Digital Shelf Labels: Revolutionizing the In-Store Shopping Experience

Technology is transforming every aspect of our lives, and retail is no exception. In a world where customer experience is key to standing out in the market, digital shelf labels (DSLs) are emerging as an innovative solution that is revolutionizing how physical stores operate and communicate with their customers. These smart labels not only improve operational efficiency but also take the shopping experience to the next level. 

In this article, we will explore in detail what Digital Shelf Labels are, their benefits, and how Walmart is using them to redefine the retail landscape.

What are Digital Shelf Labels?

These are small electronic devices that replace paper price tags on store shelves. They use technology such as E-Ink (electronic ink), similar to what we find in e-readers, or LCD to display information such as prices, promotions and product details. These labels connect to a central system via Wi-Fi or Bluetooth networks, allowing for remote, automatic and real-time updates of the data they display.

Unlike traditional labels, DSLs are much more versatile. They not only display prices but can also provide additional information such as descriptions, available inventory and even personalized promotional messages. E-ink technology, in particular, offers excellent readability even in varying lighting conditions and consumes very little power, allowing them to operate for extended periods without needing frequent battery replacements.

Source: Walmart Press Center, June 2024

Benefits for Stores Implementing DSLs

Remote price updates

One of the main benefits of DSLs is the ability to update prices remotely. This eliminates the need for staff to manually change paper labels. This not only saves time but also allows for quick adjustments in response to changes in demand, promotions or competitive strategies. For example, during special events such as Black Friday, retailers can update thousands of prices in seconds, ensuring that promotions are accurate and synchronized across all points of sale.

Error reduction and labor cost savings

Pricing errors are a common problem in stores and can lead to customer dissatisfaction and even legal penalties. With DSLs, prices are synchronized directly with the central system, eliminating human error. Furthermore, by automating this task, staff can focus on higher-value activities, such as customer service. This shift not only improves operational efficiency but also optimizes human resources by reducing the hours spent on repetitive tasks.

Integration with inventory systems

Electronic labels can be integrated with inventory management systems to provide real-time information on product availability. This allows employees to easily identify out-of-stock items and replenish shelves more quickly, improving operational efficiency and customer satisfaction. Furthermore, this integration helps stores maintain better control over inventory, reducing losses due to stock outs or overstocking.

Dynamic pricing implementation

Dynamic pricing, common in e-commerce, can also be implemented in physical stores with DSLs. It allows prices to be adjusted based on factors such as time of day, demand or ongoing promotions, helping to maximize revenue and improve competitiveness. For example, a grocery store could lower the price of perishable goods nearing their expiration date to minimize waste. Or it could raise prices on takeout food during peak hours, such as lunchtime or before dinner, to generate greater profits. 

Channel consistency

Implementing electronic labels facilitates price alignment between physical stores and e-commerce platforms, enhancing the omnichannel experience. With DSLs, retailers can ensure that shelf prices match those shown on their digital channels in real time. This avoids confusion or discrepancies that might frustrate customers. It is especially important in strategies like “click and collect”, where consumers buy online and pick up in-store. By maintaining consistent pricing and promotions, DSLs reinforce customer trust in the brand, promoting a unified perception of the shopping experience, regardless of the channel used. 

Data analytics

Electronic labels also offer another key benefit: providing valuable information on consumer behavior and the effectiveness of implemented strategies. Maintaining consistency across all sales channels and tracking the exact moments when price or promotion changes are made, allows for more detailed, accurate and useful analyses. By combining this data with information on customer behavior in the store, the business can optimize its decision-making. 

How do they Enhance the Customer Experience?

Digital Shelf Labels not only benefit retailers but also significantly improve the customer shopping experience:

Price accuracy

Transparency is essential for building customer trust. With electronic labels, shelf prices always match those recorded at the checkout, eliminating inconsistencies that can create frustration. This accuracy not only improves customer satisfaction but also strengthens the store’s reputation as a reliable place to make purchases.

