One of the most exciting trends in retail customer experience is to provide a phygital experience. No, that isn't a typo but a way of describing a hybrid experience that makes the most of the benefits of physical and digital experiences. Merchants seek to combine the advantages of the digital realm, such as better product information and engaging user displays, with the convenience and experience of being in-store.
Digital shelf labels and electronic price tags are examples of this kind of retail technology. As we will see, not only can they enhance customer experience, but benefits for businesses also include:
- Reduced labor
- Increased price accuracy
- The ability to communicate more information beyond price
- Reduced paper and ink resources
What are digital shelf labels?
Digital shelf labels display product prices digitally, i.e., an electronic price tag replaces the more familiar plastic or paper tags displayed underneath store items. Electronic shelf labels use electronic or liquid crystal paper to display information on a screen connected with the retailer's network to coordinate the prices on the shelf with point of sale (POS) devices at checkout. The labels can be updated automatically, thousands at a time across various channels, rather than rely on a store employee to physically print and walk the store to switch out prices.
An electronic price tag can tell the consumer much more than how much an item costs. It can offer more details about each item that allows the customer to compare between brands, such as the nutritional information of grocery items. It can also display supply chain information, including the total number of items in stock.
Acceptance of digital shelf labels in retail
The retail industry appears to be adopting the electronic price tag. It is expected that by 2028, digital shelf labels will be a $2.47 billion market, according to research by Meticulous Research, with a growth rate of more than 20% in a six-year period.
A recent study conducted by Incisiv on behalf of Verizon found that up to 26% of grocers and general merchandisers and up to 11% of specialty and department stores are expected to have the capability to use electronic shelf labels by the end of 2023.
Benefits of deploying digital shelf labels and electronic price tags
Among the benefits retailers may see when they make the switch electronic shelf labels include:
- Reduced labor. In-store retail has been one of the hardest-hit sectors by recent labor shortages, with customer-facing roles being the hardest to fill. Electronic price tags remove the need for staff to manually change priced labels, removing a tedious role from staff duties. This not only helps reduce labor costs but also helps with the morale of existing staff, who can focus on interacting with customers or other tasks.
- Accurate and dynamic pricing. No customer wants to find an incorrect price on a product, especially on advertised sale items. Electronic price tags help ensure accurate prices at all times. Dynamic pricing provides the opportunity to adjust prices to capitalize on demand or lower prices to increase sales and get products moving. It also provides data on customer behavior patterns by accurately displaying the price range customers are willing to pay for certain products. Businesses with multiple locations will also be able to more easily change prices based on location-specific factors.
- Communicating product information. Customers want to make informed purchases, and that includes a range of information from the number of calories in a serving of the 10 different cans of chicken noodle soup for sale to knowing if the bottle of vodka was made in Russia or Sweden. In an era of supply chain uncertainty, being able to tell customers when a product is due in stock is also beneficial and can help promote customer loyalty.
- Reduced use of paper and ink. For organizations that want to go paperless, digital shelf tags decrease the need for paper, ink, and printing, and also reduce the risk of incorrect pricing information.
Next steps
Digital shelf labels are just the beginning of retail's digital transformation, and the technology itself continues to improve.
Moving beyond prices and item information on a store shelf, technology like Cooler Screens give customers more details about the drinks and food items inside coolers in convenience and grocery stores. Not only do the screens offer basic information about the products, but they also offer rolling advertisements and sense customer movement by the doors.
Along with digital price tags, QR codes and other technologies can be used to engage consumers and build the customer experience and improve supply chain operations. QR codes tied to unique cloud identities can alert the need for more production of that product or trigger a store order. At the same time, the QR codes provide brand and item information to the customer.
Most importantly, the digital transformation in retail "future proofs" the store. It sets up a streamlined supply chain and pricing process to protect the retailer from future situations like another pandemic or staffing shortage while offering customers many of the benefits they've come to enjoy in their online shopping experience.
Learn more about how automated retail solutions like digital shelf labels combine online shopping convenience with the gratification of an in-store purchase.
The author of this content is a paid contributor for Verizon.