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19 Jun 2024 | 09:00

What are electronic shelf labels – and how do they work?

Cereal being picked from shelf with electronic shelf label

Electronic shelf labels (ESLs) represent a significant advancement in retail technology, transforming how retailers manage pricing, inventory, and customer interactions. Pioneered by innovative companies like Lidl, which has implemented ESLs across its UK stores, this technology is becoming an essential tool for modern retail operations. Lidl GB successfully trialled electronic ESLs in over 35 UK stores, resulting in an estimated annual saving of 206 tonnes of carbon through reduced paper and packaging while also drastically minimising ink usage. Remarkably, over two-thirds of shoppers surveyed did not notice the subtle change, demonstrating how seamlessly this modern technology can be integrated without impacting the shopping experience.

Electronic shelf labelling technology is developing all the time, and there’s plenty to learn about. Use the links below to find the section you’re most interested in:

Ready to get started? Speak to our team today or head over to our electronic shelf edge labels page to explore the range of solutions we offer through our exclusive partnership with Hanshow.

What are electronic shelf labels?

Electronic shelf labels are digital display devices used in retail stores to show product pricing and other information. Controlled centrally, these labels replace traditional paper price tags, offering real-time updates and greater efficiency. Typically, ESLs are connected via wireless networks, allowing for instantaneous price changes and information updates from a central database or control system.

These labels use e-ink technology, similar to that found in e-readers, which provides clear and readable displays with minimal power consumption. Through a combination of access points and software portals, store managers can update prices, promotions, and product information across multiple stores or departments simultaneously, ensuring accuracy and consistency.

The development of electronic shelf labelling technology

The journey of electronic shelf labelling began in the 1990s when the first generation of ESLs was introduced. These early models were quite basic, offering limited functionality and often requiring significant manual intervention to update prices and information. Despite these limitations, they demonstrated the potential for digital pricing in retail.
 
The second generation of ESLs emerged in the early 2000s, bringing improved technology and greater reliability. These systems featured better wireless connectivity and began to utilise e-ink displays, which offered clearer and more energy-efficient visual outputs. The user interface and control systems also became more sophisticated, allowing for more seamless integration with store management systems.
 
Today, we are in the third generation of ESL technology, characterised by advanced features such as full graphic displays, colour options, and enhanced connectivity. Modern ESLs can be fully integrated with store management software, enabling dynamic pricing strategies, inventory management, and personalised customer interactions. Additionally, today's ESLs can be used outdoors, as they are designed to be waterproof, dustproof, and scratch-proof. When looking for such durable ESLs, it is important to select those with an IP68 rating. These advancements have made ESLs a cornerstone of modern retail operations, providing significant advantages over traditional paper-based systems.

How do electronic shelf labels work? 

Electronic shelf labels connected to an access point

Electronic shelf labels operate through a combination of hardware and software components. At the heart of each ESL is an e-ink display, which provides high visibility and low power consumption. These displays are connected to a central control system via wireless access points distributed throughout the store. The access points communicate with the ESLs, sending updates and changes as needed.

The control system is typically a web portal that allows store managers to manage pricing, promotions, and product information centrally. This web portal integrates with the store’s existing inventory and pricing systems, ensuring that all information is accurate and up-to-date. Through this portal, managers can schedule price changes, run promotions, and adjust product information across multiple locations, all from a single interface.

 
This integration also allows for real-time updates, meaning prices and information can be changed instantly, responding to market conditions, competitor pricing, and stock levels. This dynamic capability is one of the primary benefits of ESLs, enabling stores to stay competitive and responsive in a fast-paced retail environment.
 
ESLs are designed to operate in a wide range of environmental conditions, making them versatile for  various retail settings. Standard ESLs can function efficiently in temperatures ranging from 0 degrees Celsius (refrigeration temperature) to 40 degrees Celsius (room temperature). Additionally, specialised ESLs are available for more extreme conditions, such as freezer environments, where they can function in temperatures as low as -25 degrees Celsius. This adaptability ensures that ESLs can be used throughout the entire store, including in areas requiring specific temperature controls, such as refrigerated and frozen goods sections.

The benefits of electronic shelf labels

The implementation of electronic shelf labels brings a multitude of benefits to retail stores. These advantages span from operational efficiencies to enhanced customer experiences, making ESLs a worthwhile investment for modern retailers.

Deliver an improved customer experience

One of the most significant benefits of ESLs is the enhancement of the customer experience. With real-time price updates, customers can trust that the prices they see are accurate and up-to-date, reducing confusion and improving satisfaction. Additionally, ESLs can display detailed product information, helping customers make informed purchasing decisions.

Facilitate dynamic pricing

ESLs enable dynamic pricing strategies, allowing retailers to adjust prices in response to market conditions, competitor pricing, and stock levels. This flexibility can help retailers optimise sales and margins, adapting quickly to changes in demand and supply.

