already. But stores and restaurants are now starting to use the technology for real-time promotions, instantly tailoring their sales pitches to match individual customers’

Scanning Shoppers

Some retailers are starting to experiment with even more advanced tools. Merchants can now, for instance, install tiny cameras that scan shoppers’ faces to determine their sex, race, and approximate age, and then flash appropriately targeted ads. YCD Multimedia, an Israeli company that sells digital-display systems, is already integrating such technology in some of its systems and is discreetly testing them in some U.S. retail outlets, though it won’t say where.

In-store digital displays are set to become “the most effective media channel” for advertisers, mirroring the success of targeted online ads, predicts YCD Chief Executive Barry Salzman, a former president of DoubleClick’s global media business.

These new capabilities are attracting not only retailers, but also consumer-goods makers seeking more bang for their marketing buck. Spending on in-store digital ads will grow as much as eightfold over the next four to five years, to $3.5 billion annually in the U.S. and $600 million in Britain, predicts Foluso Laguda, a senior consultant at Frost & Sullivan.

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