Digital Price TagsDigital Price Tags, also known as Electronic Shelf Labels (ESL), are wireless displays. They run for years on a single battery due to the ultra-low power consumption of their ePaper technology. The primary use case is to quickly and accurately update pricing.
Operational EfficiencyDigital price tags make pricing updates faster and more accurate. Co-originating the pricing catalog on the shelf with the cash register and e-commerce site offers many more advantages, including:
- Avoid price confusion at the cash register.
- Adjust pricing automatically based on turnover. The price goes up for fast-moving items and down for the slow ones.
- Adjust pricing based on external factors such as the weather.
Flash SalesA flash sale is a promotion run for a short time. Digital price tags update thousands of prices an hour, allowing stores to run campaigns like early bird specials across various products.
Price OptimizationDigital shelf labels simplify collecting data to simultaneously test cost optimizations across hundreds of products. It balances the unit price and quantity sold to maximize profit margins. Too expensive and volumes decline, while overly discounted items cut profit margins. The following chart shows the price against the sales volume in green.
Price ElasticityPrice Elasticity measures how sales volume changes with the sales price. Sensitive products react more strongly to discounts. On the other hand, marketing and promotion are more effective for inelastic merchandise. A digital shelf label makes it easier to test elasticity.
The following chart plots sale volume as a function of unit cost. The blue line is more elastic, while the blue is more fixed.
Digital Shelf Label TechnologyDigital shelf labels are not lit displays. Instead, they use electronic paper to hold screen images indefinitely without consuming power. That allows them to run for years on a small battery. The power consumption mainly comes from updating the display. So making many updates every day reduces the lifespan. Most manufacturers include a small LED beside the display that can flash. That makes finding a label easier. However, emitting light is a power drain, and the devices can take a couple of seconds to respond. Digital shelf labels have a limited color pallet. The most common are black and white, plus either red or yellow. There is no color depth or shading to the pixels. Gray scale simulation is possible by turning some pixels on and others off. But that degrades resolution and offers minimal depth. Adding logos requires reworking image files by a graphic designer to manage the unique display limitations.
Digital shelf labels range from 1.5 inches (3.5 cm) to 12 inches (30cm). Restricting the number of different sizes reduces the time spent designing the display for each size and makes it easier to reach minimum order volumes. Retailers typically focus on the petite sizes because they are more affordable and fit onto standard shelving.
Premium labels protect devices from harsher environments. So they work in refrigerators and withstand a certain amount of moisture. However, they are not waterproof and are not for outside environments.