Reduce costs to your business

Switching to ESLs can lead to substantial cost savings. Traditional price tags require significant manual labour to update, which can be both time-consuming and prone to errors. ESLs automate this process, reducing labour costs and minimising pricing errors, which can lead to improved profit margins.

Enable smart shopping and personalised advertising

ESLs can enhance the shopping experience through personalised advertising and smart shopping features. By integrating with customer loyalty programs and shopping apps, ESLs can display personalised offers and promotions, encouraging higher engagement and increased sales.

Achieve more advanced inventory management

With real-time data integration, ESLs can improve inventory management. Accurate and up-to-date pricing helps maintain correct stock levels, reducing instances of overstocking or stockouts. Additionally, ESLs can dynamically change their displayed content to indicate ‘low stock’ or ‘out-of-stock’ statuses, providing immediate visual cues to both staff and customers. This real-time visibility helps store managers make better decisions about restocking and ordering, ensuring that popular products are always available to ensure customer satisfaction. This precise control over inventory can lead to better financial planning and reduced waste.

Optimise your approach to omnichannel retail

ESLs support omnichannel retail strategies by ensuring consistency between online and in-store pricing. This synchronisation is crucial for providing a seamless shopping experience, where customers can trust that the prices they see online match those in the physical store.

What’s the environmental impact of electronic shelf labels?

ESLs offer several environmental benefits. They reduce the need for paper and ink, as traditional price tags require regular printing and replacement. This reduction in paper and ink usage contributes to lower carbon footprints for retail stores.
 
A key advantage of ESLs is their use of e-ink technology, which requires minimal electricity to maintain a display which is provided by an in-built battery. These battery-powered e-ink (to keep consistent with above) displays are expected to last 10-15 years, providing long-term environmental benefits. Additionally, some of the larger ESL displays use ultra-low energy LCD technology. These displays consume minimal power compared to traditional screens, further reducing the environmental impact.
 
However, it's important to note that some ESLs do require electricity to operate, and their production and disposal can have environmental impacts. Therefore, while they offer significant benefits, it's essential to consider these factors and strive for sustainable practices in their use and lifecycle management.

How to implement electronic shelf labelling

Implementing electronic shelf labels in your retail store involves several strategic steps to ensure a smooth and effective transition. Here’s a guide to help you get started:

Step 1: Define your goals

Start by identifying what you want to achieve with ESLs. Whether it’s improving pricing accuracy, enhancing customer experience, or optimising inventory management, having clear goals will guide the implementation process.

Step 2: Assess your needs

Evaluate your site’s specific needs. Consider factors such as site size, number of products, and the types of environments (e.g., room temperature, refrigeration, or freezer) where ESLs will be used. This assessment will help you determine the most suitable ESL technology and features for your store.

Step 3: Choose the right technology

Based on your goals and needs assessment, select the appropriate ESL technology. Consider factors such as display type (e-ink or LCD), battery life, connectivity options, and compatibility with your existing systems.

Step 4: Plan the deployment

Develop a detailed deployment plan that outlines the steps and timeline for the implementation. This plan should include the installation of access points, integration with your inventory and pricing systems, and training for staff on how to use the new technology.

Step 5: Pilot testing

Conduct a pilot test in a small section of your site or in a few selected sites. This test will help you identify any potential issues and make necessary adjustments before a full-scale rollout.

Step 6: Full-scale implementation

Once the pilot test is successful, proceed with the full-scale implementation. Ensure that all ESLs are correctly installed, and the system is fully integrated with your site’s management software.

Step 7: Monitor and optimise

After the implementation, continuously monitor the performance of the ESLs and gather feedback from staff and customers. Use this feedback to make ongoing improvements and ensure the system is meeting your goals.
 
By following these steps, you can ensure a successful implementation of electronic shelf labels that enhances your site’s operations and customer experience.

Use cases beyond retail environments

The potential of electronic shelf labels extends beyond the retail sector. They can be applied in various industries, such as warehousing and healthcare, to improve efficiency and accuracy in information management.

Warehouse shelf labelling

In warehousing, ESLs can streamline operations by providing clear and accurate labelling of inventory locations. This can enhance picking efficiency, reduce errors, and improve overall warehouse management.

Usage in healthcare

In healthcare settings, ESLs can be used for labelling storage of medications, equipment, and patient information, ensuring accuracy and reducing the risk of errors. They can also help in inventory management of medical supplies, providing real-time data on stock levels and usage.

Ensure a smooth implementation with The Barcode Warehouse

The Barcode Warehouse offers comprehensive solutions for the implementation of electronic shelf labels, backed by partnerships with leading manufacturers like Hanshow. We provide free consultancy to help businesses identify the most suitable ESL solutions and offer ongoing Professional Services and Managed Services to ensure smooth and effective deployment. By choosing The Barcode Warehouse, retailers can leverage expert guidance and support, maximising the benefits of electronic shelf labels in their operations. Unsure what is right for your business? Get in touch with our experts on our retail technology solutions page.

Watch Joseph showcase Hanshow ESLs in the retail zone in our Innovation & Customer Experience (ICE) Centre: 


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