For Digital Price Tags, It’s Their Time to Shine
Anyone who’s anyone in the retail industry has seen or at least heard of the digital price tag. The digital price tag is a simple piece of technology that has almost singlehandedly revolutionized the retail logistics space in numerous ways, but until recently, their existence was nothing more than an afterthought. But recent news out of the Amazon and Best Buy camps has brought this technical tag into the spotlight, and it gives us the perfect opportunity to talk about why they should be present in every single retail store across the country—if not the world.
As an alumni of the retail sales floor community, I can sympathize with logistics and merchandising teams across the retail landscape that are tasked with updating the physical price tags that litter the showroom. Specifically, I graduated from Bullseye University—better known as Target—where there are quite literally tens of thousands of SKUs throughout the store that get updated on a weekly basis. The pricing team would arrive at the store hours before the doors were opened, and they’d be working throughout the day to ensure the proper labels were in their proper locations, and that sales promotion labels were correctly displayed for the proper amount of time. There are literally full on teams of individuals whose tasks involve taking down and hanging up new signage. It’s one of those thankless jobs in the retail community that, if it didn’t exist, would result in total chaos for shoppers.
With the emergence of digital price tags, the strain on those teams from a physical labor standpoint gets lifted, but that just scratches the surface of the types of benefits that they would realize.
Take Amazon and Best Buy. The two companies at the top of the consumer electronics retail industry have launched physical, in-store experiences that center themselves on the utilization of digital price tags. The goal for both companies, it seems, is to create in-store experiences that borrow elements of the online shopping experience to create the ultimate omnichannel shopping experience. For Amazon, their new Four-Star Store in New York City uses digital tags to display that product’s rating, how many reviews its received from customers, the price of the product, and the Amazon Prime member price—all of the information that you’d expect to see on a typical Amazon product page. Best Buy’s digital tags, as pictured in a recent blog post from Gap Intelligence, feature similar information, but expand to include some of the product features, information on open box offers, and in-stock information.
A Best Buy digital price tag. | Credit: Gap Intelligence
Digital price tags at Best Buy are a relatively new thing. The company ran a 60 store test in 2017 to see how the technology could impact the in-store shopping experience. That test resulted in the company making a $30 million investment with Pricer Electronic Shelf Labels to bring their solutions into 150 additional stores over the past several weeks.
According to the Gap Intelligence post, Best Buy stands to realize a massive amount of labor relief in those locations. The company is said to devote up to 40 hours of labor each week to price tag management, which adds up to some 2,000 hours per year—and that’s just in their smaller locations. Spread that across the 210 locations that these digital tag will initially roll out in and the company could eliminate some $10 million in merchandising labor costs during the first year—and that’s not even including the cost of price tag printers and savings from reduced pricing override losses (which typically occur when outdated sales signage is left on the sales floor.
But digital price tags offer a number of real improvements to the shopping experience as well. The Best Buy tags, in particular, alleviate a major shopping headache for the customer and sales floor associate by providing in-stock information (a potential major time-saver for the retailer). Additionally, they’ll enable retailers to maintain consistent pricing of products across departments, something that big box stores in particular struggle with as one product could be seen in multiple locations throughout a store with multiple price points displayed in front of it. And then there’s the potential of running Prime Day-like promotions throughout the store that last for a limited time (be it a day or an hour) powered by software rather than physical price tags. Other benefits could include real-time price adjustments, allowing a retailer to better compete with online competitors.
Then there’s the integration of online and in-store pricing through digital price tags. One of the things I hated having to explain to a customer was how we could have different prices for a product online than we do in store. Why? I couldn’t tell you, but I would get frustrated just having to feed them our canned response. Digital price tags, though, could potentially eliminate that online-in-store discrepancy, providing the customer with an even better shopping experience, knowing that they’re not going to become disgruntled when they find the product on your website for a lower price.
At the end of the day, the digital price tag is win-win solution. They’re something that clearly improve the workflow for retailers and the overall shopping experience for the consumer.