Anders Apelgren, Visual Art

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

So many companies in the digital signage ecosystem are all about the technology, still, so it's interesting to come across a tech company that functions as a turnkey provider, but leads with the creative aspect. It's even in the name - Visual Art.

The Swedish company started roughly 25 years ago, and has steadily expanded its footprint and operating base. It is now active in 32 countries, though northern Europe is still its busiest territory.

One of the interesting aspects - and I don't think I'ver seen this - is how it is owned, in part, by an out of home media company, UK-based Ocean Outdoor. Ocean bought the media wing on the business back in 2019.

But ad networks are not the main focus - with much of Visual Art's business in retail and QSR, through whale clients such as McDonalds.

I spoke at length with the CEO of Visual Art - Anders Apelgren.

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TRANSCRIPT

Andres, thank you for joining me. You're in Stockholm. Is that the main office for your company? 

Anders Apelgren: Yes, the whole company was founded in Stockholm. So Stockholm is still our biggest place. 

And where else are you located? 

Anders Apelgren: We have companies and offices in 8 countries. It's all in the Nordic countries, Sweden, Denmark, Finland, Norway, and we’re also quite big in Germany and Spain. We also have a small company in the US. 

Okay. So is expanding beyond the Nordic region something that's happened recently or has that been evolving since you started? 

Anders Apelgren: We have two different business areas before, so we were in the nordic countries before, but we sold half the company two years ago. Now, we're expanding again, outside the Nordic countries, and to be honest, Sweden is quite a small country, so the market is so much bigger in other countries like the US and Germany. 

It's interesting with Sweden and the Nordics in general, it seems to be something of a hotbed for digital signage.

Anders Apelgren: Yeah, I think we are quite good at it in northern Sweden both in software, and also with the audience, since we understand technical things. So I think it's quite easy to sell to Swedish people and companies. So we are at the forefront, at least in mass deployment, maybe not in having these huge, big things like in Times Square, but I think most deployment of screens are in Swedish. 

That's interesting. Is that just a particular mindset? 

Anders Apelgren: No, but I think, on average, people see that they can earn money on the screens even by selling more or by selling commercial space on the screens and they are seeing opportunity with the price going down with screens, more and more companies are doing it.

Okay. So can you give me a rundown on what Visual Art does and the breadth of services?

Anders Apelgren: We are a one-stop shop so we can give the clients everything they want. But of course the big foundation we have is our tech part. So we have our own CMS and we also have our media player. The media players can work on any platform so that's a big strength we have, and we are selling that software to competitors as well as a white label product, that is the foundation of the company. 

But since many other companies don't have a one-stop shop partner, we can help them with content, strategies, sell hardware and do installation as well.

Yeah, that seems to be almost the default demand now of larger companies. They're basically saying that they want to stick to what they're good at, and they'd like to outsource all of this to a company that is good at that.

Anders Apelgren: Exactly. And that's why we are expanding to so many countries, because we need to be close to the customer otherwise we won’t get the business.

Did you start as an integrator or a solutions provider and then add software? Or did you start as a software company? 

Anders Apelgren: We started as a production company, so we have a very good background in creating content. 

Interesting. A lot of companies in the digital signage ecosystem have branding that is very much about their technology and that's how they market their technology, whereas your name and your go-to strategy seems to be about the visual side? 

Anders Apelgren: Absolutely, if you don't have the correct content on the right screen location, it’s useless. You need to understand what’s the meaning of this screen and where you should place it. You can place the screens too high in the grocery store and nobody sees them. It means the whole thing is about understanding how to use the screen in the best way. 

And it is that easier to do now than when the company first started? 

Anders Apelgren: I think it's easier to do that thing in Sweden especially, and in the mature markets, but there are still a lot of RFPs out there who only focus on software and they don't really understand what most will have in the future because most of our clients today have a lot of integration. 

