The Growing Popularity of Electronic Shelf Labels at Retail

You may have seen these fancy, futuristic electronic shelf labels at your local grocery retailer, and for good reason. Electronic shelf labels offer several benefits, such as “real-time inventory management to more flexibility with promotions,” not to mention the hours saved by printing and handling thousands of manual labels. For one Mid-Western grocer, Schnucks Market, ESL (Electronic Shelf Labels) was a must after some firsthand experience. Schnucks regularly has their corporate technology team spend time working at store level. This has provided them a deeper understanding of the inner workings of retail and the laborious procedures taken to hang shelf takes throughout the entire store. As Dave Steck, VP of IT infrastructure and Application Fevelopment mentioned “We realized how much it sucked,” after the in-store experience.

Schnucks is now fully onboard with implementing the ESLs throughout the chain’s other locations. The ESLs will provide operational proficiencies, retail media offerings and allow store level employees more flexibility in their day for other tasks. The ESL movement is catching on with other retailers such as Kroger, Hy-Vee, Ahold Delhaize USA and Dom’s Kitchen & Market.  Technology at retail is expected to continue to grow and expand as labor costs rise. Although, with any innovation there comes challenges and growing pains. Some challenges to overcome have been battery life issues, and as new technologies emerge dealing with connectivity and reliable systems. Even with challenges, Anne Mezzanga who is CEO of retail blog Omni Talk mentioned “They tackle the big issue of changing prices and the loss that grocery retailers can experience when they don’t have accurate pricing on shelf,”

Responses from the handful of stores currently using the ESL system has been positive, encouraging the retailer to move forward with ESLs chainwide in the next two years, using Hanshows digital tags. Instacart’s Carrot Tag software currently uses Hanshows and SES-imagotag as their ESL provider.

James (Hyunseok) Jeong, who works for Solum Newton tags said, “ESLs can make stocking and e-commerce fulfillment faster and more efficient. Tags with LED lights on them can flash for pick-to-light and stock-to-light functionalities, helping people locate products more quickly, sources said. Solum’s Newton tag, for example, has seven LED lights, which workers could use to fulfill seven orders by assigning a different color to each one”. ESLs also allows customers to download coupons and in-store deals to their smartphones.

With these additional benefits, no wonder Neil Stern CEO of Good Food Holdings (owns banners such as Metropolitan Market, Bristol Farms, Lazy Acres and New Seasons) sees ESLs as a way to drive customers to products in store. Good Food Holdings has added ESLs, using SES-imagotag to a few Bristol Farms in California as well as Metropolitan Market in Seattle. While the added benefit of labor savings might not be enough for retailers to do the switch to ESLs, it should be noted that the updates in technology now offer ESLs as a pricing tool, inventory tool, as well as labor savings. Additionally, as Stern mentions looking in to the future, “You can envision a future where if I’m a shopper and I want gluten-free products, for example, I can have the shelf tags light up and just show me gluten-free. That’s an advanced capability.”

The implementation of ESLs, as we have seen, can assist with labor, in store inventory as well as customer engagement. Another positive outcome of ESLs is the sustainability aspect. With digital tags there is no need to print out paper tags and shelf talkers, cutting down on paper waste. Additionally, ESLs can help to cut down food waste by adjusting markdown pricing for products with short code dates. Marketing efforts also get a boost with ESL usage, as Schnucks executives called out ESLs can make it easier to run special promotions “You don’t have to follow your traditional ad cycles,” Hardester said, noting Friday Specials and daily happy hour deals become more feasible.” ESLs offer a wide range of benefits as the technology offerings expand and a creative, time saving option for retailers.