Vitra The Village Euroshop 2017 (Photo: Vitra)
; invidis Yearbook 2018/19

Electronic Shelf Labels (ESL) | More than just prices - storytelling at the shelf-edge

Whether Media Saturn, Carrefour or pharmacies: Electronic Shelf Labels (ESL) are on the rise. Success stories are however mostly limited to electronics and food retailers.

ESL projects are fundamentally different from classic Digital Signage concepts. Content on the electronic labels comes exclusively from back-office systems such as inventory management. As a result, basic CMS functions are sufficient.

ESL was previously limited to the display of prices. But only very few traders changed their prices frequently enough in order to warrant an investment in ESL. Whereas Amazon changes prices for a product up to 80 times per week, on average, most retailers rarely come up with more than one change per week. Having said that, there are around 5,000 weekly price changes in electronics retail chains.

The ESL pioneer, however, is the French food retail industry, which has been relying on dynamic price displays via ESL for many years for legal reasons. Early pilots in the telecommunications industry showed even greater potential. In 2008, T-Mobile Austria tested ESL at the point of sale. Although the focus upon price display was not used here, the availability of larger ESL enabled the additional display of product features. The breakthrough for the world’s largest ever ESL rollout (more than 10 million labels) was introduced at over 1,000 Media Saturn stores in Europe throughout 2015/16 – an investment sporting an almost three-digit million Euro figue.

Shelf powered ESL in Food Retail at Vitra The Village (Photos: Vitra)
Shelf powered ESL in Food Retail at Vitra The Village (Photos: Vitra)

In principle, ESL has the potential to provide support for retailers in four key areas: dynamic price display, additional customer service, process optimisation and employee information (availability, end of life). Many case studies for ESL have focused upon customer communication and customer experience.

With the latest larger and multicolour ESL generations, near real-time size and color availability as well as QR codes are now increasingly displayed alongside price and product features. As part of a one-to-one communication, one of these options is the individual display of allergens, dietary requirements and customer loyalty card benefits. Added to this is the product search feature. Perhaps of even greater
importance than customer-centric service features are process simplification features for merchants, such as avoiding bad pricing and cross-channel price transparency. Ultimately, this means that prices can remain consistent across all channels.

According to Michael Rodin-Lo, founder of Umdasch Digital, the ROI bandwidth for pure dynamic pricing is considerable, ranging from a few months to more than 10 years. Rodin-Lo has been a specialist for ESL projects since 2008 and has realised many rollouts. The shortest ROI was found in a used car dealership, whose ESL investment was recuperated after just 42 days. The longest ROI can be found in the food retail sector. While the 10 year cycle may not appear to make financial sense, ESL is nevertheless often introduced for competitive reasons.

Interactive wine shelf with digital signage and ESL (Foto: invidis)
Interactive wine shelf with digital signage and ESL (Foto: invidis)

In a technological sense, ESL providers differ principally through two radio technologies: the most widespread (including the market leader SES Imagotag), the transfer of the content of access points to the labels and a return channel, in essence providing the confirmation of the change. Other providers like Pricer rely on infrared, however this technology requires a larger number of transmitters.

At the beginning of ESL, neon-based tube systems were also tested. For this, their starters were exchanged and modulated to the label information using light frequencies. While the approach may have been something of a technological one-way street, it also suffered from the fact that labels hidden by customers or goods were not updated.

The next approach was a throwback from TV remote technology. In fact, infrared is still used today in an albeit modified form by Pricer. The radio technology which dominates today was still too expensive in the early days of ESL. „For IR, we had to attach large bowls equipped with 200 IR sensors to the ceiling for every 100 m² of space. Technology-related reflection problems and expensive wiring made
IR just too expensive and unreliable.“

ESL are available in various sizes - Imagotag booth at EuroCIS 2018 (Photo: invidis)
ESL are available in various sizes - Imagotag booth at EuroCIS 2018 (Photo: invidis)

Today, labels are based almost exclusively on the E-ink technology which can be found in e-book readers. Bistable grey LCDs were too pressure and temperature sensitive in practice, and full-colour LCDs used by Digital Signage displays consume too much power – a crucial factor in the art of ESL. ESL should run without a change of battery for five years. Technically, much longer terms are possible, but battery warranties generally run for a maximum of five years.

The increasing electrification of shelving systems in retail enables LED-lit shelving, but also the supply of electricity to ESL, which opens up a number of new options. Content can be updated virtually every minute and image refreshment speeds up significantly, and enables information regarding product availability. The Swiss shelving system provider Vitra has developed a large portfolio of electrified systems
and adapters for ESL purposes.

Jonny Walker LED Shelf in Mexico City (Photo: invidis)
Jonny Walker LED Shelf in Mexico City (Photo: invidis)

In addition to electrification, mixed operation of various ESL technologies will surely play an increasingly important role in the future, especially as existing labels are supplemented by new electronic ones. Unfortunately, due to the fact that transmission protocols of individual manufacturers are not compatible with one other, mixed operation is normally a complex end to end procedure. To address this problem, Umdasch Digital has developed a middleware that enables the joint management of labels from different manufacturers in one store.

Although the drop in ESL prices has been enormous in the past, according to market observers, there isn’t any significant room for further price reductions. Technologically speaking, E-Inks with a maximum of three colours are at the end of their development cycle. The next big thing will be the use of ESL in the fashion field. So far, the labels are still too heavy for the majority of hanging textile products. The first producers of such solutions are combining ESL functionality with retail security and RFID, and will go into production months ahead of sale (source tagging).

Imagotag offers an ESL / Auto Replinishment solution (Photo: invidis)
Imagotag offers an ESL / Auto Replinishment solution (Photo: invidis)
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