For example, the biggest grocery chain in Sweden is ICA and it is one of our clients. We have almost 95% of content automated, so it's done fully automatic. Nobody's creating the content. So you need to understand when you buy a software, what is your end goal with the solution? Not just buying the software. 

Yeah, really, and using those integrations. I also found it interesting that a couple of your offerings that maybe aren't a part of the norm of a typical digital signage provider is you have live data integrations for sales performance, for things like McDonald's and so on and instead of it being a dashboard that gets pushed to a large format screen. These are dashboards that are being pushed to iPhones and smartwatches, right? 

Anders Apelgren: That’s correct. We have McDonald's in perhaps over 20 countries. With the information it's not only sales, it's a lot of different information about the stores. So the store manager or cashier can see the sales in realtime.

Basically the demand for this was that they had quite bad systems. It's the same thing in many big companies. They're very slow. You have to go to five or six different places to get the data. So we collect all the data for them and push them down to their phone. So they have all the sales, all the stores on the phone in real time.

Was that a product that you developed because they asked you to develop it or did you develop it and put it in front of them? And they said, “yeah, we like it”?

Anders Apelgren: I mean it was in Sweden that they wanted to have a big screen, just a dashboard with the template of the company. But then when it gets all the data, we realized we can make a much better application of it. So then we created the phone and watch application, but the idea came from McDonalds in Sweden. 

Is there a lot of demand for these kinds of operational dashboards that would be on large format displays in the back office of a retailer or in logistics? 

Anders Apelgren: I think that time has passed. I think nowadays you have everything on your phone. So I think if you use big screens now, it’s probably to get the information to your staff more or less. So in your crew room, you might have some kind of big screen with information, but it's quite hard to reach the young people in a big company getting information.

So that's why I was wondering about that. So maybe not the sales KPIs and so on, but there would seem to be a lot of information in production areas that is the only way you're going to get this information in front of people is on a large screen because they're not going to have this dashboard app on their phone, or if they could have it, they probably wouldn't look at it?

Anders Apelgren: They wouldn't look at it. That's the problem. So you need to put it in their face more or less. 

Is it a lot easier these days to do these kinds of beta integrations? 

Anders Apelgren: Absolutely. Nowadays most companies have quite good backend systems, but still we have a lot of big companies who are facing a lot of legacy systems that are not that easy to work with, but it has gotten easier, absolutely. 

So what do you do with them? 

Anders Apelgren: For McDonal’s, from the beginning, we made a crawler application, so we logged in on a webpage and crawled all the sales figures from that system, because that was the only way to get the data. But today, of course we can get it through some kind of API. So it's moving in the right direction.

You have your own signage player, a CMS platform. When did you launch that? 

And I'm curious, given that the Nordics countries have numerous software firms that have their own CMS platforms as well. So why do it yourself when there is so much out there? 

Anders Apelgren: We launched the player in 2010, and back then, basically there was no really good platform at that time. A lot of screens were black, no one had control over the physical screen. They were considered lucky to have control over the media player. 

Of course they're getting better and better. But at the end of the day, this thing needs to be working every day and also needs to be able to do whatever the clients want to, and so far I haven't found any other software that can do everything that we can do with our software. So we’re quite proud of our software and we sell it now as a product to competitors. 

And you said, other companies can white label it? 

Anders Apelgren: Yes, exactly. So we’re selling it over, like we have a big distribution in Australia, for example.

Okay. And you also said you do your own media players? 

Anders Apelgren: No, not our own media players. We can run on all media players. We only use standard products like Samsung or LG, but we can run on Windows, Linux, Android, iOS, and so on. 

Are you using a lot of smart displays? 

Anders Apelgren: Absolutely. If I look two years back, or three years back, I think 80% was like a Windows or Linux computer and 20% was system on chip. Today I think 95% of what we sell is system on chip and 5% is like a Windows computer. So the trend has shifted quite quickly to systems on chip. 

