6 Benefits of Electronic Shelf Labels and How ESLs Work

Illustration of shelves with products and electronic shelf labels

Traditionally, our retail stores have product labels printed for each unique item in the shop. These might be attached to the shelf above or below the product display, added to windows or other larger displays, or printed and tagged onto the item itself. But times are changing and there are some big benefits of electronic shelf labels. 

First, check out a brief history on how electronic shelf labels work. Then learn how your store can benefit from them – there are a lot more than most retailers think:

  • Cut labor costs
  • More environmentally friendly
  • Work with your eCommerce channel
  • Better communication with shoppers
  • In-store traffic insight
  • Optimized pricing
  • Promotional opportunities
  • Better inventory management

How Electronic Shelf Labels Work and a Brief History

This new style of in-store pricing originated in the early 90s by yet another Swedish retail genius. The technology company Pricer had the first electronic labels in stores by the mid-90s. These original ESLs used a liquid crystal display similar to that of a calculator. They were limited in the types of characters they could display, so were primarily used for only showing the price. It also took more time to upload the prices to the ESL, and they used infrared communication to transfer the data.

Later generations of technology used electronic paper or electronic ink. This gives the labels the effect of having an actual pen on ink. In addition to using infrared communication, this could be used with more modern and effective radio communication.

Modern electronic shelf labels use only e-paper displays and radio communication. And they can display a whole lot more than just the price. Plus, they also integrate with other modern retail devices – digital signs, foot traffic counters, camera surveillance, etc. – allowing you to gain a wealth of insight into your store’s performance. More on that later!

The Benefits of ESLs

  1. Show More Information
  2. ESLs Track Customer Movements and Patterns
  3. Save Paper and Plastic
  4. More Accurate and Save Employees Time
  5. Electronic Price Labels Help Prevent Showrooming
  6. Retailers Stay More Green and Reduce Inventory Loss

1. Show More Information

With more modern ESL technology, more information can be displayed on each label. This means that you can show a whole lot more than just the price.

You might also use your electronic shelf labels to display any of the following:

  • Additional product information
  • Nutritional facts
  • Size
  • Price per weight
  • Stock remaining

Retailers can add this to the main label itself or print a QR code that can be used to access the additional information through your store’s app or website. Plus, QR code marketing can help with promotions or sales.

2. ESLs Track Customer Movements and Patterns

Movement sensors can easily be installed in each electronic price label at a relatively low cost. These can track all customer movement and traffic around your store, providing you with a virtual heat map of your retail space.

Understanding your in-store traffic in more detail can assist you with product placement, promotional areas and displays, aisle layout, and more. Plus, you can also see how many people passed by a certain product but didn’t make the purchase. If you have a slow-moving product in a high-traffic area, it might be time to switch it out or change the price.

3. Save Paper and Plastic

Printing labels every time you change your price or need to replace a beat-up label is a big waste. This is particularly true for retailers that sell hundreds or thousands of different products. Paper and plastic product labels are expensive and add to more waste, something the world needs a whole lot less of, especially from the retail sector.

Adding electronic labels means that you only have to buy the labels once. Nothing is thrown out, and prices are always up to date.

4. More Accurate and Save Employees Time

Electronic pricing is easier to edit and always more accurate. Employees don’t need to waste their time making hundreds of small changes around the store. Such tedious work means that there will inevitably be mistakes in pricing around the store. Many retailers also offer products at the price that they’re listed instead of the actual price, so a small mistake can prove to be quite costly in the end.

Changes can be made en masse from the back-end. And mistakes can be fixed just as quickly, rather than require manual changes that leave room for the same thing to happen again. Your employees’ time is better spent helping your customers than tending to price labels.

5. Electronic Price Labels Help Prevent Showrooming

Perhaps the most innovative aspect of electronic shelf labels is that they can help your store prevent showrooming.

Showrooming is the phenomenon many brick and mortar retailers are currently facing where shoppers are browsing for items in store, but making the purchase online where they can find cheaper outlets. 

ESLs allow more dynamic pricing for retailers. As mentioned above, making changes to your prices is remarkably easy, so you can keep an eye on online prices and then quickly make any adjustments in your store.

This technology is new and only the largest retailers are currently playing with dynamic pricing. Some fear that it may drive shoppers away, too. But it’s an intriguing possibility and a glimpse into some of the future power than ESLs may provide.

6. Retailers Stay Greener and Reduce Inventory Loss

Likewise, quick changes to your prices can help you move through product more quickly. If you notice that a certain item isn’t moving, adjust the prices to see if anything changes. Adjusting your promotional pricing has never been easier, meaning that running promotions and getting rid of slow stock has also never been easier.

For retailers that sell perishable stock, this is even more important. 40% of food produced is wasted; cutting this down by using smarter pricing may make a huge difference. It saves both the retailer and consumer money, while helping to minimize waste.

There’s Still Room For Improvement

This technology is still new and it certainly comes with issues that must be addressed prior to implementing it into your store:

  • Battery life on the labels means that new batteries will have to be purchased and installed.
  • The ESLs use electricity that offsets some of the savings found elsewhere.
  • Screens are small and can’t display a large amount of information.
  • There are still many areas of retail operations in which it needs to integrate in order to run smoothly.
  • The near field communication that it relies on has a limited distance.
  • Costs of new labels is prohibitive for many small businesses.

But that doesn’t mean these problems won’t be improved upon in the near future. Like all new technology, there is rapid progress occurring every year (in this area and many other trends), and more and more business owners will begin to implement the new technology.

The Benefits of Electronic Shelf Labels

Get your store ready by always looking ahead and knowing the future of retail. There is new technology coming out every year and it’s worth keeping an eye on it even if you aren’t ready to change your store right away.

Let us know if you have more questions or to find out how these labels can work with your retail POS. It’s pretty cool. Click below to find out more.

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Written By

Michael Chalberg

Michael has long focused his writing on the world of retail and small businesses. He''s been a part of the KORONA POS team since 2018 and loves helping entrepreneurs find ways to adapt and succeed. In his spare time, you'll likely find him hiking somewhere in the Southwest.