Electronic Shelf Labels vs. Traditional Price Labels: A Comparative Analysis

Customers who visit brick-and-mortar stores want the best retail has to offer. From clearly identifiable products to flawless pricing accuracy and engaging environments, anything less than perfection in efficiency leads to frustration. But do shoppers value what the traditional gold standard, or do they prefer to see retailers innovate, and integrate new technology solutions? Electronic Shelf Labels (ESLs) versus Traditional paper pricing labels: Let’s explore the characteristics of both.

The Rise of Electronic Shelf Labels: Transforming Retail Pricing Strategies

Electronic Shelf Labels (ESLs), often referred to as digital price tags, have become the modern counterpart to the traditional paper price tags still found in many retail stores. This advancement utilizes the same footprint as a traditional paper tag, but introduces the use of a digital screen and WiFi or BLE connection, enabling store managers to swiftly update pricing and product information in seconds. So, in the “ESLs vs. traditional price tags” battle, how does digital labeling significantly enhance a retailers pricing strategy? Let’s dive in.

What Sets Electronic Shelf Labels Apart?

From the retailer’s perspective, choosing ESLs vs. traditional paper tags means leveraging the potential of a paperless, digitally connected solution, unlocking:

• Real-time price updates, agile pricing and special promotions;
• The flexibility of automation based on pre-set thresholds;
• Sustainability impact by managing paper waste;
• Cost savings through operational efficiency and more effective labor management of value added tasks;
• A boost in customer engagement through an interactive display solution that showcases reliable pricing information, product details, promotions, and more.

The Technology Powering Electronic Shelf Labels

These devices use wireless communication to display information at the shelf edge, connecting to systems like POS and ERP for instant updates on product details and pricing. ESLs employ various wireless technologies, such as Bluetooth, Wi-Fi, NFC, and RFID, each enhancing the price labels functionalities in its own way. ESLs also feature low-energy e-paper displays and can include colors, LCD screens, and LED lights.

Seamless Integration with Retail Ecosystems

The seamless integration of ESL technology with traditional retail environments is one of the major benefits of Digital Shelf Labels. Since it doesn’t require a complete POS overhaul or an all-or-nothing approach, it can be implemented in stages, giving store managers enough time to adjust their strategy. This includes integration capabilities with all the top providers in the POS space, such as Aruba, Meraki, Cisco, SAP, and others.

Enhancing Customer Experience Through Accurate Pricing

Accuracy, transparency, and clarity are significant in overall customer satisfaction, affecting customer loyalty to a store. This is why selecting a pricing solution that positively impacts these elements can make a big difference in profitability.

The Trust Factor: How Consistent Pricing Influences Customer Loyalty

Customers can be significantly frustrated when the prices at checkout differ from those displayed on the shelves. This discrepancy causes irritation and can also give the impression that the store is attempting to manipulate price tags to serve its interests at the consumer’s expense.

By implementing ESL, retailers can enhance transparency and maintain customer trust. This will ultimately lead to a more seamless shopping experience and reduce the chances of misunderstandings regarding pricing.

Addressing Traditional Label Limitations and Consumer Frustrations

In addition to being a source of inaccuracy, paper labels distract staff members from their primary role: customer service. Implementing digital pricing solutions frees up employee time and minimizes scenarios where an associate who is busy replacing labels cannot appropriately address a customer’s concern. With more attention on their in-store experience, customers feel more valued, thus increasing their loyalty. 

Traditional Price Labels: An Outmoded Approach

Why are more and more retailers moving over to ESLs vs. traditional price labels? It is becoming evident the latter is an intrinsically flawed solution. Although it was the working standard for many years, the alternative digital option simply works better, faster, and creates a technological foundation for future advancements that paper tags cannot provide.

The Basics of Traditional Labeling Methods

Labels serve three main functions in the retail industry:

•   They provide information regarding products, their prices, ingredients, and usage instructions, helping customers make informed decisions.
•   They help retailers keep track of their inventory.
•   They improve customer satisfaction by ensuring informational accuracy.

When an issue arises with one of these elements, the consequences on sales are immediate and severe.

Operational Workflow and Update Challenges

Paper labeling involves printing paper labels and placing them on the shelf edges in front of the corresponding products. This implies perfect coordination between pricing decisions, inventory management, and staff availability. Further, it requires proper communication and allocation of staff resources to ensure labels are replaced as needed throughout the store to reflect the database’s most recent information.

The Hidden Costs of Manual Processes

Paper labeling is a labor-intensive, error-prone process that is, by definition, incompatible with real-time synchronization. Staff members must swap labels out by hand every time the information is modified, taking up valuable time that could be used for higher-value tasks. Similarly, any pricing error or discrepancy can take significant time to identify and fix, potentially confusing customers. All these operations come at a cost.

Accuracy and Efficiency: Where ESLs Outperform

When looking at how digital solutions benefits retailers, we must also look at their purpose: To fix the issues perpetuated by traditional models. To specifically address the inefficiencies of paper labels, ESLs can:

• Reduce Pricing Errors and Inaccuracies
• Allow for flexibility with real-time adjustments
• Give more time back to associates

Reducing Pricing Errors with Automation

Most pricing errors are due to the nature of the traditional labeling process. The issue comes from the multiple steps and individuals involved, from determining prices to printing labels, checking inventories, and placing the labels on the correct shelves at the right time. The operation is time-consuming, and various elements (such as prices or product availability) are subject to change, rendering the information obsolete and creating discrepancies that could confuse or frustrate customers.

Automated systems make it possible to centralize all these tasks, thus saving time and minimizing potential errors.