It's funny because I've been following the system on chip ecosystem for about nine years now, when it first came out and for the first many years, I spent the majority of those years there were nothing but detractors who were saying this is not the way to go, it's problematic. There's not enough power on and on, and it's just a bad thing to do, but obviously the market has shifted that way. 

Anders Apelgren: Absolutely. I think four years ago now when Tizen was launched, we tested it and there were so many problems with it.

So we acquired a big reseller in all the countries. We got like a person in Korea coming to Sweden. So we hired him to this desk for four weeks. He reported back all the problems we have, and after like three months, we had a stable product. So Samsung is very grateful to us that we helped them to make Tizen stable. 

I gather one of the big attractions of a system on chip is simply that you have this consolidated display unit with minimal cables and therefore minimal things that can work loose or be pulled loose or whatever at a remote location. So maintenance costs drop substantially? 

Anders Apelgren: Absolutely. Of course you can also make the installation look nicer if it wasn't to get tied into the wall or wherever you want to keep the screen. It's easy to install and there’s only one piece that can break down. 

Also, you have one supplier that would help with the solution. You have no Samsung or LG to blame. If it doesn't work, is it the media player or is it the screen? It's the screen because that’s everything that you have. 

Yeah, you don't have all the finger pointing. What is the primary vertical market that Visual Art goes after? Is it retail? 

Anders Apelgren: I think we are quite wide in that, but we are really strong in retail, but I would say fast food, gas stations, and that's just a coincidence.

It happens that we come to markets that are exploding, and if you look at gas stations in Sweden, they all now have this menu board, and coffee screens, most of them have windows screens. If it goes to Germany, almost no one has almost anything yet, but they're all asking for it right now. And then of course, you're in a good position. If you have done it in all the gas chains in Sweden, you have the knowledge. 

And they're using that to pull people into the store, I assume, and because they're now, maybe not making as much money selling tobacco products and things like that, but they've got food items?

Anders Apelgren: Exactly. They need to bring people into the store to buy some food items. 

And you also do QSR? 

Anders Apelgren: Absolutely. We have McDonald’s in all of the Nordics and Subway all over Europe/ 

Ah, okay. So you've got a pretty big footprint then? 

Anders Apelgren: Absolutely. We're very proud of them. Both those clients want to have a one-stop shop solution. They want to have at least somebody that can do content as well and also help them with both costing and segmentation. 

How hands-off is it? 

I did some work with a QSR chain here in North America, Tim Horton's going back a ways and I remember years ago asking them what they thought of the software they're using and they said, we have no idea. We've never seen it. We don't have a login or anything. They handed the whole nine yards to the solutions provider and said, you do this for us, and we'll have a, not these exact words, but we’ll have a weekly call or something and just review what's needed.

Anders Apelgren: I think it's a bit different, but many companies are still doing that. They just want it to work. So they tell us this is what should be on them and so on, and then they don't care about how it works as long as the screens are showing the right contents more or less. 

We have a lot of template based systems, so some clients do all this themselves. So they schedule everything themselves with templates.

Who would be your largest clients? 

Anders Apelgren: McDonald’s and ICA are the biggest clients we have.

Okay, and you are also doing some kind of flagship or signature and installations. I saw one, for example, for Audi and I've seen some large groceries where you've got entire facades of the store in LEDs?

Anders Apelgren: Absolutely. Of course we help clients with flagship stores as well. It's very good for publicity and so on but to be honest, the big money is in volumes. So the flagship stores, we're happy to do them, but mainly those screens are quite expensive, and also don’t have good margins on them to be honest. We do them, but we want to have the whole chains to do the volumes, so screens rollouts and stuff since that’s where the money is for us.

Yeah, I guess you can do a big video wall for the front of a store and it's one software license. 

Anders Apelgren: Exactly! And the software and the support doesn’t give us recurring revenue.

What's been the lesson out of the last two years with the pandemic and retail being conflicted and in some cases closed and restricted and everything else? 

