Electronic shelf label

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Electronic shelf labels in Tokyo

An electronic shelf label (ESL) system is used by retailers for displaying, typically on the front edge of retail shelving, product pricing on shelves that can automatically be updated or changed under the control of a central computer server. [1]

Contents

A shelf label with electronic paper display E-Ink-Preisschild.jpg
A shelf label with electronic paper display

ESL tag modules use electronic paper (e-paper) or liquid-crystal displays (LCDs) to show the current product price to the customer. E-paper is widely used on ESLs as it provides a crisp display and supports full graphic images (typically only black and white) while only needing power during updates, and no power to retain an image. A communication network from the central computer server allows the price display to be automatically updated whenever a product price is changed, in contrast to static paper placards. Wireless communication is needed and must support appropriate range, speed, and reliability. The means of wireless communication can be based on radio, infrared or even visible light communication. [2] Currently, the ESL market leans heavily towards radio frequency communication.[ citation needed ]

History

Early product

An early system first offered for sale by National Cash Register (NCR) in 1997 used modulated backscatter of radio waves to provide two way wireless communications between the labels and the store’s radio network. By using modulated backscatter, the labels confirmed receipt of price changes (along with battery and display status) without the need for an active radio transmitter, thus saving cost and increasing battery life to over 5 years. [3]

First generation: LCD and infrared communication

7-segment LCD ESL tags use a display similar to how a calculator displays the numerical values. The numerical value to display on the tags itself are then shown based on activating different combinations of these seven bars and segments. A disadvantage of using a liquid crystal display tags is difficulty in displaying certain letters. [4] The communication technology used for the transmitter to connect to the label is through diffused infrared communication. The values on the LCD tags are established by infrared bouncing off of surfaces. However, the speed of transmission is heavily compromised due to the data compression of each data packets from the transmitter. [5] Another disadvantage is that LCDs need power to retain an image.

Second generation: e-paper and infrared or radio communication

Electronic paper (e-paper, electronic ink, or e-ink) describes a technology that mimics the appearance of ordinary ink on paper. An e-paper display is made up of multiple capsules in a thin film with electrodes placed above and below the capsule film, and when a electric charge is applied to an individual electrode, the color particle moves to either the top or bottom of the capsule, allowing the ESL to display certain intensities of color within the capsule. [6] E-paper generally uses an infrared or radio communication network to communicate from the central transmitter to the tags. Typically, low frequency radio transmission is used for tags, but the radio transmission has a disadvantage of a low bandwidth that makes it difficult to show complex segmented images. [5]

Third generation: geo-location and product finder

As of 2016, the current generation of ESL use e-paper display technology and radio communications, integrated with existing retail technologies such as electronic article surveillance, digital signage, and people counters. Once retailers upload a floor plan of the sales area into the label-management software, consumers can be automatically tracked (in real time) through the network of people-counting devices, or via their personal Bluetooth devices. This allows the software to determine the consumer's position within the store and subject the consumer to targeted, customized marketing initiatives, such as discounts, or individual pricing. [7]

General principles

Concept display of the connection between the label management software, communication station, and terminal display in a mock-up retail environment Concept map of ESL.jpg
Concept display of the connection between the label management software, communication station, and terminal display in a mock-up retail environment

A typical ESL utilizes ultra-low-power CPU and wireless communication solutions to meet low power of low cost constraints in order to displace the high number of static shelf labels required in an average retail store.

