Henrik Andersson, Instorescreen

The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT

Retail experts have long spoke about the so-called zero moment of truth - that time in bricks and mortar stores when shoppers are in the aisles and making the decision about which product they're going to pull off the shelf and put in their basket.

Getting digital signage into stores, with screens doing messaging when people are in a shopping mindset, has always been a big business driver. But putting screens right in the aisles has been a challenge for a few reasons - the main one being how conventional screens would eat up shelf space.

Display manufacturing has advanced to a level now that it's possible to put strips of high resolution LCDs right on the shelf edge without getting in the way - introducing color, motion and the possibility for things like dynamic pricing.

But the solution is not just the display. There has to be a whole system behind it, and that's where Instorescreen comes in. The Hong Kong-based company has a solution that actually meets the scaled needs of retailers and brands, so that you can do things like drive as many as 96 ribbon displays - with different content to each - off a single Lenovo PC.

I had a good chat with Henrik Andersson, the CEO of Instorescreen.

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TRANSCRIPT

Henrik, Thank you for joining me. We've spoken a few times in the past, but for those who are not familiar with Instorescreen, can you run through what your company does? What are you all about? 

Henrik Andersson: Yeah, So Instorescreen is a manufacturer of hardware, mostly monitors and technology for digital signage. We are 20 years old and today, an exclusive partner of Lenovo. 

It's a curious set up in that you're based in Florida, but you're Danish, I believe, and a lot of the company is over in Hong Kong, is that right? 

Henrik Andersson: Yeah. So our headquarters is in Hong Kong, and I'm very close to Danish. I'm Swedish...

Ah okay, you're Nordic. 

Henrik Andersson: Yeah. So our headquarters is in Hong Kong. We have three manufacturing sites in China and yeah, that's what we are doing today. 

And is it privately held or are you publicly traded? 

Henrik Andersson: We are privately owned. 

One of the things that has struck me about what you do versu and what's historically happened in retail digital signage is, I would say the different waves of signage and retail have involved putting conventional flat panel displays all over stores, which was then followed by doing video walls instead hiving them all together, and the third wave seems to be now that the technology is there to try to put displays right in the aisles, right where consumers are making decisions, as opposed to just being part of the overall look and feel of a store.

Is that kind of why you went on it the way you did? 

Henrik Andersson: Yeah. So the story is that Instorescreen is created to be a supplier that works outside in, instead of inside out. If I explain that very quickly, we come from true OEM manufacturing and we have been listening to the customer to see how we can make the right product for the customer in the right location? That has been the key. 

Inside out is more like if the customer calls in and you show them what you have, and we didn't want to work that way. So what we have done is that we have created different solutions that are OEM based, but we have based them on a whole, like retail. So for retail, we have been looking to see how we can replace or how we can add screens and technology into the retail environment. Based on that, we created shelf edge displays. We worked through the biggest manufacturer of LCD screens, and we have been working very closely with them to create the right size, length and height.

When that's finished, we have a solution that could be on the shelf edge. It can be on the header and so on. The second step here is how are we going to drive them? What is the most intelligent way to drive them? And that's where it comes in with our solution, where we call it inDAISY, it's a data chain technology where we can utilize one 4K computer running up to 96 screens. Second generation that's coming next year, we'll also be able to push power through to the DAISY chain. So we will be able to push both power and data through one single cable. 

This is the partnership with Lenovo, and with the DAISY chaining, is it one signal to as many as 96 displays, or could it be addressable, like it could be 96 different signals?

Henrik Andersson: It’s 96 different signals. So each screen will get an ID, and based on that ID, you can have different content, so each screen would have different content. 

This wouldn't be 96 pieces of video, though, right? It would be images? 

Henrik Andersson: No, 96 pieces of video. 

  Wow. That would take a pretty serious graphics card.

Henrik Andersson: No, not really. Our data chain works as the way that you think about a canvas that's 4K and each ID is taking a spot from that canvas. So for example, if you have the header display that’s 1920x360, the first header takes location 0 to 1920 down to 360, that's ID #1, ID #2 starts besides that and takes from 1920 to 3840 and down to 360, and then the shelf chassis starts below and they are taking left-right, left-right, and then by utilizing the Lenovo computer, we could have four 4K outputs so we can get four times that resolution. 

So with retail in the many years that I've been involved in this space, one of the challenges has been trying to get displays right into where the merchandise is.

But the problem has always been that if you put a conventional flat panel display into that space, it's going to eat up merchandising space. It's gonna eat up the shelf space that you want for talking about the product. One of the big drivers here I assume is that this takes up space. That it's a way to not take away from that merchandising space and stockings space?

