Are U.S. Grocery Stores Ready for Electronic Shelf Labels?

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Are U.S. Grocery Stores Ready for Electronic Shelf Labels?

By John Karolefski - 11/10/2016

Like most grocery aficionados, I visit local supermarkets in European cities whenever I travel there on business or vacation. I want to see how they differ from American grocery stores. More specifically, I look for shopper-facing technology.

In Venice, I once visited a mid-sized supermarket called Punto Simply Market where Electronic Shelf Labels (ESLs) hung on shelves on front of the packaged goods throughout the center store. The same was true in a small grocery store in Aix-en-Provence in France. On a larger scale, French retail chains such as Carrefour and Casino have deployed ESLs in their stores for years.

The most prominent vendor of ESLs is Pricer, a Stockholm-based firm, which has installed more than 140 million digital tags in 15,000 stores in grocery, DIY and electronic channels in 50 countries. Most recently, Compañia Hasar, one of Argentina’s largest grocery chains, opted to install Pricer ESLs in all its hypermarkets.

These digital tags help grocers save time with automatic price updates rather than having store associates change paper tags when a new price is called for. I assume shoppers appreciate what they perceive to be accurate, reliable pricing. At the very least, ESLs give the store a sophisticated look that is equipped for 21st century retailing.

Other benefits beyond pricing:

  • Fewer Expired Products: Labels can monitor when products are almost out of date and need to be replaced or discounted.
  • Fewer Out of Stocks: Digital displays can indicate when shelves are empty.
  • Planogram Compliance: Symbols on ESLs can notify store associates where misplaced products fit into the original planogram.

Grocers around the world are enjoying these benefits for store performance, coupled with an improved shopper experience. In the United States, ESLs have been talked about for a long time, and while a few pilots have been staged over the years, no widespread deployment has taken place. That may change soon.

In Kroger’s 55,000 sq. ft. supermarket in Cold Spring, Kentucky, 10 miles southeast of Cincinnati, the country’s largest traditional grocer last year outfitted the center store with “smart shelves” in the form of small rectangular tags that display digital prices and ads. This test may evolve with the tags being able to provide nutritional information, motion video, as well as communicate with a shopper’s smartphone.

Leaders lead, and the eyes of the industry surely are on this test. When Kroger expands ESLs widely, grocers will take notice and react.

More recently, Fresh Formats LLC, a division of Zaandam, Netherlands-based Ahold Delhaize, deployed ESLs in bfresh, a single store in Allston, Mass. The small-store format targets urban shoppers looking for fresh, healthy food options. Future bfresh units will have ESLs, provided by Pricer.

As the song goes, this could be the start of something big.