ESL consists of three components:

  1. Label management software: Responsible for the configuration of the system, configuration of the properties on the label itself, and to store the database for the list of prices. The software mainly covers the network management, file systems, and transmission of data. [8] Also processes and packs the data of product information and the prices configured into packets of information. The data packets are then sent to the communication station via wireless network. Typically, a centralized software that is responsible for the building of and maintenance of the network for the data communication between the label management software and the terminal display. [9] [10]
  2. Communication station: Responsible for the stability and reliability of transmittance through a long distance from the label management software to the label. [9] [10] The wireless communication must support application range, speed, battery life, and reliability. The means of wireless communication can be based on radio, infrared or even visible light communication. Currently, the ESL market leans heavily towards radio frequency based ESL solutions.
  3. Terminal display: Functions as a receiver from the communication station to display the price configured from the label management software. [9] [10] The terminal display label will then act based on the instructions that was given in the data packets. [9]

Hardware design

ESL hardware design generally includes the circuit design of the communication station and the terminal display label. The typical chipset used to perform the basic functional requirement of ESL's is the TI MSP432 or a solution from Silicon Labs. Typical communication between the communication station and the terminal display label is controlled by a RF module, the general protocol for RF module uses CC2500 with a communication distance of upwards to 30 meters. [9] For terminal display, it can be displayed via electronic ink, electronic paper or liquid crystal display.

Software design

An ESL software API is included in the bluetooth 5.4 specification permits a 7-bit group identifier of 8-bit unique ESL ID's allowing for a total of 32,640 ESL's to be allocated for one bluetooth ESL network. [11] Multiple bluetooth ESL networks would be necessary in the same location to cover typical grocery store ESL applications. [12]

Usage

Electronic shelf labels are primarily used by retailers who sell their products in stores and are usually attached to the front edge of the retail shelves and display the price of the product. [1] Additional information such as stock levels, expiration dates, or product information may also be displayed as well, depending on the type of ESL. [13]

Benefits

Automated ESL systems reduce pricing management labor costs, improves pricing accuracy and allows dynamic pricing. Dynamic pricing is the concept in which retailers can fluctuate pricing to match demand, online competition, inventory levels, shelf-life of items, and create promotions. [14] Some advantages of using electronic shelf labels are

  1. Accurate pricing: Prices on shelves are updated on time and on demand to match with price files on the label management software from a link between the in store point of sale processor and the label management software. This will increase pricing accuracy to avoid branding issues revolving around price integrity. As a result, decreasing the lost revenue from undervalued items, as consumers generally alert staffs of overpriced items, and not the inverse. [15]
  2. Cost savings: As opposed to traditional pricing labels, whenever prices are changed and updated; employees will no longer require to print out labels and manually replace them in the shelf tags. With ESL, this eliminates the need to visit each shelf and make changes as all changes are made in the label management software and updated to the labels digitally. This saves retailers on the materials and labor in producing and replacing printed tags, and offer the ability to update prices dynamically on demand. [16] [17]
  3. Product finder: Retailers are able to integrate each ESL tags with an external application to offer wayfinding capability for their products. A customer can input the product they are looking for either through a developed mobile application from the retailer, or through an external digital signage to direct the customer to the product's location. [18]
  4. In store heat map: Some ESL providers integrate with Bluetooth Low Energy-enabled devices to track the movement of consumers and how long they remain at a particular location. This is done by displaying an image of the floor plan of the store on the label management software with a heat map showing locations of hot spots based on the detection of responses from high traffic areas through Bluetooth. [19]
  5. Regulate stock levels: Inventory management is crucial for retailers. Inventory information may be displayed on ESL through connection with the point of sale processor. Additional information the ESL can display is an expected date on when the stock will refill on the shelf. ESL will also be able to display a quick response code to allow consumers to easily find the item online, or for retailers to display relevant product information to their consumers. [20]

Disadvantages

While there are benefits to ESL, it is not without its flaws. Some disadvantages of using electronic shelf labels are:

  1. Error propagation: As ESL are controlled by a label management software that regulates all ESL within a store or throughout an entire chain of company, any erroneous or undervalued price entered into the label management software will be reflected through the entire retail chain.
  2. Inability to quantify return on investments: Due to the large volume of ESL a retailer will need for their stores, the initial investment cost for a store could be marginally high. This along with the inability to quantify whether consumer experience were improved during shopping due to the implementation of ESL makes it difficult to quantify the return on investment of ESL. [21]