Henrik Andersson: Yeah, we have been working very closely with the manufacturer of the gondolas to figure out how much space we can take without taking up on any merchandise. So we are taking up about one and a half inch to 1.7 inch in height, and then we are following the two foot three foot and four foot lengths.

And this is using LCDs? 

Henrik Andersson: That's LCD, yes. 

And I gather that the reason you're able to do this now is you can now natively manufacture LCDs at these sizes? 

Henrik Andersson: Yeah, we don't use any resize. When we started this project like eight years ago, we used a resize to test and see how we can get it to look and how it should work. 

Today, we are natively producing them. There are benefits of natively producing them. One of the biggest is that you get the same every time. So if you put like 10, 15 of these side by side, you want all of them to have the same backlight. You want all of them to have the same color, of those kinds of features.

And the biggest one is probably to get down in price. By utilizing a cut down like a 55 inch down to be making one shelf edge. That's a lot of waste doing that by using native screens. If the volume reaches X, we will be able to be very competitive. We are calculating, we should be able to go way below.

 A hundred bucks a foot. 

Yeah, because I remember when these thin ribbon LCDs first came out and I would see them at places like NRF, about six, seven years ago, the salespeople work in the boosts wouldn't even tell me a number in terms of price, because I gather it was ghastly, but that's changed.

Henrik Andersson: That's changed a lot. For example, we could have a two foot display today for around 200 bucks.  

And who is putting that in? Is it the brands or is it the retail owners? 

Henrik Andersson: It's both. It's both. It has been the latest 4-5 years. It's a lot of brands. It's getting more retailers, and today, it's mostly retailers on end caps.

And do they see this as part of their business model, their merchandising model that they'll sell end  caps and now it's digital.

Henrik Andersson: Yes, and that's information they see that they have, by just using packages, they cannot inform the customer of what the product is doing by utilizing video screens. Now they can inform me what's the benefit with this product and that product they can also do in different flavors.

They can tease you by looking at how good this is with their eyes and so on, and one of the key things everybody's talking about right now is dynamic pricing. You will be able to change the pricing very quickly. You're able to change products on the shelves. You will be able to Collect external data.

For example, if we say which employee has allergy medicine and so on, we can publish the pollen count onto the shelf fetch in real time.    

Are these replacements potentially for electronic shelf labels or are they kind of complimentary to them?   

Henrik Andersson: Today, it's a compliment. I can say that mostly due to the price, but as the price is still getting lower, I think they are direct competition to the ESLs, I think they are, because you have more dynamics on an LCD screen than you have on an ESL. 

With an ESL, you can do the price and maybe a barcode or something that's maybe two or three colors. That's about it, right? 

Henrik Andersson: Yeah, here you can have a full color spectrum. You can have movies, you can have touch screen functionality. There are so many things you can do. We can integrate the sensors so you can scan your membership and get your special price.

There's so many things that we are investigating right now. What's going to be next? 

And doing that is contingent at all on the kind of back office systems that our retailer has as to whether they have the data and everything to make that? 

Henrik Andersson: Here is where we work very closely with a lot of partners that build softwares.

So we worked with, for example, Microsoft, Oracle, all of them where they have the backend for the retailers, and then we were working with the digital signage companies, that’s how we can get data between those two systems. 

Is that a challenge at all in terms of working with the different digital signage, CMS options out there that they need to have a platform that can work with this high-end Lenovo box?

Henrik Andersson: No, it's not a super high end Lenovo box. It's a computer called P 340. That has an Nvidia board inside before 4K output. So a signage software will work with our solution and most of the times when we talked to a signage company, they found this complicated and it took them 15 minutes and said, oh, this is so easy.

So yes the Daisy chain and all of that kind of feature sounds very advanced, but we made all the technology on our board. So the digital signage company doesn't have to think. That technology, they just have to follow publish on our full 4K cameras.

I guess they would have to, depending on how their CMS works, maybe introduce some new resolutions that they didn't previously have, like 1920x360 or whatever you were describing?

Henrik Andersson: No, they publish 3840x2160 full 4K resolution, and then our data chain board based on the IDs are taking spots from those full 4K canvas. 

What about LEDs? I have seen some manufacturers at trade shows again, who were showing shelf edge strips that were based on fine pitch LED. Is that a consideration or not the right way to go on this? 

Henrik Andersson: The problem we have with the LEDs is the heat. We have been investigating working with LEDs because there are benefits where you can easily make new sizes. We have to make a tool and new tooling costs about $1.5 to $2 million to make a new size.

So if someone says, we don't want 3 feet, we want 3.2 feet. That's a very expensive thing. But in LEDs, it's doable. But we have power usage, it's almost 10 times more, and then we have the heat. So if we take a whole retail store and we put these LEDs out, it could be that you have to start getting more air conditioning units, basically.

