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The AV Industry’s Secret Weapon for Surviving Economic Uncertainty

Published: 2023-06-21

Anyone tracking the news can attest that our economy is in a state of uncertainty, but it’s a complex issue and there are a variety of causes. AV operates within the global economy, which means no one is unscathed. We continue to see supply-chain disruption despite inflation tempering, and the war in Ukraine is only adding to this issue along with energy costs.

Closer to home, rising overhead for companies and families isn’t letting up, and we continue to see corporate layoff reports make headlines. The federal government is steadfast on raising interest rates to dampen the former, but years of easy money, mainly due to pandemic stimulus, thrust a prominent yet incompetent financial institution into a bank run; for me it’s an eerie flashback to the Aughts. With so many leading indicators suggesting recession is imminent, it’s natural to wonder how all of these factors will impact the broader AV space.

Am I concerned about the economic future? Of course. Finance executives like me always carry a healthy amount of concern about what lies ahead. But, am I worried? No.

All too often, people conflate concern and worry, yet the terms are quite different. Concern is a rational process — if you’re concerned, you’re taking in all the information and making decisions that will keep your business safe. On the other hand, worry is a less rational feeling rooted more firmly in emotion. Put a different way, concern stems from known issues, while worry often comes from a place of not knowing what’s next i.e., the fear of the unknown.

Bringing this tangent back to my original thesis: Yes, I’m concerned about economic fluctuation that may transpire in the near-term, but I’m not worried. Why am I not worried? Because even during a time when businesses are trimming expenses and staff, we continue to see strong investment in building out the AV infrastructure of these businesses. While this might be counterintuitive, it makes sense when you examine how and why businesses continue to invest in AV — and digital signage in particular — during uncertain economic times.

Investing in Better Experiences for Employees, Shoppers and Visitors

Put simply, digital-signage technology can uplevel experiences just about anywhere. Retailers are installing screens in stores at a rapid pace to create memorable shopping experiences that keep customers engaged, informed and even entertained. Employers are quickly learning that employee-facing digital signage can be used for so much more than employee communications. And visitor experiences in all sorts of venues are being reinvented with the help of digital signage.

I expect this sort of focused investment to continue despite any economic challenges that may or may not transpire in the near future. Why? Because delivering these types of content-rich digital experiences keeps employees happy, keeps shoppers shopping and keeps visitors coming back for more.

Funding Digital-Signage Investment in New Ways

In my role as CFO, I’ve witnessed a financial evolution that isn’t widely discussed: Digital signage is no longer viewed as purely an “IT expense.” This hasn’t always been the case. Traditionally, most digital-signage projects were funded via the IT budget. It makes sense — we’re talking about cables, screens, media players, mounting hardware etc. However, what I’ve seen in the past few years hasn’t been a slowdown; instead, they are now projects that are funded by departments other than IT.

This is because organizations are seeing digital signage for what it really is — a multifaceted tool that can improve business in so many ways. Is digital signage a marketing vehicle? A human-resource tool? An employee-communications platform? A branding asset? Yes, to all these applications and many more!

What this means is that businesses are finding creative ways to finance digital-signage projects whereby the cost is co-opted or fully funded by parts of the business outside of IT. The result? More purse strings to pull, and creative ways to share the investment.

Some might wonder, will digital signage become a potential victim or victor of capital reallocation in AV? I’ll leave you with the idea that the digital-signage market in particular is poised to not simply survive tough economic times, but to thrive in spite of those challenges. The value of digital signage in AV is proven and substantial. For that reason alone, I believe our opportunities for the future remain strong, no matter the economic challenges that come our way.


Mercedes Kuder is partner and CFO of Red Dot Digital Media, a digital signage specialty integrator based in San Diego, Calif.

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