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What are Electronic Shelf Labelling and the top 10 use in Retail?

Updated: Jan 22, 2023

Retail is reaching a tipping point as digital and physical purchase channels converge and as shopper demands change. 60% to 70% of consumers expect digital product content throughout their shopping experiences, and shoppers are looking for more to earn their loyalty. Adaptive and evolving brands and retailers will not just survive but thrive.

As the Future of Retail takes shape, traditional brick-and-mortar stores face a new challenging problem: adapt to satisfy the needs of the next generation of consumers and compete with e-commerce platforms or become a thing of the past of past generations' consumption habits.

We are changing our shopping habits. Surely you have experienced or heard that your community members search online for coupons before they step up to the checkout, use their phones to compare competitor prices while in a store, or buy online and pick up in-store. This is just one example of how the e-commerce world on the internet is influencing the retail world on the ground.

Physical retailers and brands that rely on brick-and-mortar channels are making significant investments to keep up with the pace of digital innovation and shifting shopping behaviours. With more product content available than ever before, increased competition for brand loyalty, and an ever-increasing rate of change, new shelf technologies are being applied to:

  • For improved shopper experiences, combine the best of digital and physical shopping.

  • Give brands insight into shopper behaviour at the shelf, where 85 per cent of transactions take place.

  • Give merchants a more agile platform for delivering real-time pricing and product information.

What is the change inside the retail store?

Can you imagine a local grocery store retailer adjusting the prices of products for a happy hour deal with the click of a mouse, and then reverting to normal prices with a second click? It's quite difficult to believe! However, it is not difficult to believe because retailers are adopting IoT technologies to do so.

Many countries' global retailers have implemented this new-generation technology for improved price management. In India, we are witnessing a change, and many retailers are in the process of evaluating the Electronic Shelf Labeling (ESL) technology, which has gained popularity in developed countries.

ESL is a modern technique that retailers use to display product pricing on shelves that are affixed to the front edge of retail shelving. ESL units are typically small, credit-card-sized devices that are used to replace traditional paper shelf labels or individual sticker pricing. The ESL technique uses digital paper devices to replace paper shelf labels at the retailer's shelf edge.

Every week, thousands of paper shelf labels need to be changed, a task that is both time-consuming and costly. The price changes are always subject to error because they are made manually, and the process is time-consuming and inconvenient. To increase their productivity and profitability, retailers have to compete in today's competitive market.

So, they have begun to focus on both the pricing function and the purchasing function to achieve better management. Changing this direction will be detrimental to paper shelf labels.

Stores need a sophisticated look to fit their image when frequent promotions or price changes are available, or when large numbers of SKUs are managed.

In comparison with paper labels, ESL offers several advantages. One of the advantages of ESL over paper labelling is that it is a wireless, paperless, accurate technology. Using this system, retailers can update pricing instantly on shelves and checkout stands of one or more stores, enabling them to run real-time promotions like a regular price, a promotional price, comparative shopping, promotional information, and so on. Increased sales and lower overall operating expenses result from this action, resulting in additional impulse purchases from customers.

What is Electronic Shelf Labeling (ESL)?

Electronic shelf labels, commonly referred to as digital price tags, are digital wireless display systems used in retail businesses to display product pricing. ESLs are typically affixed to the front edge of store shelves.

When you install ESL on your shelves, it will be instantly linked to your store's ERP and POS, reducing price management labour expenses, improving pricing accuracy, and enabling dynamic pricing.

Why should you use ESL?

Aside from driving sales and engagement, some IoT-enabled shelves can keep track of goods stock and quality. Furthermore, these labels are capable of much more than simply communicating contents and genetic information.

Shoppers who are involved in a company's customer loyalty programme and have their app downloaded may be treated to a tailored experience in-store in some situations. When you approach, a smart shelf will come to life with customised information. Besides the above-mentioned advantages, below is the different top 12 use of ESL on retail store shelves.

Top 12 use of Electronic Shelf Labe in Retail

Offer additional information

Paper labels often solely display the product's price. Electronic shelf labels now have the capacity to display a broader range of information while maintaining excellent readability. Nutritional information, item size, price per weight, stock remaining, and other aspects can all be displayed using ESLs.

These not only benefit clients, but they also assist personnel in providing more precise advice to customers. With 75 per cent of purchasing choices being made at the shelf edge, why risk losing a sale by providing insufficient product information?

Personalize shopping experiences

QR codes are one type of supplementary information that ESLs can display. These let users interact with a product further by adding it to a wishlist, viewing consumer reviews, sharing it on social media, or saving it to order online later. This second element also allows ESLs to actively participate in an omnichannel purchasing experience, allowing customers to access your company's products long after they've left a physical store.