Additional product information

Many DSLs include QR codes that customers can scan with their mobile devices. In this way, they obtain additional product information, such as reviews, technical specifications or availability in other locations. This combines the convenience of e-commerce with the immediacy of in-store shopping. For example, a customer interested in an appliance can access video tutorials found on the product page simply by scanning the QR code.

Interaction and personalization

They can also facilitate more personalized shopping experiences. For example, using NFC or Bluetooth technology, labels can interact with customers’ apps to offer exclusive promotions based on their preferences or purchase history. Furthermore, LED lights integrated into these labels can be used to guide customers to specific products, enhancing the browsing experience in large stores.

Source: Walmart Press Center, June 2024

Challenges and Considerations

Although DSLs offer, as we have already explained, numerous benefits, their implementation is not without challenges. The initial installation cost can be high, especially for chains with a large number of stores. This cost includes not only the labels themselves but also the infrastructure needed to operate them, such as robust Wi-Fi networks and specialized software. However, this expense can be considered a long-term investment, given the operational savings they generate.

Another aspect to consider is security. Since DSLs depend on network connections, it is crucial to protect them against potential cyberattacks that could compromise pricing data or inventory. Stores must implement measures such as data encryption and authentication systems to ensure information security.

It is also important to train staff to ensure optimal use of this technology. This includes both the physical installation of the labels and the resolution of any technical problems that may arise during their daily operation.

Walmart as a Success Story

Walmart recently announced that it will be expanding its contract with VusionGroup, a provider of digital shelf label technology, to bring these solutions to its 4,600 stores in the United States. This decision follows the announcement made in June 2024, where the company reported that it planned to use this technology in 2,300 stores by 2026. The goal of this expansion is to improve the management of prices, inventory, orders and customer service.

In 2024, VusionGroup’s EdgeSense and VusionCloud solutions were integrated into 500 stores, achieving a successful launch that will now be accelerated nationwide. EdgeSense enables centralized and local communication with geolocation, while VusionCloud manages digital labels and IoT devices in real time.

Since 2019, Walmart has been exploring these labels to streamline price changes for its more than 120,000 products and improve the customer experience. The expanded contract with VusionGroup is valued at approximately €1 billion.

Source: Walmart Press Center, June 2024

Other companies that have successfully implemented these electronic labels in Europe include the French retail giant Carrefour, which has reported significant improvements in operational efficiency and price management; and Media Markt, which has been using DSLs for years to effectively manage its frequent price and promotional changes. 

Conclusion: Digital Shelf Labels, the Bridge between Innovation and Efficiency

Digital Shelf Labels represent a significant advance in the evolution of physical stores. By combining operational efficiency with an improved customer experience, these smart labels are a key tool for retailers seeking to remain competitive.

Although there are challenges in their implementation, the long-term benefits far outweigh the initial hurdles. As Walmart’s example demonstrates, DSLs are not just a passing trend but a transformative solution that is changing the retail landscape. 

The adoption of electronic labels in retail ensures a seamless convergence between physical and digital channels. It also establishes a standard of consistency in pricing and customer experience, elements that are increasingly critical in the omnichannel ecosystem. In this context, advanced platforms such as flipflow are positioned as a strategic pillar for real-time market analysis.

Thanks to our ability to integrate and process data from multiple sources—from e-commerce to physical stores and the global market—flipflow allows retailers to conduct a holistic analysis of their competitive environment. This approach facilitates the identification of key patterns and the extraction of actionable insights at scale, optimizing both distribution strategies and business decisions. Thus, monitoring the Digital Shelf not only redefines control over availability and prices but also becomes an essential component for leadership in an increasingly data-driven market.

Ultimately, DSLs are not just a tool for displaying prices but a step towards the retail of the future: smarter, more efficient and more customer-centric. As more retailers adopt this innovative technology, it is likely to become an industry standard, fundamentally transforming how we shop in physical stores.