I never thought of it that way. Certainly think of all those LEDs, even though we all think of LEDs as being incredibly energy efficient, if you're using thousands of them in a whole store, maybe millions of them, and that's just a lot of little lights to feed.

Henrik Andersson: They're made for outside. You could use them if you could spot the installations. I think they're fine. LCD is more energy efficient. 

The problem that I've seen with the LED versions is simply that to get the resolution, the granularity of the information down to a level that is legible like an ESL or an LCD is you're talking very fine pitch and it adds to the cost.

Henrik Andersson: You cannot do it. So if we look at our header display, for example, it's 1920x360 in resolution. That means we have 360 pixels in height. If you go to an LED, you're down to maybe 30- 40 pixels. 

And the net result of that is the visuals just don't look very good, vright?

Henrik Andersson: Yeah, I guess they will have a resolution of 150x30 or 150x40. Right now, our is 1920x360. 

So it looks like a 1994 desktop monitor?

Henrik Andersson:It depends. From a distance, and if you do the content right, it will look quite okay. But if you go down to price tags and QR codes, coupons, things like that, they will never work. And we can do that as well. We can publish coupons and everything to the shelf edge. 

So maybe down the road 3-5 years after micro LEDs mass manufacturing gets sorted and the yields are up and everything else, maybe that's an option, but certainly not right now?

Henrik Andersson: That's something we look into. We have really started looking at that, but it's way too early.  

What kind of research has been done to measure the impact of a planogram that's just conventional shelf labels and things like that, versus a portion of a planogram that has your digital shelf edge elements to it?

Henrik Andersson: Yeah. So what we have seen now is that it's a wow factor. That's one of the things. If you walk in the store and you’re making about 80% of your decisions in the store, and if you get a wow factor, you get something that triggers your brain, you will buy that product. On top of that, you have tools and gadgets, things that need to be explained.

It would be like powered rails. So we say vitamins, anything that needs to be explained, an energy drink, those kinds of fine benefits. I like telling you that by using this product we give you these benefits. We are seeing between 20% to about 300% based on product. 

Sustained or just like when it first goes up?

Henrik Andersson: It continues. We have some data from pharmaceuticals when they're explaining a product where we have 300-400% uplift, and we have also inside retail on produce and stuff like that. We have a huge growth. 

Are those brands the ones that have used other types of digital signage, like more conventional, flat panels around a store and maybe I assume it wouldn't have had anywhere near the impact, just because it wouldn't be as close to the product?

Henrik Andersson: That has been a thing. They have  advertised on digital signage screens in retail, but most of the time they are too far away from the product. So due to the impulse of buying.

The further away you are from the physical product, the less sales are you going to make. 

One of the things that you were telling is your solution in tandem with Lenovo, your partner, you're doing in-store analytics as well? 

Henrik Andersson: Yeah, we have a solution that we are introducing at the NRF which we call smart vision. It's a full analytics platform utilizing Lenovo servers and multiple cameras to collect data from the retail environment.

This is also applicable not only to retail we're doing even in transportation, education, fast food. It's about collecting data on how many people are happy walking in, or sad walking out, where they're walking. We can see the paths of walking.  We can see where most people are spending most time, and how long they are standing in front of that product. We can also trigger things. We can see for example, that there has been a spell of a drink in aisle six, and we need to call the janitor to get that clean up. We are also working on things to see if they are putting things in their pocket, or they're putting things in the cart. We can see if someone is acting violent or has a tendency, if something could happen. This is what we work on. We'd like machine learning together with Intel to figure out what kind of information we want. 

So you're using Intel's OpenVINO? 

Henrik Andersson: Yes, we are using OpenVINO as the base. 

Retail analytics using computer vision has been around for 15 years, maybe even longer. So that part is not new. What's distinct about what you do versus some of the more familiar ones that are already known in digital signage?

Henrik Andersson: It’s probably our dashboard, an easy way to get an overview and also the flexibility to pick the things you want. We are trying to do the same here as we do with the screen work outside in, instead of inside out, we don't tell the customers that this is the data that we think you should have. We are asking them what data do you want to make your business better.

Most of that is basically to combine multiple cameras, to get the whole view. Instead of having one camera inside of, by one header display by using this, we can see the moving paths in the store. We can see, for example, during X hours a day, we have this many visitors, but we only have this many cashiers open. Then they can move things around in the store to create something more streamlined.

You want green lines across the whole store. You don't want to, like some aisles are more visited and otherized. You want all of them to move like a typical Ikea. Where you want to go, you have to go with the whole store, even if you want to get the thing at the end of the story.

