Walgreens Boots Alliance said last month it planned to expand its trial of digital merchandising and advertising screens on the doors of refrigerated compartments. In an extension of this test that begun last year and is now deployed at 50 stores in Chicago, Walgreens will be sending the technology to 2,500 U.S. outlets in the next 12 to 18 months after finding it boosted sales more than traditional displays.

The doors are outfitted with technology from a Chicago-based company called Cooler Screens that uses optical, infrared, proximity and accelerometer sensors to detect when a shopper is lingering outside a door or has opted to pick up a particular product. The sensors can feed that information to the retail store to inform its restocking decisions.

The screens brightly display the food and drinks inside the coolers. Food and drinks vendors can also pay to display ads, including full-screen door takeovers or smaller pop-ups that highlight nutritional information. Advertisers’ targeting options range from pinpointing a time of day, certain weather conditions or events such as the Super Bowl. The ad revenue is split between the participating retailers and ranges from a 25% to 75% share, depending on factors such as their capital expenditure. The advertising prices range from a cost per thousand impressions of $1 to $15, according to the product and type of campaign.

Where Cooler Screens were installed, retail stores’ monthly sales rose 5 to 12 percentage points higher during January to May 2019 over the prior year’s stretch, as compared with sales at similar area stores without the technology, Cooler Screens said. Sales of Cooler Screens-advertised products rose 5 to 10 percentage points higher than sales of the products not advertised in this way. MillerCoors, Coca-Cola, Chobani, Red Bull and Conagra are among the more than 65 food and beverage companies that have participated in the trial so far. Cooler Screens also has ongoing pilot tests with other retailers besides Walgreens, but is keeping the names of those retailers confidential, the company said.

But the trials have encountered some bumps in the road. When Cooler Screens first started touting its technology at the start of last year, it spoke of potential future capabilities such camera and eye-tracking technology that could serve different ads depending on the inferred demographics of shoppers. This sparked “a very passionate discussion” in the press and among consumers around the potential privacy implications, according to Cooler Screens CEO Arsen Avakian.

The initial response to Cooler Screens’ launch “was an eye-opener for me,” Avakian said. “We learned privacy is a strategy [and] we have to take a leadership” position. To date the company has not deployed facial or eye-tracking technology or targeted ads based on the gender or age of a shopper, a Cooler Screens spokeswoman said.

Ann Cavoukian, executive director of the Global Privacy and Security by Design Centre, has been advising the company on its approach. About 20 years ago, Cavoukian, the former information and privacy commissioner of Ontario, created her own “privacy by design” framework, which has since been incorporated into the European Union’s General Data Protection Regulation.

This privacy by design approach “is all about proactively embedding much-needed privacy measures into one’s operations, in an effort to prevent the privacy harms from arising,” Cavoukian wrote in an email. “That is exactly what Cooler Screens has achieved: no personally identifying information is collected nor retained, achieving their goal of being completely ‘identity blind.’”

A Walgreens spokeswoman said the company does not capture or retain any information that individually identifies customers. “There may be future camera enhancements to improve the customer shopping experience, but all such enhancements will be carefully reviewed and considered in light of any consumer privacy concerns,” she said.

Research conducted by Look Media for Cooler Screens found 72% of the 5,700 customers surveyed agreed or strongly agreed that they preferred the digital doors to traditional doors.

Neil Saunders, managing director of GlobalData Retail, said while the consumer focus groups that his research and consulting agency has set up have shown that consumers are interested in new in-store technology, he does not think digital cooler doors revolutionize the shopping experience.

“If Walgreens genuinely wanted to enhance its stores, there are a lot of basic things they should focus on before toying around with digital innovation,” Saunders said. “The bottom line is that I suspect this is more about Walgreens wanting to drive incremental revenue by facilitating brand advertising and marketing in their stores than it is about satisfying the consumer.”

The expanded deployment of Cooler Screens’ technology within Walgreens stores will cost in the “hundreds of millions of dollars” range, Cooler Screens estimated. It declined to comment on how much investment it has raised so far, beyond that it is approaching a Series C round. The Wall Street Journal reported in January 2019 that Cooler Screens had raised about $10 million in funding, including an investment from Microsoft, which is offering software to power the Cooler Screens infrastructure.

For 2021, Cooler Screens is planning to sell its advertising by plugging into third-party demand-side platforms, so advertisers can extend their digital campaigns to the in-store doors. Cooler Screens is also testing an analytics platform for ad buyers, which would “mimic the same approach Google [has had] with Google Analytics,” Avakian said. And Cooler Screens would offer its existing customers analytics data and technology to optimize their campaigns at no charge. The company is also considering charging food vendors and retail stores for the data it collects about stocking levels, according to Avakian.

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