Has there been a more competitive era in grocery retailing? I can’t think of one.
Just look at some of the trends that are changing things up a gear: Discounters are challenging established brands; basket sizes are falling as consumers shop locally; online competition is growing (Amazon’s flexing its muscles) and there’s a constant ‘price war’ underway as grocers push every day low pricing.
In the face of all of that, grocers need to find a way to price-match competitors, reduce costs, and deploy their price and promotion strategies with speed and agility. Electronic Shelf Labels (ESLs) that allow retailers to change prices on one shelf, or thousands of shelves, anywhere, in seconds can help. The labels can also show promotions, stock levels, currency conversions, produce origins, sell by dates, operational information to staff and more.
Here’s 5 ways ESLs can keep grocers competitive, and, improve customer service.
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Increase sales: ESLs can increase sales in a variety of ways particularly through the display of eye-catching promotions. Also, using our Bluetooth-enabled ESLs offers can also pop up on customers’ smartphone apps based on their location and context. We typically see sales increase by up to 6% when ESLs are installed, and an increase in margin of 2-3%.
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Slash waste: Every year the US throws away a third of its food and grocers account for 10% of that waste[1]. In the EU around 88 million[2] of tonnes of food is thrown away annually. Although most of that’s by consumers, supermarkets account for around 5%[3]. One of the reasons why stock becomes out of date is that retailers may not be able to spare enough staff to manually markdown pricing throughout the day and not just at the end of the day. ESLs remove that constraint making it easy to make limitless price changes and graduate price drops as the sell-by date nears to both encourage people to buy stock, and, defend margins.
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Achieve every day low pricing: Two of the biggest reasons why our grocery customers deploy ESLs is to price match competitors, and, react at the drop of a hat to trends spotted by their analytics systems. Indeed, 7% of retailers currently update their prices once a week, whereas 53.4% want to be making changes daily on in real-time[4].
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Promote healthy food: There’s an increasing need to show the ingredients of food (e.g gluten); provide guidance on healthier options; flag food with high levels of the ‘big three’ – salt, sugar and fat – (an interesting Retail Week article talks more about this); display prices per kilo; confirm if meat is Halal; and more. The need to regularly change these details across all relevant lines is a major undertaking in time and resource. But it’s one that’s super simple when using ESLs with any label remotely changed in seconds.
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The price is right: ESLs, that are updated in real-time, build confidence in shoppers that they’re always getting the right / best price. This is especially important when you think about a big chain. For instance, if a grocer manually makes 10,000 price changes across 500 stores and there’s inaccuracies with 1% of the labels that’s potentially 50,000 miss-priced products. Our labels can communicate two-ways to confirm what data they’re showing and if changes have been made – ensuring that the price is right – and building trust with shoppers. It’s also far easier to ensure that prices are aligned across channels – in-store, online and mobile.
For more, check out this article in Retail Gazette, by our CEO, Andrew Dark, who explains how a decrease in price of just 1% throughout the day sees an increase in sales of 2.62% on average.
[1] http://www.businessinsider.com/why-grocery-stores-throw-out-so-much-food-2014-10?IR=T [2] EU [3] https://www.theguardian.com/environment/2016/jul/13/action-to-cut-food-waste-gains-momentum-across-europe [4] RIS, Pricing Intelligence Goes to War, January 2014