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Making The Business Case for Electronic Shelf Labels

Tuesday, November 12, 2019 By Yudi Levine

Electronic shelf labels (ESLs) have been widely used in Europe for nearly two decades. They have not been as popular in the U.S, but several major retailers including Kohl’s and Home Depot have recognized their value and implemented ESLs in the past few years.
At its core, an ESL is similar to a printed shelf label you would see in a retail store, except it utilizes an electronic display instead of paper to provide price and item information. That display can then be dynamically updated/changed from a central server.
The capabilities of electronic shelf labels make them far more than a new technology “fad” or stores trying to be “hip.” The reality is they are a game changer for brick and mortar with a strong business case and a plethora of benefits. In fact, electronic shelf labels can both create an engaging experience for the customer while increasing profits
But how?
Electronic shelf labels save time and reduce costs.
Two major benefits of electronic shelf labels are their instantaneous update capabilities and reduced operating costs.
Let’s take the grocery sector as an example, imagine you sell milk at $2.99 a gallon. People come in to buy their milk and life is good. But then, the big store down the block cuts their price to $2.19 a gallon, and now suddenly no one wants to buy milk from you. You would love to price match, but by the time you get the new labels printed and on the shelf, your customers have already gone to your competitor.
That’s where electronic shelf labels come into play – by simply clicking a button on your computer, you can seamlessly adjust the display price on your shelf. In an era where brick and mortar stores struggle to keep up with both the instantaneous pricing capabilities of online sites, as well as each other, ESLs give retailers the ability to stay competitive in real time.
In the words of John Marenas of SoluM, “Retailers fighting for survival against Amazon, pure play merchants and the ongoing wave of innovative disruptive business models cannot sit still and also survive. IoT is the answer to identifying and realizing major gains in sales, margins, and net profits. For a large chain, labor and other cost savings combined with higher sales and margins typically exceed tens of millions or billions of dollars. And that is just one area of the business. No retailer today can afford to miss out on these and other IoT-driven real-time opportunities.”
Additionally, controlling all store prices from a centralized location increases price accuracy and eliminates the risk of human error.
So, does this mean that we are replacing our workers with computers?
On the contrary, ESLs enable task redistribution and efficiency within your workforce.
Let’s talk about Jake. Jake is a friendly guy who enjoys engaging with customers, answering any questions they might have, and staying positive to ensure all shoppers have a positive experience. Unfortunately, Jake spends most of his day removing old shelf labels, printing new ones and applying them to the shelves. He hardly gets a chance to talk to anyone. If Jake’s company would implement electronic shelf labels, he would be free improve customer connections and overall experience. ESLs remove time consuming jobs, giving you the ability to relocate your skilled workforce.
Beyond that, ESLs provide a clean and modern look for your store as well as cut back on waste, benefiting both your brand’s look and sustainability initiatives.
While ESLs have many benefits to store owners and managers, customers love them as well.
Connected stores are the way of the future, and shelf labels sit right at the heart of it. Electronic shelf labels can display far more information than just pricing, such as promos, reviews, stock levels, and competitor pricing. Additionally, they can be connected to an app, helping customers find the product they are looking for by guiding them through the store. Meaning, if you were shopping and wanted to find microwavable green peas, you could type that into the app and you phone would show you where to go. And, that’s pretty cool.


 Key Drivers for Electronic Shelf Labels
  • Reduce the labor of manual price changes
  • Avoid paper cost for paper labels
  • Reduce Cost of Section Work associated with bar code scans using NFC
  • Reduce Store Level Price Audit Labor
  • Avoid Price Inaccuracy fines
  • Revenue increase from Precision Pricing
  • Revenue increase from more effective promotions
  • Increase in online sales as a result of enabling price competition

Are you considering electronic shelf labels?
Early adopters in the U.S. are seeing tremendous ROI from the ability to change prices quickly and accurately, reallocate labor and improve customer experience - all while looking sleek and sustainable.
We’ve partnered with some of the leading manufacturers of ESLs and explored which solutions work best for which industries. Reach out to our controls team at hello@illumetek.com and they’d be happy to share what they’ve learned.


Filed under: Digital, Retail, Trends

About Illumetek

Illumetek is a National Program Management company facilitating installs, updates, compliance and rebates for Lighting, Electrical, and associated Controls. If you have additional questions regarding LED lighting technology or design, please feel free to contact us anytime.

Reach out to Illumetek

Illumetek is a National Program Management company facilitating installs, updates, compliance and rebates for Lighting, Electrical, and associated Controls. Contact us today!