Introduction

New digital technologies have dramatically changed the way firms communicate and interact with consumers (Pizzi & Scarpi, 2020). Historically, retailing has continuously been advancing in step with technology since retailers use new technologies to attract and build relationships with consumers in order to increase profitability. Nowadays consumers are being exposed to a variety of advertising messages in a plethora of different ways; with one of the newest emerging types being “smart signage”. Smart signage functions as a multichannel type of media in marketing communication strategy, with unlimited marketing contents and promotions providing a seamless flow of experience. Over 85% of retailers consider customer-facing technologies, for example, smart signs, as an effective communication tool for achieving customer satisfaction and new revenue streams (Van Ittersum et al., 2013). Thus, retailers adopting smart signage are not only providing valuable information to consumers, but also interacting with them to solve their problems, build a rapport, and increase engagement. Adding support to this course of action, the global market size of digital advertisements is expected to grow from USD 19.61 billion in 2016 to USD 32.84 billion by 2023 (Cho, 2019).

The traditional view of “signage” is as a one-way message display designed to reach large audiences, and as a key touchpoint along the consumer decision-making journey. An example of traditional signage could be a static poster, such as those you might see at the entrance to a Walmart store. However, the emergence of new technologies has elevated the impact of signage to a new level: Now, smart signage is considered a more engaging and successful marketing tool. This is because smart signs support two-way communication and the dynamic display of animations that are hard to escape, capture attention, and are available to consumers to interact with. Imagine a retail store that uses smart mirrors or smart fitting rooms, creating unique and customized shopping assistance using algorithms, app tracking, and delivering personalized content (e.g. promotions, complementary items, and events).

“Smart signage” is defined as “media for which existing digital signage is given upgraded information technologies such as thinner and clearer liquid crystal displays, iris recognition technologies, augmented reality (AR), and/or object recognition, with multiple devices capable of being controlled remotely. Networking has enabled two-way or interactive content and services” (Kim & Lee, 2015, p. 2911). Smart signage moves beyond mere “digital signage” as it combines digital displays with Artificial Intelligence (AI) processes and the use of Internet of Things (IoT) consumer data. Using the same example of Walmart, smart signage might be the loop display of seasonal products at the store entrance showing a variety of deals, new products, and specials on a screen that is based on consumer data. In this same situation, patrons use voice commands or buttons to interact with the smart sign to ask questions about new products, look for suggestions, and make comparisons.

This chapter aims to understand the role of smart signage in creating consumer-product relationships. We present a conceptual framework that interprets the strength of smart signage in developing consumer-product relationships through its ability to offer two-way communication in a retail context. The proposed framework offers some insight into the role of human-computer interaction, with a specific focus on the effects of psychological distance and privacy concerns. We foresee a fruitful avenue for research in the domain of smart signage and propose several implications for retail marketing, consumer wellbeing, and shopping experiences.

Smart Signage: Importance to Retail and Potential Outcomes

Signage is a visual display of messages designed to reach a large audience and is typically associated with being a significant consumer touchpoint and an integral part of the customer decision-making journey (O’Neill, 1991). The design characteristics of signs play an important role in how consumers perceive the content displayed which further impacts consumer attitudes and behaviors (Kellaris & Machleit, 2016). Smart retail tools, for example, AI, the IoT, sentiment analysis of social media posts, the crawling of consumer product evaluations, and Search Engine Optimization (SEO) software, are all capable of obtaining vast amounts of consumer data. As such, not only can advertising messages be made more frequent, but also more personal and interactive. With the enhanced digitalization of retail during the last decade, the role of smart signage in retailing is becoming even more relevant. In fact, given the introduction of this technology, retail stores have observed a 24% increase in customer traffic after implementing smart signs, with 76% of consumers saying they decide to enter a store for the first time simply because a smart sign appeals to them and 67% of customers saying they buy products based on smart sign visuals (Banerjee, 2022).

