Electronic Shelf Labels (ESL): Is this the way to go?

Electronic Shelf Labels, also known by the acronym ESL is a wireless system used by retails for displaying prices for their products.  On average, typical chain retailer makes 10,000 to 12,000 price changes a week, and the widely used process of printing paper labels and replacing it can take several hours; not to mention errors, which can  further result in giving away products for less than the original price (for those participating in Scanner Price Accuracy Voluntary Code).   The benefits are clear – savings in labour and no free-giveaways. 

Although ESL has been around for more than 25 years, the associated costs have kept many retailers at bay.  In 2002, per label price reported by RFID Journal was between $6 and $8; however in 2006, W5 ESL System was selling for $3.50 a label.  Altierre, another ESL solution has been implemented by two grocery chains in the US, installing two RFID readers to control 25,000 labels across 50,000 sq ft. of sales floor, at the cost of $5 a label with the need to replace them every five years.  Progressive Grocer’s December ’09 edition reports yet another success story of ESL; this time by ZBD, a UK based ESL solution provider.  ZBD’s epop solution is dust and water ingress safe and can integrate with various database systems. 

Is ESL the right way to go?  Retailers in Australia and Europe are piloting with much enthusiasm and so are some chains in the US.  Having worked at the store level, in theory this is a wonderful technology that can save labour hours and increase price accuracy, however we need to determine the total cost of ownership before jumping on the bandwagon.  Many of these ESL are waterproof and claim to withstand the store conditions but what about when a customer rams their buggy in the shelf?, power outages, the capability or incapability of incorporating in-store specials. 

Being in the technology field and having worked at the store for one of the largest retail chains, I do see the benefits of this technology, however, there needs to be a thorough cost-benefit, risk analysis and a long-term sustainability to be considered before venturing in this direction.

What are your thoughts? Do you see hurdles and/or benefits from this approach? Will this be the future of signage in the retail industry?

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