The global ESL market throughout 2027 is forecast to grow more than 16% CAGR. [22] [23] The wide range of users ranges from grocery stores, hardware stores, sports equipment, furniture, consumer appliances, and electronic and gadgets. Forecast growth is primarily due to reduction in pricing over time. [24] [25]

With the rapid increase in the inclusion of Internet of things technology in the retail industry, over 79% of retailers in the North America alone expect to invest in ESL and people counters. 72% of these retailers in North America have plans to reinvent the supply chain management through adoption of ESL in their stores, thereby accelerating the market growth of ESL. Further studies show that Europe currently dominates the ESL market in terms of size, with over one-third of the total market share in 2017, due to the strong presence of domestic and multinational retailers in the region, Diebold Nixdorf AG, and Displaydata. [26] However the market in APAC is expected to grow at the highest CAGR within the forecast period. The ESL market in the APAC region is segmented into territories with significant market potential, China, Japan, Australia, Singapore, South Korea, and the rest of the region. [27] Additionally, growth focuses on the expansion of large scale retailers in the region. [28] A study led by ABI Research states the global ESL market could reach US$2 billion by 2019(actual achieved marketshare in 2019 of $631 million), but a further study led by Fortune Business Isights expect the ESL market to reach $2.85 billion by 2027. [29] [30]

Related Research Articles

E-commerce is the activity of electronically buying or selling products on online services or over the Internet. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. E-commerce is the largest sector of the electronics industry and is in turn driven by the technological advances of the semiconductor industry.

<span class="mw-page-title-main">Retail</span> Sale of goods and services

Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is the sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholesaler, and then sells in smaller quantities to consumers for a profit. Retailers are the final link in the supply chain from producers to consumers.

<span class="mw-page-title-main">Consumer electronics</span> Electronic products for everyday use

Consumer electronics or home electronics are electronic equipment intended for everyday use, typically in private homes. Consumer electronics include devices used for entertainment, communications and recreation. These products are usually referred to as black goods due to many products being housed in black or dark casings. This term is used to distinguish them from "white goods" which are meant for housekeeping tasks, such as washing machines and refrigerators, although nowadays, these would be considered black goods, some of these being connected to the Internet. In British English, they are often called brown goods by producers and sellers. In the 2010s, this distinction is absent in large big box consumer electronics stores, which sell entertainment, communication and home office devices, light fixtures and appliances, including the bathroom type.

<span class="mw-page-title-main">Point of sale</span> Time and place where a retail transaction is completed

The point of sale (POS) or point of purchase (POP) is the time and place at which a retail transaction is completed. At the point of sale, the merchant calculates the amount owed by the customer, indicates that amount, may prepare an invoice for the customer, and indicates the options for the customer to make payment. It is also the point at which a customer makes a payment to the merchant in exchange for goods or after provision of a service. After receiving payment, the merchant may issue a receipt, as proof of transaction, which is usually printed but can also be dispensed with or sent electronically.

<span class="mw-page-title-main">Near-field communication</span> Radio communication established between devices by bringing them into proximity

Near-field communication (NFC) is a set of communication protocols that enables communication between two electronic devices over a distance of 4 centimetres (1.6 in) or less. NFC offers a low-speed connection through a simple setup that can be used for the bootstrapping of capable wireless connections. Like other proximity card technologies, NFC is based on inductive coupling between two electromagnetic coils present on a NFC-enabled device such as a smartphone. NFC communicating in one or both directions uses a frequency of 13.56 MHz in the globally available unlicensed radio frequency ISM band, compliant with the ISO/IEC 18000-3 air interface standard at data rates ranging from 106 to 848 kbit/s.

<span class="mw-page-title-main">Online shopping</span> Form of electronic commerce

Online shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser or a mobile app. Consumers find a product of interest by visiting the website of the retailer directly or by searching among alternative vendors using a shopping search engine, which displays the same product's availability and pricing at different e-retailers. As of 2020, customers can shop online using a range of different computers and devices, including desktop computers, laptops, tablet computers and smartphones.