Examples of the breadth of the capabilities of digital signage range between interactive screens at bus stops, high-resolution billboards, and animated GIFS and more sophisticated interactive devices such as smart mirrors, smart carts, electronic shelf labels, and smart fitting rooms. All these contemporary technologies have transformed traditional signage in a manner that now includes machine intelligence features and artificial intelligence algorithms, thus rendering them “smart”. Smart signs have been developed in order to be more responsive to their surrounding situations. For example, OptiSigns is a software program that can easily transform a TV into a smart sign by creating content using data from Google, a weather app, Instagram, and Twitter. Furthermore, Morgan Stanley uses real-time big data to present data directly to Times Square signs.

Many retailers are beginning to rely more on smart signage, as opposed to purely online means of advertising. The crucial role of signage in this respect—for commuters whether they be on a train, at a bus stop, at a mall, or in their cars—is engaging with and capturing the attention of consumers by customizing ad messages for particular contexts and trends. As such, smart signage has been gaining increasing levels of academic and practitioner attention in respect of consumer-product relationships. Although previous research on smart signage provides some consensus on the effectiveness of this medium as an additional touchpoint for reaching consumers and collecting information from them, there is still a lack of consensus on the conceptualization of smart signage and which boundary conditions may coexist when consumers interact with smart signs.

In addition to the positive and negative consequences of the emergence of smart signage technologies, marketing researchers and practitioners need a more comprehensive framework in order to reflect on the potential efficacy of smart signs in several marketing settings, for example, smart cities, smart retail, store aesthetics and placemaking, and branding strategies. As such, calls for a comprehensive theoretical model encapsulating not only the advancements of smart signage, but also its limitations, are becoming even more significant, making this model even more timely.

Proposed Model

Despite smart signage becoming a fundamental customer engagement tool, there is no conceptual model to date that interprets the impact of smart signage in shaping retail’s consumer-product relationships through advances in technology. The importance of re-evaluating the role of smart signage, and its contemporary consequences, within a conceptual model has gained relevance as debates have emerged on the drawbacks of such emerging technologies and their uses (Banerjee, 2022; Liu-Thompkins et al., 2022; Schweidel et al., 2022). As such, the conceptual model seen in Fig. 3.1 provides some direction for the considerations of researchers and retail managers when (1) pondering the role of smart signage in consumer-product relationships, alongside (2) positive and negative factors regarding the success of smart signage. There is some discussion of the development of the conceptual framework below, addressed in the following order: (1) two-way communication design, (2) inherent smart signage design characteristics, (3) psychological distance, (4) privacy concerns, (5) consumer-product relationships.

Fig. 3.1
A chart presents a conceptual model that explains how smart signage design characteristics drive stronger consumer-product relationships through reduced psychological distance while also raising concerns about consumer privacy.

Conceptual model

Full size image

Two-Way Communication Design

Fundamentally underpinning this framework is the two-way relationship between smart signage and consumer. In a smart-service environment, smart digital signage combines the IoT, AI features, data-driven communications, image sensor communications, and smartphone applications in order to provide marketers with meaningful insights and interact more effectively with consumers to persuade them using novel appeal. Two-way synchronized communication is more engaging than one-way unsynchronized communication (Liu & Shrum, 2002). Something that is applicable to engaging environments is a sense of greater confidence, which creates a positive chain of effects due to consumers feeling satisfaction, showing greater involvement, and becoming active message creators (Liu & Shrum, 2002). Furthermore, when comparing one-way with two-way communication, only the latter enhances brand attitudes and purchase intentions (Colliander et al., 2015).

It is expected that retailers using interactive advertising can develop the potential to promote trust among consumers by means of a trustworthy exchange of information, technical assistance, and reducing information asymmetry (Roberts & Ko, 2001). Imagine entering the grocery store and a face recognition sensor identifying you as a regular customer. Then, a smart sign uses your recent purchase history to showcase, on the screen, an ad featuring your favorite sport drink. As a customer, you can decide to either scan a QR code, use a discount code, decline the offer, or watch the next ad. In the background, machine learning algorithms are recording your choices. Thus, the main characteristic (i.e. creating two-way communication between the customer and the device) of smart signs can improve both the shopping experience and customer value.

