Is It Worth It to Install Digital Price Tags for Retail Stores?

Today, the digital price tag is one of the most current trends in the retail industry and is continuously gaining popularity across many brands and businesses. And as a billion-dollar market right now, a lot of big brands are implementing digital price tags themselves. Other retailers are poised to follow. But is it worth it to install digital price tags for retail stores?

In this current age of retail modernization, businesses implementing new technology is a must. They need these new solutions to keep up with customer demands and new customer behaviors. However, it’s also important for retailers not to be immediately swayed by the initial hype. Careful considerations must be made.

Retailers hesitating and having reservations about switching to digital price tags is not a surprise. Like with every new retail technology that gains traction in the industry, retailers will need to consider a lot of factors and elements before even thinking of installing digital price tags.

Here are some factors that retail stores might need to know about digital price tags:

• Its definition: A digital price tag, also known as an electronic shelf label (ESL), is a small electronic device that displays price details and product information. They are commonly found and used in various retail stores as a modern alternative to traditional price labels. They can change prices automatically and show various product details that paper labels otherwise can’t.
• Its function: Digital price tags from different brands might have different features and capabilities. However, in general terms, they all have similar ESL functions. This includes displaying the product prices and product details, as well as the automatic or remote price changes.
• The requirements: Before installing digital price tags, retailers should also know more about any specific requirements that might apply to their operations. This includes any hardware, software, additional training, store infrastructure, integration with existing systems, security, and more.
• The advantages and disadvantages: Like with other technology or modern solutions, retailers need to study the advantages and disadvantages that digital price tags will bring to their operations.
• The various kinds of digital price tags: Retailers also need to think about the different kinds of ESL possible. There might be digital price tags for fashion retail, freezer labels or various freezing environments, electronic labels for convenience stores or specialty stores, labels for grocery retail, and more. Retailers would need to find the best ESL for their environment. 

Electronic shelf labels (ESLs) or digital price tags offer several benefits for retailers. Compared to traditional paper tags or sticker labels, digital price tags offer unique benefits that will truly catapult businesses into modernization and enhance retail operations.

Here are some of them:

• Real-time Price Updates - Digital price tags allow retailers to update product prices in real-time, ensuring consistency and accuracy across their stores. This flexibility can enable retailers to implement dynamic pricing strategies based on various factors, such as demand, competition, or inventory levels.
• Improved Operational Efficiency - Digital price tags also eliminate the need for manual price changes. This reduces labor costs and minimizes errors associated with traditional paper-based price labels. Retail staff can focus on other tasks, leading to improved productivity and efficiency for the retail store.
• Enhanced Customer Experience - Digital price tags can display additional information beyond just the price, such as product descriptions, reviews, or promotions. Usually, they also have additional features and capabilities, depending on the technology and the brand. These can enhance the shopping experience for customers and provide them with an engaging customer journey.
• Optimized Inventory Management - Some digital price tags for retail can be integrated with inventory management systems to provide real-time updates on stock levels. This helps prevent out-of-stock situations and improves inventory management efficiency by enabling timely restocking and replenishment.
• Flexibility and Adaptability - These digital tags also offer flexibility in pricing strategies and promotional activities. Retailers can easily change prices or launch promotions without the need for physical label changes. This allows for quick adaptation to market conditions or business requirements.
• Reduced Environmental Impact - Since digital price tags are electronic and replace paper-based price tags, they reduce paper waste for the retail store. It contributes to environmental sustainability efforts. Of course, it also aligns with consumers' growing preference for eco-friendly and ethical shopping practices.
• Increased Security - Digital labels can be equipped with security features to prevent unauthorized price changes or tampering. This helps ensure the integrity of pricing data. It also protects retailers from potential losses due to price manipulation or fraud.
• Competitive Advantage - Adopting ESLs demonstrates a commitment to innovation and modernization, which can enhance a retailer's brand image and differentiate it from competitors. It also positions retailers to better meet the expectations of tech-savvy consumers.

While digital price tags for retail stores bring significant benefits, there are still some disadvantages. Retailers also need to think about these drawbacks to see if installing this technology is worth it for their business.

Here are some disadvantages to using digital price tags:

• Initial Investment Costs: Implementing digital labels requires a costly initial investment in hardware (such as digital displays and communication devices) and even software (for price management and integration with existing systems). These upfront costs can be expensive for retailers, especially for large-scale deployments.
• Maintenance and Support: Some digital labels require ongoing maintenance to ensure proper functioning and software updates to address any bugs or security vulnerabilities. Retailers may also need to provide training for staff members on how to use and troubleshoot ESL systems effectively.
• Dependence on Technology: Digital labels rely on technology infrastructure to operate as well. This might include Wi-Fi networks and other power sources. Any disruptions to these systems, such as power outages or network failures, can impact the functionality of ESLs and result in inaccurate pricing information.
• Compatibility Issues: Integrating ESLs with existing systems, such as inventory management or point-of-sale software, may present compatibility challenges. Retailers need to ensure that digital price tags for retail can seamlessly communicate with other systems to provide accurate pricing and inventory information.
• Potential Resistance from Customers: Some customers may still prefer traditional paper-based price tags or find it more difficult to read information displayed on digital screens. Retailers need to consider the preferences and needs of their customer base when implementing digital price tags. They can also look for ESL solutions that have the technology to make it easier for older customers and more. 
• Other Environmental Concerns: While digital labels can reduce the paper waste associated with traditional price tags, they still require energy to operate. They may contribute to electronic waste when they reach the end of their lifecycle. Retailers should ensure the lifespan and durability of the ESL solution they will get. They can also explore options for responsible disposal or recycling.