Yes, you do and it's not my favorite way to shop, but...

Henrik Andersson: That's the way to create impulses on the way to the thing that you're intended to buy. Look at the carts at Ikea. You buy so many things on the way to the exit that you'd never planned to buy. 

The reference case that I'm familiar with for your company, is a seat to table store down in south Florida? Is that still your biggest deployment for this, or, where have you put your screens in? 

Henrik Andersson: That’s the biggest single-store deployment. We are deploying in multiple stores, but often as a single end cap or category, and there will be a lot of announcements next year of full grocery stores that are getting this installed.

More than just an end cap, but if it takes you to tape, for an example, we have about 200 screens in that store, including shell fetches, header, square screens. So that is an Intel Lenovo and initial screen show, and everybody's welcome to come down and look at it.

So that's your living lab, or you can walk people through and go here's what's possible.

Henrik Andersson: Yeah. So that's where we test everything from the analytics to the screens to do dynamic pricings, everything is tested there and that's better than having it in our own office. 

Lenovo is one of those very large computing companies that has been on the edge of digital signage and some of these companies like HP and so on, they're in they're out. You don't really know what they do, but it sounds like Lenovo has made a concerted investment of capital and people into the space. 

Henrik Andersson: Yes, Lenovo has grown a lot in the OEM division. I think when I started working with Lenovo OEM, there were about five guys. Now they're up to 50-60.

And just working specifically with you or are they active in other areas as well?  

Henrik Andersson: Basically, it's the whole thing. If you're working outside in instead of inside out, trying to figure out solutions for each individual company. It could involve computers only or it could involve computers and monitors.

One of the things we did in 2020-21 was a full line of monitors with anti-microbial coding on them. So they are like killing viruses and bacterias. But one of the key things as well is that the whole chassis is aluminum. So it's 95% sustainable. 

And is that an ask that you get from retail now?

Henrik Andersson: Mostly Europe, because they don’t want anything that has plastic in them anymore.

That'll be a big change if it starts to happen here. 

Henrik Andersson: So if you go to a grocery store in Sweden, for example, you have to pay 50 cents for a plastic bag. That's what it cost. If you want to bring the groceries home, you have to pay 50 cents for the plastic bag.

Yeah. That's starting to happen here in Canada as well. And I'm constantly buying more bags cause I forgot to bring the ones I have in the car.

Henrik Andersson: Every Swedish guy  has a car full of such bags. 

What do you see happening in the next couple of years with the kind of work that you do? Do you imagine there are going to be other companies developing copycat solutions? For instance, I was in Taiwan when we still could travel about two and a half years ago, and I know that AUO, which is a huge LCD manufacturer, has a whole feature wall of odd shaped ribbon displays and things like that, so it seems like this would be accessible to more accompanies now. 

Henrik Andersson: Yeah. So AUO is one of our partners. So if we look at a couple of their sites that they have, we have been part of their engineering process. We are being part of developing the size, the functionality, the backlight, all those kinds of things.

So AUO is one we have HKC, we have BUE, we work with all of them. Will be the products similar to our products on the market. Yes, there will be. We are trying to be innovative. We are trying to make it easy. Most of our competitors are basically working as if each screen is an individual screen. They're using an Android board put in there and by using an Android board inside, you will be able to push one content to that screen. The problem you're going to face is if we put multiple screens up, for example, you have a limitation of how many units can be connected to a WiFi network.

You would have a limitation of power plugs. You need so many power plugs to have power to each display. Think about the digital signage licenses. Now, this is nothing but fun for the signage company, if you have 3000 screens in a store and each screen has a built in a hundred players, that 3000 licenses. And also about servicing them, it should be easier to take one away, put one back, you know what a computer is, you have something that needs to be updated in one location, not 3000 locations. 

So in other words, you could source something like what Instorescreen has off of Alibaba or wherever you want to go. But the simple question that you would ask or somebody smart would ask or somebody else who's smart would ask is will it scale? And it just doesn't, as you just described. 

Henrik Andersson: No it doesn't, and to get it with the, know what we are able to today to have very smart servicing options. We have longtime warranties.  We have technical people on 24x7 call. It's a disaster if a retail store shelf edge goes black. For example, we need to fix that very quickly and not call an Alibaba contact and you get a new screen in three weeks. 

Yeah. That doesn't work so well. All right. This was great. If people want to learn more about your company, where do they go online?

Henrik Andersson: They can contact Lenovo OEM or go to lenovo.com or they can go to instorescreen.com. 

All right. Perfect. Thanks for your time. 

Henrik Andersson: Thank you very much.