The above-mentioned example could interestingly be cataloged as the most basic type of two-way communication between a smart sign and a consumer, with the customer responding to the ad by either accepting the offer or rejecting it. Since smart signs have the capability of showcasing sensory affective ads that can generate a closer psychological distance to the shopper, we can expect an improvement in impulse buying and a boost in intentions to revisit. Thus, at the other end of the spectrum (e.g. highly interactive smart signs), the possibility of developing stronger consumer-product relations is very high. Returning to the grocery store example, imagine that the smart sign accepts voice commands so that consumers may now ask questions about a sport drink or provide information relating to their flavor preferences. Then, the smart sign might not just be capable of showing a QR code to use as a discount code, but also to adapt it to consumer preferences.

Smart Signage Design Characteristics

The proposed model also highlights the baseline importance of the ultimate design characteristics of smart signage. As per the longstanding Technology Acceptance Model (TAM; Davis, 1989), the ease of use and usefulness of a technology is paramount to its overall adoption. Smart signage is a new, developing, and publicly used technology requiring that various consumers, with a range of previous technology experience, are able to use it effectively. Furthermore, due to its public nature, consumers become more conscious of its usability as they do not want to be seen as incompetent when using the technology. Recent research has addressed the need for a universal design. As such, the framework proposes that smart signage not only must allow two-way communication, but must also do so in a universally recognized way. Anthropomorphic features and ad appeals, which include human-like cues, have been widely used by marketers to universally generate brand attachment and persuasion. Also, anthropomorphism seems to work properly when the shopping context (i.e. interacting with new technologies) is salient with uncertainty during the consumption process (Velasco et al., 2021).

According to Tucker (2019), five of six forces shaping consumer decision-making in the years to come will include technological aspects, these being: (1) millennials’ media consumption, (2) the IoT industrial revolution 4.0, (3) the planning of the business logistics necessary to adapt to consumer convenience time-wise, (4) AI implementation and product automation, and (5) social distrust on social media platforms. Because retail technologies are ubiquitous and have become a major factor in consumer decision-making processes, it can certainly become a driver of growth as regards smart signage as it has the capacity to enrich the consumer shopping experience through meaningful interactions. Examples here include; the use of augmented reality to display images and sounds on public signage in accordance with audience movements, the availability of interactive smart signs enabling audiences to interact with touchless technology, the use of smartphones to interact with signs, the adoption of machine-learning on signs’ interactive displays, and the inclusion of embedded-camera technology and facial recognition on digital signs. Such technological attributes evoke differences in conscious and unconscious cognitive processes, resulting in differences in consumer responses to signage characteristics (see Kellaris & Machleit, 2016).

In order for smart signs to produce consumer-product relationships, certain technologies (e.g., AI, machine learning, and augmented reality) must work together to evoke a closer psychological distance. First, mobile apps need to be installed on customer smartphones, which can be used inside or outside the store. The main characteristics of these apps include a virtual agent, a store map, and in-store notifications, which are enabled by beacons and which facilitate three-dimensional virtual content enabling users to reproduce their reality. Second, smart signs need to interact with intelligent shelving technologies. Radio Frequency Identification (RFID) sensors attached to individual products will inform consumers about product availability and enable the anticipation of inventory numbers. Third, smart shopping carts can interact directly, and in real-time, with consumers by informing them about complementary products they might need based on their current purchases. Consequently, shoppers will save time and be able to feel confident they have done all the shopping they needed to do. Lastly, we foresee the use of smart mirror technologies that can be integrated into customer data in order for them to graphically simulate the wearing of a particular product, or sensors may detect, using algorithms, upcoming events, the weather, and the season in order to suggest new products.

Psychological Distance

It appears that shoppers are more interested in, and more persuaded by smart signage which shows seasonal ads, promotional information, and new product messages, and which advertises hedonic products (Burke, 2009). Moreover, the dynamic presentation format that smart signage uses is tied to stronger consumer preferences regarding the products being advertised based on the continuous interchange of the relevant information with the consumers. Accordingly, this technology can develop a close psychological distance between advertisement content and consumer, due to the sensorially rich environment smart signage encompasses and due to the way in which smart signage fosters mental involvement.