Various types of retail stores can take advantage of digital price tags. Since digital labels are flexible and versatile and ESL vendors continue to develop new ESL solutions and ESL technology, more and more retailers of various sizes and industries can install them.

Digital price tags for retail stores can be found in:

• Grocery Stores: Grocery stores can benefit from digital price tags. With digital labels, they can easily update prices for perishable goods, manage promotions, and display nutritional information or recipe ideas.
• Electronics Stores: Electronics retailers can use digital price tags on their stores as well. They can automatically adjust prices based on market trends, showcase product features and specifications, and provide real-time availability updates.
• Fashion Retailers: Fashion retailers can utilize small, hook-based digital price tags for their merchandise. They can highlight new arrivals, showcase outfit combinations or styling tips, and offer personalized recommendations based on customer preferences.
• Department Stores: Department stores can leverage digital price tags in their stores. They can use these labels to streamline pricing changes across multiple sections, promote cross-selling or upselling opportunities, and provide detailed product information to customers.
• Home Improvement Stores: Home improvement stores can use digital price tags for their wide range of products and offerings. These retail stores can use digital labels to highlight their tools, appliances, and building materials, and provide instructional videos or DIY project ideas.
• Pharmacies: Healthcare or medical establishments like pharmacies can benefit from digital price tags as well, especially those with the multi-page feature. They can display prices for over-the-counter medications, promote health and wellness products, and provide medication dosage instructions or warnings.
• Specialty Stores: Specialty retailers, such as beauty stores, sports stores, or pet stores, can use digital price tags to highlight featured products, showcase promotions, and display any additional information.
• Convenience Stores: Convenience stores can leverage digital price tags to keep up with the demand from their various customers. They can quickly update prices for fast-moving items, promote limited-time offers or discounts, and display nutritional information for grab-and-go food items.

These are just a few examples of retail stores that can benefit from these new ESL solutions. Digital price tags for retail stores can help improve pricing accuracy, operational efficiency, and customer engagement. Overall, this technology, when used effectively, can help retail stores perform better.

While digital price tags have a significant impact, some retailers might also have uncertainties when installing and learning new technology. The truth is that ESL is fairly easy to use.

Here’s a general overview of how digital price tags typically work:

1. Digital Display: ESLs feature electronic displays that can show pricing information, product descriptions, promotions, or other relevant details. These displays can vary in size and type, including e-ink displays, LCD screens, and LED panels.
2. Communication Module: Each ESL is equipped with a communication module that enables wireless communication with a central management system. This module typically uses technologies such as Wi-Fi, Bluetooth, or RFID to transmit data between the ESLs and the central server.
3. Central Management System or Label Management System: Retailers use a central management system or software platform to control and manage the digital labels. This platform allows retailers to update prices, manage promotions, and synchronize pricing information across all ESLs in real time. This platform can also allow users to design and update any content on the labels.
4. Price Updates: When a retailer updates a product's price or information in the central management system, the changes are transmitted wirelessly to the corresponding ESLs in the store. This ensures that pricing information is accurate and consistent across all displays.
5. Integration with POS and Inventory Systems: Electronic price tags can be integrated with the retailer's point-of-sale (POS) system or inventory management system. This can help enhance real-time updates on stock levels and sales transactions. This integration ensures that pricing information is automatically adjusted based on inventory levels and sales activity.
6. Power Source: ESLs are powered either by batteries or through a wired connection to an external power source. Battery-powered ESLs typically use low-power consumption technologies to prolong battery life and minimize the need for frequent replacements.
7. Security Features: Digital price tags may include security features such as encryption protocols, access controls, and tamper-proof designs on the actual device to prevent unauthorized access or tampering with pricing information.

SOLUM ESL, one of the leading innovators in ESL solutions, has developed Newton labels. Newton ESL is a centralized, fully automated system that can streamline operations for various retailers. It’s equipped with state-of-the-art technology and capabilities to enhance every part of retail operations. This includes inventory management, shelf restocking, price label updates, customer service, customer browsing and shopping, sale promotions, and more.

Here are some Newton ESL features that all kinds of retail stores can utilize:

• 10x breakneck update speed
• 7-page capacity
• 7-color LED indicator
• 2 multifunctional, programmable buttons
• Full-graphic e-ink display technology
• Wide size range from 1.6” up to 11.6”
• Freezer label variation
• Near-field communication (NFC) capability
• IP67 dustproof and waterproof rating
• Label management system
• 10-year battery life

Newton ESL also has different digital label types that will fit different retail types. This allows for more flexibility and advantages that fit different retail stores, whether they are small convenience stores or bigger department stores and grocery stores.

At the end of the day, it’s up to retailers, business owners, and managers to decide if they need to install digital price tags. If your store needs to enhance the customer shopping experience, inventory management efficiency, labor and cost reduction, and more, then it’s worth it to install digital price tags for retail stores.

Looking forward to investing in an ESL solution for your store? Talk to SOLUM experts now and learn more about what Newton ESL can do for you and your retail operations.