Anders Apelgren: That's a good question. I think some shifts have been to use the screens for other purposes. So for example, in Sweden, you're limited in how many people you can bring into the store, depending on the size of the store. So then they want to use the screen to say, “Sorry, you cannot enter right now. There's too many people in the store.”

Otherwise, I think the sad thing is that many retailers had a tough time surviving because people weren’t coming to the store, buying online and stuff.

So has that slowed the retail business on your side? 

Anders Apelgren: If you look at the trend for all of Europe, we have lost like 18 months of growth. So if you look at the curve of expanding signage in Europe, we lost at least 18 months in developing or rolling in Europe during the pandemic. So obviously it affected the sales. 

You mentioned that the idea of metering for store capacity, has been taken up by many companies in terms of, going beyond just a simple sign that says 200 people at a time are allowed in here, are you doing this sort of automated sensor driven things where it's looking at who's leaving and therefore allowing people to come in?

Anders Apelgren: They use cameras to count the people automatically, and then the counter can say, “Now there are 15 people in the store. You have to wait outside, please!”, and the screen goes red. 

So I've seen that talked up a lot. I haven't seen that many real world examples of it being done. You're saying that you've deployed that sort of thing?

Anders Apelgren: Yeah, we have done them together with some grocery chains, and they had all of the people counting systems so we just hooked their people counting system and then changed the content on the screen.

Oh, okay. So they were using it just for store analytics and they've adopted it for this as well?

Anders Apelgren: Exactly.

Interesting. Some of the other things that were floated in the past couple of years was the idea of touchless based interactions and things like infrared, temperature sensors, and screens with hand sanitizer dispensers below them and so on, and I've been hearing from people who didn't have any reasons to say one way or the other that they understand there's a lot of vendors who invested in the hardware and had a lot of trouble selling it. 

Anders Apelgren: Yeah, we have a lot of companies coming to sell them as well, but I agree it has been a problem, and as I see it now, the question is now why should you use touch screens in the future? You have your own device in your pocket, which you don't need to standardize. 

So what we have done for McDonald's as a pilot in the US is that you can go to the kiosk in the store, you take your phone and you scan the QR code on it, and then you could use your smartphone as a remote control to that screen. So you get the same image on the shelf, in your phone, and then you can touch the phone and then control the kiosk. So it works like a remote control to the kiosk. That's even better than deploying new hardware and touching something anyway. So there are different options to do that, I’d say.

Did that go beyond a demonstration? Is it used? 

Anders Apelgren: This was last spring in the US and it was really high up in McDonald's management team. So we demonstrated this for them. They tested it for a store a little bit, but then they forgot about it because think about how many kiosks you’d have at McDonald's and they aren’t cheap.

What's the process that you go through when you engage with a new client? Personally, if I'm sitting down in my days doing consulting, the first question out of my mouth would always be: Why am I here? Why do you want to do this? 

Anders Apelgren: We do the same thing, and most often we offer them to do a workshop with a strategy that will help them to take this forward and answer why they want to have the signage? What is the purpose of them? 

And if you look at many retailers in clothing, the main thing for them is to get people into the store. So the window screen is the most important and then, how can we attract people to the store? So you need to understand what your biggest issues are, what they want to achieve. So normally we do workshops and we build a strategy for the clients and then we start to ask, where should the screen be and what should be on them? 

And as you said because you're turnkey, you can help them with all that as well, including producing the content? 

Anders Apelgren: Exactly and during integrations, almost all the screens we install, we frame them so it fits into the interior as well. So not just putting a screen because it looks quite dull to have a screen only, it needs some kind of framing to make it melt into the interior. 

It used to be the case, and I'm curious if it still is that if you handed the creative side of digital signage projects off to an agency, it's not a medium that they understood and they generally didn't do a very good job with it.

Is that still the case that you're better off working with a company such as yours because you understand the dynamics and the sight lines and everything? 