Real-Time Price Adjustments and Flexibility

What differentiates ESLs from traditional price labels is their ability to adjust prices in real-time as the database is updated. ESL systems utilize AI and advanced analytics to help retailers optimize stock levels and reassess prices based on demand patterns. Since the labels are updated remotely and without human input, prices can be modified as frequently as needed.

Case Studies: Efficiency Gains with ESL Implementation

The revolution of digital price displays in supermarkets is reshaping the industry. Our customer success stories speak for themselves:

•   VusionGroup’s IoT solutions are boosting efficiency and customer engagement at Lee’s Discount Liquor, Nevada, United States. Digital labeling helped make price updates easier and faster in their stores while ensuring product information integrity.
•   At Conad Superstore in Sorbolo, VusionGroup deployed the inventory management system Captana, complete with 100 shelf cameras. Implementing the system increased decision-making efficiency and helped the store manage priorities for improved customer satisfaction.
•   POCO store in Mannheim, Germany, was facing the constant challenge of maintaining accurate prices and promotions over their 8,000+ square-meter retail space. Switching to ESLs from traditional price labels allowed them to overhaul their pricing strategy and liberate POCO associates to focus on delivering outstanding customer service and efficient inventory management.

Cost Effectiveness and Labor Impact: A Detailed Comparison

ROI is a critical concept in retail as it’s one of the main profitability indicators. However, retail technology investments differ significantly from other industries in terms of return timelines. While marketing campaigns might show ROI within days or weeks, and software implementations might demonstrate value in months, retail hardware investments like ESLs typically realize their full return over longer periods, usually 12-24 months. This longer horizon reflects the comprehensive nature of retail transformation, encompassing changes in operations, staff efficiency, and customer experience.

Initial Investments vs. Long-Term Benefits of ESLs

The initial setup and deployment cost is often cited as a significant downside of digital labeling in the ESLs vs. traditional price label comparison. While the upfront investment needs to be considered—and varies considerably based on scale—it must be weighed against the potential for maximization in terms of operational efficiency, revenue growth, and customer satisfaction. Many retailers find success by starting small, perhaps introducing digital labels in key areas first, allowing for a strategic and effective gradual rollout.

Implementation and Integration Considerations

Digitizing store operations requires careful planning, particularly regarding integration with existing inventory management and POS systems. VusionGroup solutions are designed to offer maximum compatibility and minimize complexity, with user-friendly interfaces that facilitate staff onboarding. The system’s robust security measures ensure safe and reliable management of sensitive inventory data and pricing information.

Labor Savings: From Manual Updates to Automation

Manually pricing items takes valuable time and can lead to costly errors. Price automation, on the other hand, guarantees measurable time savings and dramatically improves accuracy. Instead of updating pricing on multiple levels, only the database requires oversight. Connected electronic labels consistently display the correct information without additional input from the staff.

Ongoing Maintenance: Cost Analysis of Both Systems

The ongoing cost of traditional paper labeling includes expenses related to the labels themselves (paper, ink, etc.). Still, more crucially, it must be balanced with the cost of paying employees to update labels manually multiple times a day.

ESLs, on the other hand, may require general maintenance; however, updating prices as often as needed becomes virtually free and significantly reduce ongoing operational costs.

Financial and Budgetary Considerations

Investing in ESL technology requires alignment with budget cycles and forecasts for a plan that will secure ROI. Starting small, perhaps by introducing digital labels in a few key areas, allows for a gradual rollout that’s both strategic and effective. Scaling up becomes a natural next step to enhance operations further.

Overcoming Technological Barriers and Staff Training

Digitizing an entire store requires making the right choices ahead of time, such as considering how ESL can be integrated with existing inventory management and POS systems. VusionGroup solutions are designed to offer maximum compatibility and minimize the complexity of this task. They are also user-friendly to facilitate onboarding. Again, a gradual rollout is often the ideal approach to ensure everything goes according to plan and address potential setbacks as they arise.

The Reliability of Digital Infrastructure

Going digital also means more data to manage safely and reliably, as ESL systems handle sensitive inventory data and pricing information. While the consequences of inaccurate data from the perspective of profitability cannot be ignored, data protection and privacy pose an even more concerning issue. Advanced digital pricing solutions should offer easy integration and streamline in-store operations securely through robust security measures designed to prevent unauthorized access.

Deciding the Best Fit for Your Business

Every store operates within unique parameters that must be considered when deciding whether to switch to ESL or keep traditional price labels. From physical size to budgetary concerns and ROI goals, you need to assess your circumstances objectively.

Evaluating Small vs. Large Retail Environments

Small, independent retailers who operate with few products that don’t require frequent price updates may find that the benefits of ESLs vs. traditional price labels are minimal.

As the inventory expands and for retailers who need to deal with frequent price updates, however, the limitations of paper labels are more evident. Switching to ESLs saves time on manual updates, improves pricing accuracy, enhances operational efficiency, and boosts customer satisfaction, offering a clear advantage.

Sustainability and technological competitiveness may also be essential to store owners who wish to stay ahead of the curve. ESL labels and automation promote flexible retail environments and enhanced in-store experiences, which can drive better sales.

In today’s rapidly evolving retail landscape, ESLs represent more than just a technological upgrade—they’re a strategic investment in the future of retail. By enabling real-time pricing, enhancing operational efficiency, and delivering superior customer experiences, ESLs clearly outperform the paper-label traditions of the past. Retailers who embrace this digital transformation position themselves at the forefront of retail innovation, ready to meet the demands of tomorrow’s consumers.