<span class="mw-page-title-main">Fast-moving consumer goods</span> Products that are sold quickly and at a relatively low cost

Fast-moving consumer goods (FMCG), also known as consumer packaged goods (CPG), are products that are sold quickly and at a relatively low cost. Examples include non-durable household goods such as packaged foods, beverages, toiletries, candies, cosmetics, over-the-counter drugs, dry goods, and other consumables.

<span class="mw-page-title-main">Digital signage</span> Sub-segment of electronic signage

Digital signage is a segment of electronic signage. Digital displays use technologies such as LCD, LED, OLED, projection and e-paper to display digital images, video, web pages, weather data, restaurant menus, or text. They can be found in public spaces, transportation systems, museums, stadiums, retail stores, hotels, restaurants and corporate buildings etc., to provide wayfinding, exhibitions, marketing and outdoor advertising. They are used as a network of electronic displays that are centrally managed and individually addressable for the display of text, animated or video messages for advertising, information, entertainment and merchandising to targeted audiences.

<span class="mw-page-title-main">Verifone</span> Multinational point-of-sale equipment manufacturer

Verifone, Inc. is an American multinational corporation headquartered in Coral Springs, Florida. Verifone provides technology for electronic payment transactions and value-added services at the point-of-sale. Verifone sells merchant-operated, consumer-facing and self-service payment systems to the financial, retail, hospitality, petroleum, government and healthcare industries. The company's products consist of POS electronic payment devices that run its own operating systems, security and encryption software, and certified payment software, and that are designed for both consumer-facing and unattended environments.

Smith Micro Software, Inc., founded in 1982 by William W. Smith, Jr., is a developer and marketer of both enterprise and consumer-level software and services. Headquartered in Pittsburgh, Pennsylvania, Smith Micro maintains multiple domestic and international offices. United States locations include Aliso Viejo, California, and Pittsburgh, Pennsylvania. International offices are located throughout Europe and Asia. Currently, the company focuses on digital lifestyle solutions and security technologies, and is integrated into the evolving wireless media industry, as indicated by partnerships with cellular service providers such as Verizon Wireless, AT&T, and Sprint Corporation, now owned by T-Mobile US after the Sprint & T-Mobile merger in April 2020.

<span class="mw-page-title-main">Retail marketing</span> Economic concept

Once the strategic plan is in place, retail managers turn to the more managerial aspects of planning. A retail mix is devised for the purpose of coordinating day-to-day tactical decisions. The retail marketing mix typically consists of six broad decision layers including product decisions, place decisions, promotion, price, personnel and presentation. The retail mix is loosely based on the marketing mix, but has been expanded and modified in line with the unique needs of the retail context. A number of scholars have argued for an expanded marketing, mix with the inclusion of two new Ps, namely, Personnel and Presentation since these contribute to the customer's unique retail experience and are the principal basis for retail differentiation. Yet other scholars argue that the Retail Format should be included. The modified retail marketing mix that is most commonly cited in textbooks is often called the 6 Ps of retailing.

<span class="mw-page-title-main">Dynamic pricing</span> Pricing strategy

Dynamic pricing, also referred to as surge pricing, demand pricing, or time-based pricing, and variable pricing is a revenue management pricing strategy in which businesses set flexible prices for products or services based on current market demands. It usually entails raising prices during periods of peak demand and lowering prices during periods of low demand.

Checkpoint Systems is an American company that specializes in loss prevention and merchandise visibility for retail companies. It makes products that allow retailers to check inventory, quicken the replenishment cycle, prevent out-of-stocks and reduce theft. Checkpoint offers Electronic Article Surveillance (EAS) radio frequency solutions for retail, high-theft and loss-prevention solutions, RFID hardware, software, and labeling capabilities.

Return fraud is the act of defrauding a retail store by means of the return process. There are various ways in which this crime is committed. For example, the offender may return stolen merchandise to secure cash, steal receipts or receipt tape to enable a falsified return, or use somebody else's receipt to try to return an item picked up from a store shelf.

