Window of Opportunity
May 1, 2008 12:00 PM
When a store goes dark, someone pays for that vacant space. Either the retailer pays rent on its unused space or the owner incurs the loss of income until the space can be re-leased. But, retailers and retail real estate owners may have another option today — they can make money by leasing a vacant storefront's windows for advertising.
Newton, Mass.-based WindowGain and New York City-based Inwindow Outdoor are working with retailers and retail real estate owners to generate revenue on empty stores. But, the two companies are vastly different and their technology adapted to different retail venues.
WindowGain, founded in 2004, uses a patent-pending technology to project high-definition video images onto store windows that have been covered with a black “tint” that is applied and removed with water. It was specifically designed to increase contrast ratio and ward off ambient light. Projectors are located inside the vacant store, typically 5 to 10 feet behind the windows, and content is uploaded to projectors through a local computer that updates content online.
Meanwhile, Inwindow Outdoor, which was launched in 2001, wraps storefronts with a layer of vinyl to create a blank slate for advertisements, effectively creating eye-level billboards. The minimum Inwindow Outdoor display is 30 feet wide, although the company has some displays that are 120 feet wide. The company counts Equity Office, Related Cos., DoubleTree Hotels, Marriott, and Cushman & Wakefield among its clients.
Both companies find advertisers and create the advertisements.
“This is not only a revenue opportunity, but we're taking a space that may be a bit depressing and dead looking and making it more attractive,” says Inwindow's head of real estate operations Ray Lee. “Neighboring retailers really like the fact that an empty cavity next to them now has a sense of vitality.”
WindowGain's technology works best on storefronts that receive a lot of drive-by traffic and is designed to be used in power centers, open-air centers and lifestyle centers. Advertisers can measure the effectiveness by looking for patterns in nearby store sales, says Prem Hira, COO of WindowGain. The company is currently working on additional technology to measure dwell time.
Conversely, Inwindow Outdoor's technology relies heavily on foot traffic and is best suited for buildings with ground-floor retail space in urban environments or enclosed regional malls. “Ground-floor retail in urban areas with a lot of foot traffic is better because the facade is parallel to the sidewalk, thus it catches the eye of a pedestrian.” Lee says. However, the company also has some “storescapes” that wrap around street corners, making them visible to both pedestrians and vehicles.
Inwindow Outdoor is active in eight markets and is making a big push in New York, Chicago and Miami, Lee notes. Its advertiser roster includes Jeep, Washington Mutual and Red Bull, among others. Inwindow's advertising rates are based on circulation, demographics, attractiveness of the facade, size and location.
WindowGain's rates are based on similar criteria, and rates in Boston, for example, range from just over $3,600 per month to $8,730 per month. The company counts Verizon Wireless and the Boston Globe among its advertisers. Advertisers can change their ads as often as they want because they're digital. In fact, advertisers often update content daily, and some require WindowGain to access RSS feeds that allow ad spots to update in real time.
WindowGain recently signed its first national contract with Cleveland-based Developers Diversified Realty Corp. Over the next few months, the firm will roll out WindowGain in 20 lifestyle and power centers across the United States.
“The benefit from WindowGain is two-fold: we generate revenue from the space because we're essentially renting our storefronts and we add value to the shopping experience by providing information to our shoppers,” says Marc Feldman, director of strategic relationship for Developers Diversified. As part of WindowGain's agreement with Developers Diversified the company is paying the REIT a fixed monthly fee per location. “We very much see this as being found money for real estate owners,” Hira says. (Inwindow also uses a fixed-payment model.)
