Why are stores switching to electronic labels?

Why retailers are switching to digital price tags.

Walmart recently announced it would add electronic shelf labels to 2.3k stores by 2026 — and Walmart’s not alone.

A yellow price tag with digital numbers on it is attached with white string to a red basket full of groceries.

Retailers including Whole Foods, Amazon Fresh, and Ikea are also getting in on the trend.

What’s wrong with paper?

Apart from wasting a bunch of it, employees don’t have to walk around manually changing digital labels.

  • Walmart first tested digital labels at a Texas store. The switch cut price changes from two days of work to only a few clicks.
  • Some labels have lights that flash when an item needs restocking, or to help employees and third-party shoppers — Instacart, Uber Eats, etc. — find items faster.
  • Stores can instantly change prices, such as lowering the cost of soon-to-expire items or hiking prices on in-demand merchandise.

That last one sounds a bit unethical

It certainly could be, and we definitely saw stores get in trouble for price gouging on hand sanitizer and masks amid the pandemic.

But Santiago Gallino, a retail management professor at University of Pennsylvania’s Wharton School, told NPR it’s more likely retailers will chill on surge pricing to avoid upsetting repeat customers, instead using digital prices to ensure online and in-store pricing remains consistent.

How else might this affect shoppers?

Shoppers may find digital labels more engaging, depending on how they’re used. For example, if they can scan labels with their phones for more info about a product, or to learn about sales and promos.

The flashing lights could also potentially be used to help shoppers identify specific items, such as gluten-free snacks or EBT-eligible purchases.

Or — and we’re just throwing this out here — every item with truffle oil, thanks!

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