Case Study

Electronic Shelf Labels Take Guesswork Out of Shopping

By Ric Manning, The Courier-Journal

The days when a supermarket shopper could read the price of an item right on the package disappeared more than 10 years ago with the arrival of laser scanners and universal product codes.

The change was a good move from the store's point of view. Grocers no longer had to pay employees to apply price stickers to thousands of items, and they could quickly adjust prices when wholesale prices changed or to match a competitor's sale.

Shoppers may like the way scanners produce detailed receipts and faster checkout, but they are often suspicious that those beans marked two for $1.49 on the shelf might be going through the checkout register at two for $1.79.

Bob Doll, owner of Doll's Market, thinks he might have the answer to some of his customers' concerns.

The store is believed to be the first in Kentucky to install Electronic Shelf Labels, a system that ensures that the prices on the shelf are always in sync with the prices at the checkout counter.

LCD Displays Replace Paper Labels
The system uses small LCD displays mounted on the shelves in place of prices printed on paper or cardboard labels. Doll's has about 10,000 of the devices installed covering more than 80% of the store's inventory.

Electronic shelf labels post prices at Doll's Market.

The devices are connected through a radio transmitter to the store's inventory computer. When store manager Tony Drake wants to cut 7 cents off the price of a jar of mustard, he enters the new price in the store's computer. In about 30 seconds, the new price appears on the shelf label and in the store's registers. Drake said the new labels have eliminated about 20 to 30 hours each week that employees spent posting new paper price labels on the shelves.

The labeling system also allows customers to do comparison shopping and the store to promote special sales. Each label has a button that changes the display from the full price to the price per ounce or pound. The labels can also be programmed to show the difference between a regular price and a sale price.

Drake said Doll's changes about 5,000 prices every week to adjust for wholesale costs and puts sale prices on as many as 500 items featured in the store ads. A sale price also can be programmed to match the same start and end dates published in the ads.

Developed by IBM and Telepanel Systems
The system was installed by Fleming Co., an Oklahoma-based distributor that provides much of Doll's inventory. Dane Babcock, Fleming's technology specialist, said the system was developed by IBM and Telepanel Systems Inc., a Toronto company that makes the shelf labels.

The system has been installed in about 250 stores in the United States, Babcock said. Many are small, independent markets like Doll's, but some are larger store chains.

"There's a buyer for a store in Texas who can sit at his desk and make a deal for product, then punch it into his computer and change the shelf prices at 30 stores 1,000 miles apart," Babcock said.

Babcock said some stores are experimenting with other technology that can make grocery shopping more convenient. One device is an electronic pen that can read bar codes on product labels. Another experiment uses a device that looks like a portable cellular phone that can track each item that shoppers place in their carts. "You don't have to check out; they just box everything up and hand you the bill," he said.

Doll said his new system will help make home shopping more feasible. The same price list stored in the market's computer can be posted on the Internet.

Doll said the system will also help his small market remain competitive with grocery giants like Kroger and Winn-Dixie. "Anything that an independent can do to separate themselves from chain stores is an advantage," Doll said.

For more information: Fleming Co., Tel: 405-840-7200; Telepanel Systems Inc., Tel: 416-497-0878