Psychological distance is “the subjective experience that something is close or far away from the self, here, and now” (Trope & Liberman, 2010, p. 440) and has been found to significantly affect consumer interactions with various technologies. High levels of psychological distance (i.e. consumers perceiving smart signage to be far removed from them due to not being relatable or not fulfilling their requirements) negatively affect consumer willingness to engage with technology as the difference between humans and technology is considered too great. However, low levels of psychological distance (i.e. when consumers are able to interact with technology that include communally expressive roles due to it being representative of them and their needs) have been found to have a strong positive effect on consumer use of smart signage. Due to the nature of AI, and the differing consumer attitudes and behaviors toward it across different technologies, it is important to establish the effect of psychological distance on smart signage.

Privacy Concerns

Perceived privacy concerns have long been considered to negatively affect consumer decision-making using technology, with some instances of the presence of privacy paradoxes (i.e. a cost-benefit analysis). As smart signage incorporates AI technology, and is capable of becoming more personalized and responsive, consumers are aware of the risk of personal data being collected and then used by technology. Although AI brings great benefit to consumers and marketers, it can also give rise to fears about generating economic and social inequality and the accompanying societal harm (Letheren et al., 2020). It is therefore important to assess the extent to which privacy concerns affect consumer perceptions of smart signage in order to provide guidance for its further development. Retailers can approach this situation by being transparent with their clients about the information being collected and about how this is used to enhance the customer experience. Adding to this, retailers could also reinforce the creation of an organizational culture that encourages employees to safeguard consumers’ personal information through strict policies on the use, interpretation, and communication of the available data. In a supplementary way, retailers must use data protection software to store consumer data.

Consumer-Product Relationships

Consumer-product relationships are of particular interest to this framework because they not only assume that smart signage will be engaged with, but that it will also have a significantly positive effect on consumer interactions with the product being advertised on it.

What makes smart signage unique is its capability of deepening consumer relationships by providing a more interactive experience. Consumer experience is a fundamental element of securing a positive and lasting impression. Despite the literature having long examined the effects of the colors, typefaces and background design elements of signage on enhancing lasting impressions, research has also found that consumers need more than mere visual stimulation in order for an experience to be memorable. Interactivity is a fundamental way in which technology enhances many service and product relationships. A consumer-product relationship is described as the emotional attachment to brands and products that consumers perceive themselves to have. Depending on the strength of the emotional attachment, consumers feel a self-connection, or not, with the symbolic value of the product.

Being able to interact with products, as opposed to only seeing them, allows consumers to process more strongly their relevance to their lives and thus these products will be processed more emotionally and cognitively. As such, smart signage is capable of strengthening consumer-product relationships by creating two-way communication channels with consumers, in doing so augmenting the potential for the content displayed in the sign to interact effectively with the target audience. When consumers have the opportunity to repetitively interact with the content displayed on the sign, a sense of familiarity and belonging will arise and provoke, within them, the use of a closer perspective in order to interpret the marketing message.

It has been argued that applying software-defined networking (SDN) technology to signage can be useful as regards creating an enhanced product-service relationship because it can handle interactivity by controlling physical devices, the transmission of data between these, and data acquisition. As such, smart signage can be a promising development that is progressing toward the interactive world, connecting users to the IoT network using device-to-device communication technology. For example, digital signage and a smartphone camera can operate as a transmitter and receiver, respectively. It has also been found that sensor motion scheduling, based on customer location, allowed further customization of the display content, resulting in higher levels of customer enjoyment and satisfaction. As such, these two-way communication and interaction opportunities are considered capable of strengthening customer-product relationships.

Conclusion

This chapter focuses on presenting a conceptual model in order to investigate the potential effectiveness of smart signage, and to acknowledge what the main points of development in this area may bring to retailers. The framework broadens knowledge from the previous literature, as well as furthers knowledge established by Kellaris and Machleit (2016), in placing greater significance on technological features for the formation of relationships between consumers and products. Extending our understanding of the new technologies that shape the customer journey is critical, as it provides retailers with a range of opportunities to personalize messages and enhance consumer-product relationships (Schweidel et al., 2022).

