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The Benefits of Electronic Shelf Labels in Retail

Telink Staff

April 13, 2020


portable barcode scanner with baskets

The right wireless networking solution can offer retailers the capabilities they need to implement electronic shelf labels effectively.

Electronic shelf labels (ESLs) are increasingly being used to display product prices in stores. This wireless retail solution is typically attached to the front edge of shelves, runs on battery power, and uses E Ink™ or LCD displays to indicate the current prices of products to shoppers.

Behind the scenes, these prices are updated by a central console running label management software, and a communication gateway continuously transmits any and all changes to the network of labels. To keep ESLs cost-effective, this network must deliver the requisite range and speed while keeping its power demands low. Thanks to the proliferation of radio frequency (RF)-enabled IoT devices, more and more retailers are figuring out ways to meet these requirements.

electronic shelf labels management software

In fact, a wide variety of retailers — including many top global department stores, supermarkets, and drug stores — are already using ESLs. What’s more, the ESL market is growing quickly: Global Market Insights projects the sector’s compound annual growth rate will hover around 16 percent through 2024. By then, the global ESL market could very well hit $1 billion.

Understanding the Value of Electronic Shelf Labels in Retail

Although implementing an ESL system requires moderate initial outlays, retailers looking to cement a competitive advantage may find that such a system will save them significant time and money in the long run. The potential benefits a retailer might gain from the adoption of electronic shelf labels include:

  • Dynamic Centralized Pricing: With centralized pricing, all price points are controlled and adjusted using software on a central workstation (which often actively aligns with regional or corporate-level pricing fluctuations). This is much more efficient, accurate, and cost-effective than making manual price adjustments. It also enables dynamic pricing, or pricing that adapts to a range of factors — rising to match demand or account for low inventory; falling to match competitors’ prices or quickly sell items nearing the end of their shelf lives.
  • In-Store Heat-Mapping: When equipped with connectivity via communications technologies like Bluetooth® Low Energy beacons, ESLs can track how consumers move through a store. Label management software can then produce a heat map of the store’s floor plan, revealing high-traffic areas and logging the products they contain.
  • Automated Inventory Management: Inventory management can be a major headache for retailers, and automating the process can generate a great deal of savings. ESLs can be integrated with sales management software to enable retailers to more accurately track low inventory levels and gain instant insight into when new stock will be available. The displays can also be configured to show QR codes that take consumers directly to an online buying option.

Of course, to realize these potential benefits, an ESL system needs to be rolled out over the right technological foundation. As alluded to above, low power consumption is a necessary condition of ESL cost-efficiency. Similarly, ESL systems need to be scalable enough to incorporate hundreds or even thousands of connected nodes — all while facilitating effective communication throughout stores of any size. Finally, especially in light of high-profile hacks of retailers like Target and Home Depot, retailers must be sure to make security a top priority as they continue to expand their digital portfolios.

What Retailers Must Consider When Implementing ESLs

An ideal ESL deployment will look slightly different for every retailer — a grocery store like Whole Foods will have different needs than a specialty retailer like Apple, which will have different needs than a big box store like Costco. To a large extent, a retailer’s unique needs and existing infrastructure will determine its priorities — and the challenges it will have to overcome — as it seeks to implement ESLs. The following are but several of the real-world factors retailers will need to consider when rolling out their ESLs:

Store Layout: RF signals need to be able to reach every label in a store to ensure accurate pricing, but that can be difficult if there are physical barriers in the way. For instance, a grocer will need to ensure its ESL system’s RF hardware is able to transmit signals with enough power to penetrate steel and glass refrigerators.

Workflow: ESLs are meant to streamline the labelling process, but this means that a retailer’s technological capabilities must align with how it is actually going to utilize its labels. For instance, does the retailer want prices to come straight from corporate, or is pricing handled at the store level? If the answer is the former, the retailer’s headquarters will have to manage communication between multiple stores and a central server or a cloud setup, necessitating an added layer of technology and management.

Custom Development: In addition to choosing an ESL system that suits its current inventory management practices, it makes sense for a retailer to choose a system with a robust protocol stack that can be reconfigured to suit the retailer’s shifting needs. For instance, while a retailer may want to explore how shoppers can use their phones to interact with its ESLs directly, not all backends would support this kind of interactivity.

Appearance: Retailers don’t want to be limited when it comes to the “look” of their labels. Are they able to choose between several sizes? Are the graphics as crisp and readable as they would like? ESLs can even incorporate attention-grabbing features like blinking colored lights.

Cost: The cost-effectiveness of an ESL system is always going to be an important consideration. To get a feel for whether ESLs represent an economically prudent option, a retailer should compare its initial investment in ESLs with its existing relabelling costs (which can be quite large for high-inventory stores). Retailers should also consider the ongoing maintenance costs of ESLs and understand how long various types of low-power devices will actually last.

Why a System-on-a-Chip Solution Is a Solid Choice

Fortunately, system-on-a-chip (SoC) wireless connectivity technologies offer retailers a reliable, comprehensive solution. When designed with multi-protocol compatibility in mind, SoC wireless connectivity technologies can help address the power, security, and cost requirements associated with effective ESL implementations.

For instance, SoC wireless connectivity technologies are ideal for achieving secure, reliable connectivity throughout a sprawling store. Deploying an RF connectivity network is often the easiest way to incorporate hundreds of ESLs into a single network, and a growing number of SoC offerings are coming equipped with RF signal processing capabilities. RF-enabled ESLs are not only more secure than legacy systems, but facilitate better, more reliable connectivity.

How Telink Can Help

Telink can offer the support that retail-focused developers need to bring functional and cost-effective ESLs to their stores. Telink’s SoC wireless connectivity technologies utilize IEEE 802.15.4, an ideal low-power IoT communications protocol for ESL applications. Because ESLs don’t need to stream data continuously — they merely need to be able to register occasional changes — battery-powered, wireless-enabled labels can potentially go years without maintenance.

Telink also offers support for developing custom protocols on top of IEEE 802.15.4. That means retailers get the purpose-built capabilities they need to suit their infrastructure and optimize their workflow. This includes exciting integrations with other IoT devices like lighting and motion sensors. It’s possible to imagine a retail space that is truly “smart,” with seamless interaction between ESLs and other systems. The result could both minimize retailers’ labor costs and exponentially improve the customer experience.

Telink’s ESL solution has excellent network robustness. This is essential because, since the wireless network of the entire store is composed of thousands of ESL nodes, higher requirements are placed on the performance of the gateway and the response speed of the ESL nodes. Telink’s solution allows multiple gateways to work simultaneously in a single deployment area — and up to thousands of labels can be connected to one gateway — with each gateway using a different frequency. Moreover, the same label can connect to two gateways at the same time, gateway time synchronization is supported, and multiple nodes can be refreshed simultaneously at a refresh rate of under two seconds.

As things stand, electronic shelf labels are currently available in a variety of forms — many of them holdovers from decades past — but Telink can offer the clear power, performance, and interoperable connectivity advantages that will make ESLs an even more appealing solution for tech-savvy retailers.