Inventory management software is a software system for tracking inventory levels, orders, sales and deliveries. It can also be used in the manufacturing industry to create a work order, bill of materials and other production-related documents. Companies use inventory management software to avoid product overstock and outages. It is a tool for organizing inventory data that before was generally stored in hard-copy form or in spreadsheets.

In business and marketing, “trade” refers to the relationship between manufacturers and retailers. Trade Promotion refers to marketing activities that are executed in retail between these two partners. Trade Promotion is a marketing technique aimed at increasing demand for products in retail stores based on special pricing, display fixtures, demonstrations, value-added bonuses, no-obligation gifts, and more.

<span class="mw-page-title-main">Shelf-ready packaging</span> Form of product packaging

Shelf-ready packaging (SRP) and retail-ready packaging (RRP) refers to the packaging of a product so that it is delivered to a retailer in packaging which is optimized for efficient stocking and sale.

<span class="mw-page-title-main">EM Microelectronic</span> Swiss semiconductor manufacturer

EM Microelectronic, based in Marin, La Tène near Neuchâtel in Switzerland, is a developer and semiconductor manufacturer specialized in the design and production of ultra low power, low voltage integrated circuits for battery-operated and field-powered applications in consumer, automotive and industrial areas. It is a subsidiary of The Swatch Group.

<span class="mw-page-title-main">Discount sticker</span> Method of marking reductions in price

Discount stickers are a price markdown that are used to alert shoppers to goods which have been reduced in price, such as food approaching its sell-by date or inventory in discount clothing or outlet stores. Some stores, especially discount clothing stores, have been accused of using discount stickers to create the impression of price markdowns when there is none.

Robomart is an American technology company headquartered in Santa Monica, California that builds autonomous smart shops for cafes, ice cream parlors, and quick-service restaurants. The company’s white label platform gives retailers the option to expand their footprint at a significantly lower cost than traditional brick-and-mortar real-estate.