Anders Apelgren: Yeah, I think so. They are getting better, absolutely, but they're not thinking in our way, like If you think you have the screen in the window, you cannot do very long content, just also thinking out how the audience is on this screen? If you look at the agency, they look at TVs and they don't really understand what will be the flow with people in front of this? 

So they need to learn a lot, but they're getting better, I would say. 

I read on your website that you now have a new product line. You're now also marketing LED displays, right? 

Anders Apelgren: That’s correct. We are importing them ourselves from China, and that's basically to get these big flagships. 

Also, the price is going down so much, especially for indoor LED screens that you can have in your window normally inside, and testing a lot of RFPs with price pressure on, we cannot have somebody in between to get the lowest purchase price to win those deals. 

So there's no end of options for LEDs. Why have your own? Why not just say we understand this stuff, we'll find you the best option. Is it a matter of control and understanding the supplier? 

Anders Apelgren: Normally, we avoid doing this. We have always used Samsung and LG before, but we cannot win the space if we have somebody in between, in the sales process, otherwise you will lose these big flagships that we talked about because we will price ourselves out of the picture. So that's why we're doing this.  

Is it difficult to find the right supplier? There are so many and the quality and particularly support can vary dramatically between them. 

Anders Apelgren: The supplier that we use, they’re quite stable now. We have used them before, even though we haven’t bought directly from them.

Is there technology on the software and the display hardware side that you guys are intrigued by or that you see potential for? 

Anders Apelgren: Not really sure what you are asking for to be honest. 

I think the big ones for me would be things like LED on different kinds of display surfaces, like on film or even embedded in glass. Some of the emerging tech... 

Anders Apelgren: Absolutely. We did an H&M store, this is supposed to be 10 years ago, and in this store, we had a big projector that displayed a huge screen on the window, and then we had infrared technology that could announce the audience floating outside the window. So we tested those kinds of things, but so far we haven't ever seen any kind of volume on those. It has been really fun doing some flagship store installations, but we still haven’t done any hige rollouts for things like these. 

What about analytics? You mentioned how you're tying into store analytics for access control and so on. Is that being widely used now within retail, the idea that you can understand how the store works and how people are looking at screens and so on?

Anders Apelgren: Absolutely. First of all, we do a lot of research and even with new clients to understand what they do, but we also have all the things we show and load to put into a database, and then they can cross reference what we have been showing, like the sales of that item with the client to see what kind of images on the screen really drive the sales. 

How large is your company?

Anders Apelgren: We have around 100 employees. This year in 2022, our aim is to sell about $32 million. 

Okay, and what's going to be coming in the new year. Do you have big projects or new products that are coming out? 

Anders Apelgren: I think really the biggest thing is to market our very good software, even more in the world, to deploy it worldwide anywhere, and also to move into more countries. We’re quite aggressive about finding new countries. So I think we'll probably have at least four new countries this year. 

Now, will you do that through acquisition or just organically grow? 

Anders Apelgren: Organic is our main target. We can buy companies if we see anything good, but normally for us, we don't want to have some big company in this country, we mainly want just sales and a product leader. So most companies are too big to buy. I don't want to have really big foundations in every country. 

And are you privately held or venture backed? 

Anders Apelgren: 50% of the company is owned by employees in the company and the remaining 50% is owned by Ocean Outdoor out of the UK. 

Oh, okay. I did not know that. Interesting. So you have direct ties into digital out of home?

Anders Apelgren: We do, yeah.

And would they do media sales for you as well on certain projects?. 

Anders Apelgren: Absolutely. If you look at the ICA grocery stores in Sweden, we have all the screen installations and they are selling the advertising space. 

Oh, interesting. I don't think I've heard that with an integrator where they've had ownership through a media company. 

Anders Apelgren: It’s a good combination, I think.

Yeah. All right. It's been great chatting with you. Thank you very much. 

Anders Apelgren: Thank you very much.