Are Digital Price Tags Worth the Hype?

If you haven’t already seen, digital price tags have debuted in UK supermarkets over the last month. Aldi and Lidl have pioneered the move, with retail experts claiming them to be ‘a game changer in retail’.

In this article from Allegro Logistics, we will look into what Digital Price tags are and their applications throughout the retail and logistics industry.

What are Digital Price Tags?

Digital Price Tags or Electronic Shelf Labels (ESLs) are a form of ePOS, electronic Point of Sale, they have small digital displays that are placed on shelves in supermarkets and retail outlets and display the price of the products; instead of the conventional stickers or paper labels that can be used.

They have been in around for many years but have seen a massive growth in popularity in recent times as improvement in manufacturing and development has reduced the costs of these items making them more accessible and feasible for businesses.

These electronic shelf labels are connected to a store’s digital inventory, displaying real time updates to customers about the lowest price available and the quantity available. No more ‘have you got any of this out the back?’

They have a range of uses in both retail spaces and logistics warehouses to improve efficiency and minimise costs.

Read more about POS in our ultimate guide >

What are the Benefits of Electronic Labels?

Electronic labels offer businesses and customers far more benefits than paper or sticker alternatives:

Dynamic Pricing – Businesses can quickly respond to price changes of goods. All they need to do is update their database and then this information propagates across the network and can update across all labels within a matter of minutes (Depending on the size of the business). Allowing customers to have the most up to date price and the best value.

Save on Long Term Costs – if businesses are not having to change the price labels constantly, they can save money on printing new labels and having staff change the labels. Instead, businesses can have the staff working on more profitable activities such as product replenishment or serving customers.

Integrated Logistics – Inventory management is a critical practice for all retailers. The ESLs can be integrated with a company’s shipping schedule; to display the next delivery date for out-of-stock products or offer the next best alternatives with their dynamic content capabilities.

Advanced Capabilities – As technology advances more and more, manufactures are adding in additional capabilities for their ESLs including:

Product Finding – Retailer can link their ESLs with additional third-party applications to help colleagues and customers to find products. All they would need to do is to enter the product they were looking for the app would guide them to its location. This can be paired with alerts that can sound when the user is close to the product.

Habit Tracking – Some manufacturers are placing motion sensors inside of their ESLs this allows retailers to see how their customers act in their store. Analysing where most customers spend their time browsing. Where do most customers end up congregating. This can help businesses to improve the layout and offerings in their stores to improve the customer experience.

Environment Tracking – Including sensors to record the temperature and humidity around perishable products can be an extra line of defence for businesses. They can ensure their products are being kept in the right conditions, ensuring the safety of customers and their products.  This will help to minimise wastage of perishable items.

What are the disadvantages of Electronic Shelf labels?

Propagation Errors – As mentioned above, when there is an update on the main system, the change is propagated across the labels updating as needed. However, this opens businesses open to vulnerabilities. If an error is sent out, this error will affect every label within the business. Meaning that should a price be sent out too low, all sales of that product will be at the reduced rate. Similarly, if there is a system outage, all of the labels will be redundant. Causing major disruption to businesses and customers.

Set up and Maintenance – As with most things digital, the initial set up costs of ESLs are likely to be higher than their paper alternatives. Especially for larger businesses operating across multiple sites.

With many ESL products starting from $6 or £5, businesses can easily see the initial set up of the labels running into the thousands of pounds per site.

Businesses also need to account for wear and tear on the labels, as well as regular maintenance including software updates

Inaccurate ROI – Because of the increased cost and many of the benefits being for future use, calculating the return on investment will be incredibly difficult for businesses. Knowing the value that they would have otherwise lost because of the electronic labels would be near impossible to calculate.

Point of Sale Fulfilment and Distribution with Allegro Logistics

For us, Electronic Shelf Labels are definitely worth the hype! They offer larger businesses greater flexibility and control in managing their prices across multiple sites. They are a brilliant choice for smaller businesses, but they have less benefits on a smaller scale, yet.

Here at Allegro Logistics, we are partners of growth. Our family business background ensures there is a friendly face to online, automated systems. Our constant investment in technology and industry leading solutions ensures we consistently deliver a professional, optimised service. As the industry transitions from old-fashioned logistics to contemporary online fulfilment, we adapt to remain leading providers.

Get in touch today to see how we can help you >

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