Why Retailers Are Turning to Electronic Shelf Labels

The idea of electronic shelf labels (ESLs) is not a new one, and the application of the concept has become fairly common in Europe. But U.S. grocers have been slow to the uptake for a variety of reasons, including a perceived low return on investment. This, however, may be about to change as ESLs evolve to perform tasks that go beyond a quicker price change.

Why Price Changes Matter
Despite ESLs’ new range of capabilities, easy price changes are still a major advantage not to be scoffed at, because there are grocers who are spending upwards of $10 million a year changing prices. To put it in perspective, staff tasked with changing price tags are often on the more senior level, making them some of the most expensive labor in the store. For retailers changing 5,000 to 12,000 tags a week, the labor cost really adds up.

Optimizing Inventory Management
In addition to labor costs and price competition, inventory management is a newer perk associated with ESLs. Out-of-stocks are a battle that retailers have been facing since the advent of grocery stores, with very few simple solutions in sight.

E-Commerce Applications
Grocery stores have gotten more crowded as e-commerce personal shoppers hunt for produce or sort through cheese selections beside the regular brick-and-mortar customers. This relatively new system can make things complicated, especially when there are often more than one or two personal shoppers working a store at the same time.

Reducing Waste
In addition to reducing energy consumption, the flexible pricing enabled by ESLs enables retailers to strategically price perishable items throughout the day, encouraging customers to buy them before they spoil. This freedom allows retailers to graduate pricing based on sales velocity and inventory levels.

For more information, please check the article in Winsight Grocery Business.