Digital shelf labels are small screens that attach to retail shelves, enabling retailers to update prices and product information in real time.
- The tags integrate with back-end systems, allowing employees to update prices or promotions instantaneously.
- Tags are also responsive via mobile apps, lighting up when employees need to restock or when customers are looking for a product.
- This speeds up the time it takes for employees to restock or fulfill online orders and makes it easier for customers to navigate the store.
While not new, the retail technology is gaining traction as retailers look to bring more digital technologies in-store.
- In June, Walmart announced it would implement digital shelf labels at 2,300 stores by 2026.
- Regional grocer Hy-Vee followed suit in July, sharing it would adopt digital shelf tags for over 230 of its stores.
- Aldi will deploy Instacart’s Carrot Tags in-store as part of its expanded partnership with the grocery intermediary.
- Whole Foods, Amazon Fresh stores, and Midwestern grocery chain Schnucks also use digital shelf tags, according to NPR.
Digital shelf tags are also attracting the attention of the US government.
- US Senators Elizabeth Warren and Bob Casey asked Rodney McMullen, chairman and CEO of The Kroger Co., in a letter for clarification on the retailer's use of digital shelf labels.
- The letter says the tags enable Kroger or other retailers to implement dynamic pricing, which they could use to “squeeze consumers to increase profits.”
- The Senators asked for a response by August 20. In a statement to Progressive Grocer, a Kroger spokesperson said, “Any test of electronic shelf tags is to lower prices more for customers where it matters most. To suggest otherwise is not true.”
The bottom line: Digital shelf tags are a useful tool for retailers to streamline operations and enhance the customer experience. But retailers must be cautious of the role they play in their pricing strategy—or risk further scrutiny.
- The US Federal Trade Commission has launched two investigations regarding pricing this year—the first into how companies set different prices for consumers based on location or other data, and the second into why grocery prices have remained high despite retailer costs going down.
- Vice President Kamala Harris is reportedly planning to take on grocery price gouging in her first 100 days as president if she wins the election, per Politico.
- Retailers may also respond negatively to pricing changes. Over two-thirds (68%) of US adults somewhat or strongly agree that dynamic pricing is price gouging, according to a March 2024 CivicScience survey.
This was originally featured in the Retail Daily newsletter. For more retail insights, statistics, and trends, subscribe here.