Bar codes and computerized registers revolutionized the grocery store experience.  Long gone are the days of employees manually “stickering” every item in the store.  Consumers expect that the current pricing system within grocery stores, using the bar code and panel system, eliminates pricing errors and discrepancies.  However, most grocery stores put over 5,000 items on sale every week and remove sale prices from another 5,000 items, creating ample opportunity for price differences.

The next wave of retail technology to reduce the price discrepancies is for retailers to go completely paperless by putting digital price tags on the shelf.  These tags allow retailers to wirelessly communicate price changes to tags throughout multiple locations, ensuring that the price displayed on the shelf and the one scanned at the register always match.

A digital tag maker in San Jose, California, Altierre, has spent 10 years developing the technology for digital tags. The tags can provide multiple screens of information.  Altierre’s tags use black-on-gray liquid crystal displays to reduce power consumption.  Altierre suggests that most stores could be outfitted with 20,000 to 25,000 tags at a cost of $5 each.  The labor savings, Altierre suggests, would pay back the investment in two and a half years.

According to executives at Altierre, grocery stores have not jumped on this opportunity because they worry customers will not adopt the new technology as they are used to paper stickers.  In the United States, grocery stores still cannot justify making the initial investment.  The only company in the United States that has adopted the technology is Kohl’s.  Kohl’s uses a large LCD screen that sits on a rack of clothes or a countertop to show a description and a sale price.  This allows Kohl’s to highlight a sale price without having to change the sign.

Discussion Question:

What are the advantages and disadvantages of electronic shelf labels from the perspective of the retailer?  The customer?

 

SOURCE: Randall Stross, New York Times, February 9, 2013