Digital price tags are improving African retail

9 Apr, 2015
Minesh Manga, director at XON Retail

Retailers throughout South Africa have deployed ESLs and the technology is becoming commonplace while penetration is growing in neighbouring countries.

From our perspective more than 200 SPAR, KwikSPAR, SuperSPAR and Tops have employed the digital tags, consistently demonstrating return on investment (ROI) in 18 months. More than 75 Pick n Pay stores have done the same, there are over 4 million of these tags deployed in Southern Africa and they permeate eight countries. Monument SuperSPAR in Pretoria recently deployed 22 000 ESLs (against 24 000 SKUs) and achieved a 4% gross profit growth on sales floor as a result.

Electronic shelf labels (ESLs) help retailers significantly boost operational efficiencies, cut costs, cut back out-of-stocks, improve ordering and rapidly ascertain which products are performing well and deserve more of their valuable shelf space. The tags can now flash a highly visible light to draw retail employees or shoppers to specific products on shelves, being instructed to do so via smartphones and linked to consumers’ shopping lists. They can feed heat maps. They can interact with Web-facing systems and connect with click and collect services. Their in-store, wireless network can communicate with customer smartphones for in-store geo-tagging to show shoppers optimal routes to fulfil shopping lists – or find a specific product.

Fully functional ESL systems can interface directly with retail business systems. Price updates can even be automatically sent from a head office’s business system directly to the ESLs without any human intervention. Prices are simultaneously sent to tills so there can be no discrepancy anywhere along the chain. The best systems are bi-directional so managers can check that the prices have updated correctly at the shelves without sending someone to check each product.

Retailers can boost profitability using ESLs because the better systems can be interrogated at the shelf to ascertain any one of up to 32 parcels of information. These range from stock availability in local stores or distribution centres, to how products are performing, when orders were last placed, when last sales were made, average rates of sale, and much more. Supply chain information is immediately available and poorly performing products can be relegated to appropriate shelves or have their space reduced accordingly.

There are varying degrees of price discrepancy in retail operations and retailers are keenly interested in ensuring that customers have the satisfaction and peace of mind of knowing that the price they see displayed on the shelf is the price they will pay at the tills. The problem is compounded when customers often remove ordinary paper labels from shelves to prove to cashiers what a price should be. It negatively impacts customer satisfaction and loyalty but, more importantly, means every other customer thereafter cannot see a price. ESLs fix that too.

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