The screens, developed by startup Cooler Screens, use a system of motion sensors and cameras to display what’s inside the doors, as well as information about products, prices, offers and, most attractive to brands, paid advertising. Technology provides stores with an additional revenue stream and a way to modernize the shopping experience. But for customers who just want to look in the freezer and grab their ice cream, Walgreens (WBA) risks pissing them off by solving a problem customers didn’t know existed.
The company wants to reach more people with ads, but the response so far has been irritating and confusing.
“Digital fridge screens at Walgreens made me watch ads before I knew which door the frozen pizza was in.” said someone on twitter. Another echoed: “@Walgreens NOBODY needs a TV to replace doors in your cool aisles…. Stop.”
Retailers are looking to add new experiences to their physical stores. But many consumers are reluctant to change their habits and are certainly not used to watching ads for freezers.
“People really appreciate their routine. They’re not always looking for entertainment,” said Julio Sevilla, an assistant professor of marketing at the University of Georgia who studies consumer behavior.
According to him, digital screens can add uncertainty and physical barriers to a simple and literally transparent process: access to a glass refrigerator.
Sevilla does not believe that consumers are looking for novelty when they visit the grocery store: “We all love to go to the supermarket and know exactly what we are buying. I also know exactly where everything is. environment, people like their certainty and simplicity.
Stores with big names
However, Walgreens and Cooler Screens are moving forward. Walgreens (WBA) began testing screens in 2018 and has since expanded the pilot to several thousand locations across the country. Several other major retailers are running their own tests with Cooler Screens, including Kroger (KR), CVS (CVS), convenience stores GetGo. and Chevron gas stations (CVX).
“I hope one day we can expand into all parts of the store,” Cooler Screens co-founder and CEO Arsen Avakyan said in an interview with CNN Business.
The startup currently has about 10,000 in-store screens viewed by about 90 million shoppers every month, according to the company. Avakian said the company intends to bring its digital displays to a wide range of retailers, including beauty salons, consumer electronics and home goods.
A Walgreens spokesperson said in an email that Walgreens is “committed to exploring digital innovation in [an] efforts to provide new and different experiences for our customers.”
A spokesperson said the screens add value because they provide customers with up-to-date product information to help them decide what to buy, and that Walgreens is evaluating a pilot project to decide whether to expand further.
‘Moment of Truth’
While not all Walgreens customers are fans, the Cooler Screens concept has attracted established brands such as Coke (KO), Pepsi (PEP), Nestle (NSRGF), Kraft Heinz (KHC) and Monster (MNST). It has raised over $100 million from backers including Microsoft (MSFT) and Verizon (VZ).
Cooler Screens CEO Avakyan said he developed the concept after seeing shoppers in the store take out their phones to find product information and reviews. Traditionally, in-store advertising has been limited to options such as signage, promotions, and prominent placement on shelves. But Cooler Screens’ targeted digital advertising shows “the moment of truth,” Avakian said, when consumers decide which product to take out of the fridge.
Brands can run ads scattered across multiple freezers, those that display food labels on products, or ads triggered by the weather or time of day. An ice cream company might want to advertise when it’s hot outside, while a coffee brand might hit morning fever.
This setup is designed to help stores increase their high-margin ad revenue to offset their low-margin core retail business. Companies pay Cooler Screens to advertise on the screens, and retailers get their cut.
“There’s a big movement in retail right now to create what’s called a ‘retail media network’ that leverages all the ways brands interact with that retailer digitally,” said Chris Walton, former vice president of Target, who blogs about retail. Omni Conversation.
“It wasn’t a problem”
Cooler Screens says that 90% of consumers surveyed prefer their digital screens to traditional refrigerators, and that the displays drive growth in store sales. (Walgreens did not comment on this.)
But beyond the confusing messages on social media, the technology has also attracted disinformation and conspiracy theories. Last month, Politifact debunked a viral video on Facebook that claimed “Walgreens refrigerators are scanning customers’ hands and foreheads for the ‘mark of the beast’.”
Avakyan insists that the technology “does not identify an individual” and protects consumer privacy. Freezers have front-facing sensors used to anonymously track shoppers interacting with the platform, while internal cameras track food stocks.
Some customers expressed dissatisfaction with this experience. People are not sure whether to touch the screens or talk to them. The items on display do not always match what is inside because the items are out of stock.
Henry Brewer, who recently encountered one of the digital screens at Walgreens in Chicago, said the technology feels “very harsh” and “intrusive.”
“We see ads literally everywhere, and now I have to go watch it on the refrigerator?” he said. “It doesn’t just feel necessary, and I think it turns the consumer off when it wasn’t an issue.”
For Avakyan, this is just the expected growth pain. Cooler Screens plans to educate customers about digital displays and launch features like voice recognition so shoppers can ask for prices or product locations.
“This is the future of retail and shopping,” Avakyan said.