References

  1. 1 2 Europe, SoluM. "What is an ESL System?". SoluM Europe. Retrieved 2023-06-27.
  2. ↑ Park, Jin-Soo; Jang, Byung-Jun (January 2016). "Electronic shelf label system employing a visible light identification link". 2016 IEEE Radio and Wireless Symposium (RWS). pp. 219–222. doi:10.1109/RWS.2016.7444409. ISBN   978-1-4673-9806-0. S2CID   35881432.
  3. ↑ Evans, James G.; Shober, R. Anthony; Wilkus, Stephen A.; Wright, Gregory A. (Autumn 1996). "A Low-Cost Radio for an Electronic Price Label System". Bell Labs Technical Journal. 1 (2). Institute of Electrical and Electronics Engineers (IEEE): 203–215. doi:10.1002/bltj.2025. ISSN   1089-7089. S2CID   42370048.
  4. ↑ Woodford, Chris. "How do calculators work??". Explain that Stuff. Retrieved 2018-11-27.
  5. 1 2 Wei, Derrick; Petitgrand, Fabien (January 24, 2014). "Wireless Technology for ESL System". Europshop Tradefair. Archived from the original on November 27, 2018. Retrieved November 27, 2018.
  6. ↑ Primozic, Ursa (2015-03-05). "Electronic paper explained: what is it and how does it work? - Visionect". Visionect. Retrieved 2018-11-27.
  7. ↑ Park, Jin-Soo; Jang, Byung-Jun (January 2016). "Electronic shelf label system employing a visible light identification link". 2016 IEEE Radio and Wireless Symposium (RWS). pp. 219–222. doi:10.1109/RWS.2016.7444409. ISBN   978-1-4673-9806-0. S2CID   35881432.
  8. ↑ Ma, Yin-ping (September 2017). "Design of Electronic Shelf Tag System Based on Simpliciti" (PDF). International Journal of Engineering and Applied Sciences. Retrieved November 27, 2018.
  9. 1 2 3 4 5 Zhou, Chun Hui; Mei, Pan; Huang, Li Wen; Liu, Ke Zhong; Wen, Yuan Qiao (September 2013). "An Electronic Shelf Label System Based on WSN". Advanced Materials Research. 765–767: 1718–1721. doi:10.4028/www.scientific.net/AMR.765-767.1718. ISSN   1662-8985. S2CID   56384623.
  10. 1 2 3 Europe, SoluM. "What is an ESL System?". SoluM Europe. Retrieved 2023-06-27.
  11. ↑ "Bluetooth 5.4 Technical Overview" (PDF).
  12. ↑ Malito, Alessandra. "Grocery stores carry 40,000 more items than they did in the 1990s". MarketWatch. Retrieved 2023-06-27.
  13. ↑ "The Rise of Electronic Shelf Labels". Retail Intelligence Lab. Retrieved 2018-11-27.
  14. ↑ Dilip, Soman; N-Marandi, Sara (2010). Managing Customer Value: One Stage at a Time. Singapore: World Scientific. p. 275. ISBN   9789812838285 . Retrieved 15 July 2014.
  15. ↑ Woods, J.; White, A.; Roster, J. (February 4, 2003). "Merchandise and Price Optimization Will Justify ESLs" (PDF). Gartner Research. Retrieved November 27, 2018.[ permanent dead link ]
  16. ↑ Smallheer, Jason. "Electronic Shelf Labels; Technology Boosting Sales at USI". Archived from the original on 2018-11-27. Retrieved 2018-11-27.
  17. ↑ "Supermarkets examining electronic shelf-edge labeling to cut costs, not for 'surge pricing' | V3". v3.co.uk. Retrieved 2018-11-27.
  18. ↑ "Displaydata's New Electronic Shelf Label Interacts With Shoppers - 2016-02-16 - Page 1". rfidjournal.com. Archived from the original on March 16, 2016. Retrieved 2018-11-27.
  19. ↑ "Displaydata's New Electronic Shelf Label Interacts With Shoppers - 2016-02-16 - Page 2". rfidjournal.com. Archived from the original on April 26, 2016. Retrieved 2018-11-27.
  20. ↑ "There's More to Electronic Shelf Labels than Pricing". Supply & Demand Chain Executive. Retrieved 2018-11-27.
  21. ↑ Sachdev, Ameet. "Is price right for e-shelf labels?". chicagotribune.com. Retrieved 2018-11-27.
  22. ↑ "Electronic Shelf Label (ESL) Market to hit $1bn by 2024: Global Market Insights, Inc". GlobeNewswire News Room. Retrieved 2018-11-26.
  23. ↑ "Electronic Shelf Label Market Size, Share, Growth | Global Report, 2030". www.fortunebusinessinsights.com. Retrieved 2023-06-27.
  24. ↑ Journal, RFID. "ESLs Are Becoming More Affordable For Retailers - 2006-10-04 - Page 1". rfidjournal.com. Archived from the original on August 25, 2014. Retrieved 2018-11-26.
  25. ↑ Europe, SoluM. "Shelf Labeling 101: How Much Do Electronic Price Tags Cost?". SoluM Europe. Retrieved 2023-06-27.
  26. ↑ Consulting, ResearchFox. "Electronic Shelf Label (ESL) Market Worth 620 Million USD by 2021". prnewswire.com (Press release). Retrieved 2018-11-26.
  27. ↑ Markets, Research and. "Electronic Shelf Label Market 2017 - Global Forecast to 2023: Transformation of the Retail Industry From Manual to Automated Operations Present $1.42 Bn Opportunities". GlobeNewswire News Room. Retrieved 2018-11-26.
  28. ↑ "Third of retailers expanding through APAC - Inside Retail". Inside Retail. 2018-09-13. Retrieved 2018-11-26.
  29. ↑ "Electronic Shelf Labels Revenues to Reach US$2 Billion by 2019".
  30. ↑ "Electronic Shelf Label Market Size, Share, Growth | Global Report, 2030". www.fortunebusinessinsights.com. Retrieved 2023-06-27.
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