Electronic Shelf Labels and Your Retail Business

18 June 2024

Worldwide, the Electronic Shelf Labels (ESL) market has grown 436% since 2022 and is tipped to reach a staggering 5.9 billion USD by 2030. For a technology concept that dates back to the 90s, we’re seeing an incredible rise to the top of the retail tech wish list.

Record numbers of retailers are looking to adopt ESL to simplify their in-store processes, boost revenue and improve the in-store customer experience, but could it be right for your business? We’re here to tell you all you need to know about this thriving technology and help you understand the fit for your retail business.

Before we dive in, let’s explore what ESLs are…

What are Electronic Shelf Labels?

If you’ve attended any retail technology exhibitions this year, you’ll no doubt have been struck by the sheer number of ESL manufacturers in attendance. These battery-powered labels are quickly creeping into your local supermarkets to replace paper labels in-store.

What you might not know is just how many sizes of ESLs are available with options ranging from 1.6” to 12.2”. Attaching to the shelf edge, there is also a range of mounts available to suit your existing store infrastructure. Each ESL can store multiple label formats and with a sealed screen that prevents colour fade, a battery that lasts up to 10 years, and resistance to shocks, water and dust, they offer a long-lasting labelling solution.

Sounds great, doesn’t it? So why is it only now we’re seeing the meteoric rise of ESLs in the market? There are a few reasons for this, with the key ones being:

1. Improved technology and quality

First-generation ESLs used a technology similar to the display of a calculator, but today this has evolved to use e-paper technology which mimics the look of ink on paper – think Kindle Paperwhite, but in more colours. The result? A more dynamic display.

More than this, in the last 30 years there have been significant improvements in tech. Improved battery performance delivers a long-lasting solution and greater functionality can now be found in ESLs meaning retailers can reap even more rewards from the investment.

2. More accessible pricing

The cost of implementation has been the biggest barrier to ESL adoption until now. Major rollouts in grocers across the UK including Aldi, Lidl and Morrisons, as well as large deployments abroad have driven down the price of the hardware. This makes ESL more accessible to retailers, with some retailers seeing a payback within 18-24 months.

3. The complex labour market

Despite a slight ease in the UK labour market, retailers still face a tough time with profits squeezed, a rise in the minimum wage, and greater competition to attract and retain staff.

Consider this alongside the growing role of the store colleagues and rising consumer expectations, and you’ll see the need to do more but with fewer people. Technology innovation often drives efficiency and ESL does just that, allowing store colleagues to focus on customer-facing activities rather than spend time on laborious operational tasks all while helping to increase staff retention.

4. A changing competitive landscape

Competition in retail is notoriously high and as the landscape continues to evolve, gaining a competitive edge is fundamental to success. There is a real need for retailers to be able to react fast and for greater pricing flexibility to keep pace with their competitors.

Technology empowers retailers to respond at speed, able to turn promotions on and off in an instant. Localised decisions can even be driven by AI at the store level instead of relying on a single one-size-fits-all approach.

How could digitising labels benefit your business?

ESLs digitise your in-store pricing meaning regular price changes, price markdowns and clearance can be automated. Promotional changes can also be scheduled to deploy at a given time on a given day as often as you need or want; this offers global business benefits enabling retailers to coordinate deployments across multiple time zones.

With greater pricing control, store-based pricing that is out of reach working to a traditional pricing model can be supported. There’s even the potential to react to market changes with dynamic pricing and build events into your pricing strategy with surge pricing.

The benefits here are obvious: significant time savings and fast deployment maximise your revenue and profit opportunity. On top of this, pricing accuracy is boosted preventing margin erosion and supporting bottom-line growth.

Add more value, enrich your labels

ESLs offer the potential to show much more than just pricing. Improve the customer experience by enriching your labels with enhanced product details, inventory levels, warranty information and even customer ratings.

You can direct customers to product-related content such as training videos, safety information or a website, and promote reviews using ‘scan to view’ QR codes. You can even enable self-checkout, and support discount vouchers and loyalty programmes with built-in NFC capabilities.

Achieve even more with ESL

More than just labelling, the functionality built-in to ESLs opens up many more opportunities that can be leveraged in-store. We’re particularly excited by what can be achieved using the programmable buttons with customisable coloured LED lights to, for example, simplify more store tasks and improve the customer experience with:

  • Gap Checking: Report stock gaps at the press of a button
  • Shelf Replenishment: Identify where more stock is needed fast
  • Order Picking: Speed up the process with ‘pick to light’
  • Product Locator: Light up the product a customer is searching for
  • Product Selection: Highlighting best sellers or relevant products to support decision-making

Is ESL right for your retail business?

There is a huge amount of interest in ESL right now, and it’s clear to see why. But that doesn’t mean that ESL is the right answer for every retailer. Several factors will affect this, and we find a good starting point for conversations about ESL is by answering these questions:

  • How much do you currently spend on paper labels?
  • How much time do store colleagues spend on pricing tasks i.e. full price, price changes, clearance and promotions?
  • How long do price-checking tasks take store colleagues?
  • How much does inaccurate pricing cost your business?
  • What is the cost to your business of being unable to act on price changes?
  • What is the sales and margin gain of 100% accurate pricing?

Understanding your costs x frequency x number of stores helps quantify your current investment and calculate potential ROI from ESL to build a business case. This simple calculation is a good indicator but doesn’t represent the full picture as it only considers price tasks currently completed by the retailer.

When you factor in the ability to roll out promotions more often, being able to react to current sales performance, and the scope to improve or introduce new ways of working beyond pricing tasks, the return will be magnified.

ESLs and TPP Retail

We’ve closely watched the development of ESL over the last 12 months having recognised the value beyond price management that ESL offers. While a full-scale ESL deployment is best, taking a hybrid approach is also an option to work in harmony with existing paper-based labelling.

Setting to work on bringing this vision to life, at the Retail Technology Show in April we launched the support of ESL within our market-leading solution – Label IQ. Empowering retailers to reap the benefit of ESL and leverage its power on their in-store devices, we’re already working with several national retailers supporting their ESL journey.

Interested to learn more about ESL and how your retail business could benefit? We have a wealth of knowledge ready to share and are here to support your ESL implementation from site survey to set-up, data integration to installation.

Get in touch with our expert team and let us help move you closer to your technology goals.

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