In line with Kellaris and Machleit (2016), this paper seeks to provide a framework for getting from “here” (i.e. the technological features of smart signage) to “there” (i.e. consumer-product relationship enhancements) in smart signage development. This framework not only draws attention to the evolutionary effects of smart signage, it also proposes how these are disseminated across contexts. As such, this research indicates how the role of smart signage is related to smart retailing, store aesthetics and placement, the community economy and branding strategies. Smart signage can contribute to these areas by providing consumer wellbeing via a more personalized and immersive experience for both individuals and the wider community, alongside enhancing brand relationships. When retailers collect, interpret and implement consumer signals in order to manage consumer journeys, a chain of positive effects (e.g., consumer-product relationships, consumer desire for personalization, consumer trust in the firm, and the willingness to disclose information) occurs (Schweidel et al., 2022), providing retailers with competitive advantage (Plangger et al., 2022).

As such, the type of content communicated using these kinds of two-way smart signage mechanisms can vary according to the contextual purpose while still achieving the same desired personalized and engagement effects of consumers/users. However, before any full and successful integration of these smart signs into various settings is achieved, practitioners must be mindful of their barriers and capabilities.

The proposed model stresses that the characteristics of two-way communication and smart signs (e.g., AI technology adapts the sign to the consumer interaction) create a personalized and individual experience. This level of personalization in interactions concerning consumers and smart signs reduces the psychological distance, which is a necessary mechanism for the formation of consumer-product relationships. This chain of effects not only increases the level of personal connection with the smart signage content, it does so using a blend of conscious and unconscious processes (Liu-Thompkins et al., 2022; Schweidel et al., 2022).

However, one negative facet of smart signage relates to the roles of the IoT and AI in causing consumers to have privacy concerns (Schweidel et al., 2022). Edwards (2016) proposes that there are three key features that governments need to consider when discussing regulation of the data flowing from smart cities: (1) Ask for users’ consent prior to using their data, (2) find out how users can gain control of what kind of information is sharable versus what is not, and (3) establish a definition of where data is stored in the cloud and identify who controls this repository of data. This area remains significantly under-examined, from a consumer wellbeing perspective: Further investigations into the overriding of consumer privacy concerns will provide a firmer understanding of the moderating role of privacy in future smart signage development.

Both psychological distance and privacy concerns are considered key variables of the general view that two-way smart signage can impact product-service relationships. The proposed framework suggests that, whereas traditional signage gives rise to higher levels of psychological distance, the two-way communication capabilities of smart signage give rise to lower levels of psychological distance. As such, psychological closeness is considered to positively affect the impact of smart signage on customer-product relationships. However, the framework also acknowledges increased consumer sensitivity and awareness of personal data collection and usage and stresses the significance of the role of privacy concerns in reducing consumer-product relationships. The more privacy concerns consumers have when interacting with smart signage, the lower will be the levels of consumer-product relationships developed by them. Nowadays, consumers feel uneasy about sharing their personal information with retailers. In many cases, this mistrust and reluctance to share information with retailers comes as a result of the lack of transparency arising from customers not having a clear picture of the way their information is being used, interpreted, and communicated. As a consequence, this pattern of reluctance to share data can negatively affect consumer wellbeing.

The proposed model also presents a future research agenda. A continuum of two-way communication between consumers and smart signs is implicit in it. Certain smart signs that produce, or do not produce, continuous interactions may act as a moderator in developing consumer-product relationships. Another important aspect of the proposed model is how it affects the customer journey. Business cases are scarce as regards telling successful or unsuccessful stories of retailers that implement smart signage. We cannot leave the metaverse out of the picture as it also shapes consumer-product relationships. Future studies could focus on examining how smart signs interact with the metaverse, or even within the metaverse, how smart signs work toward producing higher consumer engagement, wayfinding benefits for metaverse users, and in building brand value.