Electronic Shelf Labels (ESL): The Complete Guide for Retailers

Electronic shelf labels, usually shortened to ESL, replace the paper labels on the shelf edge with small digital displays. The price is taken directly from the till or ERP system, so what the shelf says matches what the customer pays at the checkout. In this guide we look at how the technology works, what it delivers and what to consider before introducing it in your store.

What are electronic shelf labels?

An electronic shelf label is a battery-powered display fitted to the shelf edge where the paper label used to be. Most labels use e-paper, the same kind of screen found in an e-reader. E-paper only draws power when the image changes, which is why the batteries last a long time.

A label can show far more than a price:

• Regular price and promotional price
• Unit price per kilo, litre or item
• The lowest price in the previous 30 days when a price is reduced
• Item number, barcode and location
• A QR code linking to a product page, recipe or further information
• Symbols for things such as organic or new products

Labels come in a range of sizes, from small versions for cosmetics and spices to larger formats for chilled counters, DIY stores and electronics. Some also have colour displays and an LED that can flash.

How the technology works

An ESL system is built from three main parts.

1. The software

The software receives item and price data from the till system, the ERP system or a file. This is also where you decide how the labels look: templates with fonts, colours and which fields to display. The software can run in the cloud or on a local server.

2. Base stations

Base stations, sometimes called access points, are mounted in the ceiling and communicate wirelessly with the labels. They connect to the store network. How many you need depends on the size of the store, the height of the shelving and how much metal and glass there is in the premises.

3. The labels

Each label is linked to an item, usually by a member of staff scanning the label's barcode and the product's barcode with a handheld device. When the price changes in the system, the new information is sent out via the base station and the label updates.

The benefits of ESL

The right price on the shelf

For many stores the biggest gain is that the shelf price and the till price are always the same. That reduces the risk of incorrect prices, disputes at the checkout and remarks during inspections.

Less manual work

Printing, sorting and swapping paper labels takes time, especially when a promotion starts. With electronic labels this happens automatically, and staff can spend their time on customers, replenishment and other tasks.

Promotions that start on the minute

Promotional prices can be scheduled to switch exactly when a campaign starts and ends. That makes it easier to run short offers, weekend prices or the same campaign across several stores at once.

Support for picking and replenishment

Labels with an LED can flash to show where a product is located. This is useful when picking online orders and click and collect, when restocking, or when staff need to find items that require attention.

Better information for customers

With QR codes and clear unit prices, customers get more information right at the shelf. In stores with many similar products, that can make choosing easier.

Less paper

Fewer printouts and less paper waste is a side effect many stores appreciate.

Integration with POS and ERP systems

For ESL to deliver its full value, the labels need to be connected to wherever your prices are actually managed. Common set-ups include:

• Connection to the till system: price changes at the till are sent to the shelf automatically.
• Connection to the ERP system: items, promotions and unit prices come from the same source as the rest of the range.
• Connection to the online shop: the same price in store and online, which matters more and more to customers.
• Import via Excel or CSV: for stores without a system integration, it is often possible to upload a file with items and prices.

Before choosing a solution, map out the systems you use today, who owns the price data and how often prices change. That determines how the integration should be built.

What affects the cost?

The cost of electronic shelf labels varies considerably from store to store, and there is no general price that is right for everyone. These are the factors that usually matter most:

• Number of labels: how many items and shelf positions need labelling.
• Size and type: small or large labels, black and white or colour, with or without an LED.
• Store size and layout: affects how many base stations are required.
• Integration: a standard connection to a common till system is simpler than a bespoke solution.
• Software: licence or subscription, cloud or on-premises.
• Installation: fitting shelf rails, labels and base stations, ideally outside opening hours.
• Service and support: monitoring, replacing faulty labels and help when something goes wrong.

The best way to get an accurate picture is a store visit where the range, shelving and systems are reviewed together.

Things to consider before introducing ESL

• The network: base stations need a stable connection. Review the network before installation.
• The shelving: check that the shelf edges suit the label mounts or whether new rails are needed.
• Routines: decide who links labels to items, how new products are added and how you follow up labels that do not respond.
• Templates: spend time creating clear templates with unit prices and promotional information.
• Rollout: in a chain, it is sensible to start with a pilot store and then roll out to the rest.

How StoreIQ can help

StoreIQ supplies, installs and looks after electronic shelf labels for stores across Sweden. We start with a store visit where we review your range, shelving, network and till system. You then receive a clear proposal with a set-up and a quote.

We are happy to install in the evening or overnight so the store can stay open as normal, we connect the labels to your existing systems and we follow label status in StoreIQ Hub. With a service agreement, you have one contact for all your store technology. Get in touch if you would like to see how ESL would work in your store.