60 per cent of consumers say they are more inclined to buy a product in-store if they can immediately access product information digitally, which ESLs enable.

Eliminate showrooming

Consumers are increasingly engaging in showrooming, a technique in which things are evaluated in physical locations before being purchased online (usually at a cheaper price).

ESLs enable shops to simply alter the price of their products based on competitors' and online outlets' current retail prices, enabling in-store dynamic pricing. Even if clients on your premises search the internet, they will only see pricing that is similar to yours, increasing the likelihood of an on-the-spot purchase.

Increase accuracy

Paper product labels are frequently lost, shifted by customers, or simply display out-of-date information. ESLs increase label accuracy by 90-95 per cent through two processes: first, because they are affixed to the shelf, they cannot go missing in the same manner that paper labels do.

Second, ESLs display up-to-date, accurate information for every single product since prices and information is sent to the electronic label from a centralised source.

Improve employee productivity by optimizing their hours

It's understandable that an employee might make mistakes while updating hundreds, if not thousands, of labels. This activity reduces labelling accuracy and is time-consuming, necessitating hours of additional labour. When product labels can be updated via a centralised digital system, much of this labour is avoided, freeing up workers to work on other tasks or actively serve consumers.

Reduce waste

Many modern organizations have made it a priority to reduce waste in all forms, including paper and plastic. One simple method to accomplish this is to eliminate the need to manufacture paper labels continually. It may not appear to be much, but the printing of hundreds of thousands of labels quickly adds up.

Examine foot traffic

ESLs equipped with movement sensors can assist you in tracking customer flow throughout your store. These clever add-ons can assist create a virtual heatmap of your commercial area, displaying where you have more or less foot traffic. This information can be used to inform product and promotional placements, as well as to determine if products are priced competitively and in the proper areas. If a product is not selling well in a high-traffic area, additional techniques can be used to increase sales.

Increase your sales

Overall, ESLs enhance turnover, which is likely due to a combination of the benefits listed above. According to statistics, when ESL is used in stores, sales improve by 6-10 per cent. This is not only advantageous to your company but also evidence that ESLs provide a seamless and pleasurable experience for customers.

Improve Your Omnichannel Presence

ESLs improve your omnichannel presence by allowing you to communicate with your customers in a variety of ways, including:

  • Displaying stock levels – notifying clients if supplies are restricted

  • Displaying competitors' online prices — provides credibility when you claim to have the best deal.

  • Using QR codes to enable ordering - clients can order from your online store when your physical shelf runs out of stock.

  • Display product reviews - allows shoppers to learn what other people like and hate about a product.

Inventory Management Made Easier

Inventory information is also made digital using digital shelf labels. Your store's staff will be able to better discover where merchandise needs to go, which will improve replenishment and returns. ESL may also connect your inventory data to your online store, allowing you to handle order fulfilment from the website of your store.

Management of Perishability

Expiration dates on products can be difficult to spot at times. Electronic displays can assist customers in determining the sell-by date of a product in the store. It also allows the product manager to immediately put discounts on products at the conclusion of the consumption period and adjust the pricing automatically. This enables the manager, for example, to select to automate the presentation of 50% discounts for items that are 48 hours away from expiration.

Expiration dates, pricing, and discounts are shown and automated, resulting in improved inventory management and higher customer satisfaction.

Faster Picking and Putting at the store

With Pick-by-Light technology, you can halve your picking time and improve your accuracy by 95%. It can display 3-5 pages of information that can be flipped using the interactive buttons, which make it highly visible and interactive.

Using a combination of blinking colour LEDs and interactive buttons, along with the user-friendly mobile application, operators can locate and track all products on a digital map. The location of all goods on their list can be viewed, movement optimized, and workers can operate efficiently even in vast distribution centres.

Let’s Wrap up

Electronic shelf labels are anticipated to be the next step in the retail digitization movement. DXSolution can assist you in integrating them into your business, allowing all types of endpoints to communicate with your store.

Normally, ESLs would communicate with an ERP. Your ESLs can link directly with the integration, allowing for real-time information updates across all channels. This provides customers with the omnichannel experience mentioned above, as well as ensures that product information between your centralised shop and the ESLs is always consistent and up to date.

It is about linking retail and online to create an innovative omnichannel experience. And the shelf edge is no different. Retailers should carefully analyse this critical point in the omnichannel buyer's journey and acknowledge that electronic shelf labelling is one of the most straightforward ways to connect the two worlds.

Do you want to know more? Connect us right now, and get a free consultation. You can follow our LinkedIn page and our hashtag - #dxsolutionadvisor, on LinkedIn.

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