Four Reasons Why On-Demand Shelf Labeling is So in Demand by Retailers Right Now

Slow and steady will not win the race (for sales) in the “now economy”. Plus, pre-printed labels and labor-intensive laser printing make your stores prone to costly pricing errors.

A female retail associate prints a new price tag for a shoe box using a mobile printer
by Tim Kane
November 27, 2019

As a retailer, you spend a lot of time and effort determining – and adjusting – your pricing strategy for every single product on your shelves. You collaborate with your suppliers to determine fair market value. You constantly re-evaluate market demand and, of course, do your best to stay in step with your competitors, lowering prices as much and as often as needed to drive greater demand, as long as those drops don’t result in unrecoverable losses, of course.

You also do what you can to keep your supply chain costs in check and absorb unexpected expenses when possible. You want to offer as much value as possible to your customers, and passing costs incurred from rising tariffs, taxes and other operating expenses onto customers is not a preferred business practice. But sometimes it’s unavoidable, which means there are times when you have to raise retail prices to maintain margins that will keep you in business.

At the end of the day, no matter which direction your prices need to move, you need a certain level of agility to execute these time-sensitive pricing adjustments.

And therein lies the problem with most shelf labeling systems used by retailers and grocers today.

Today’s pricing changing rhythm is far from, well, rhythmic. Even if you do your best to maintain a steady cadence, the unpredictability of market dynamics often necessitates sporadic updates. If you’re employing the right technology on the back end to continuously analyze the market, recommend pricing actions and distribute the guidance to your stores, then it’s possible for your pricing strategy to be efficiently managed at the governing level. The challenge is that the burden of pricing volatility extends far beyond the corporate office or even your supply chain.

Stores have been struggling with pricing compliance for a while now. Making sure that every tag on the thousands of products on their shelves reflects the latest pricing guidance has always been a beast of a task, even for big box retailers. (Or, should I say, especially for big box retailers.) They, along with grocers, have maintained a decades-old tradition of weekly ad deals. Which means every Wednesday or Sunday, depending on their cycle, at least some product prices have to be updated in back-end systems and on store shelves. However, these aren’t the only times that prices may need updating.

Many retailers are feeling immense pressure to execute “Amazon-paced” pricing adjustments to remain competitive – a task far easier to accomplish via their online channels. Deploying associates on every aisle to consistently alter in-store shelf pricing is just not efficient or cost effective, even if they have enough employees to allocate to this laborious task and the confidence that it can be done with 100 percent accuracy.

Although, to be fair, pricing changes aren’t really any easier for smaller convenience stores to manage. They may only have to worry about a fraction of the product volume compared to larger grocers or retailers, but they simply aren’t staffed to execute pricing changes as a daily or even weekly exercise. This is what the retail industry seems to be moving toward – even in store – thanks to e-commerce’s dictating force. (Or, for grocers, the decades-old tradition of weekly ad deals.)

To put it simply, the value of traditional shelf-edge labeling has expired and on-demand shelf labeling systems are now in high demand.

The need for greater speed is just one reason why:

1. The Price is Right…Or Is It?

Zebra’s latest Shopper Vision Study revealed that 60 percent of shoppers cite prices as the most important characteristic of their favorite retailers. This means the price better be right: both from a competitive standpoint and, then, a tagging perspective. Without printers by their side, it’s too easy for your associates to become distracted and price the wrong items. On top of that, your price check and/or point-of-sale (POS) systems may not reflect the price updates—not good for the customer experience. Any kind of discrepancy can make shoppers disgruntled and lead to one of two things: an abandoned purchase or a time-consuming investigation by your associates into the inconsistency, which may or may not close the sale in the end.

2. Pricing Updates are a Man vs. Machine Competition…Who Do You Think Will Win Every Time?

Sure, your shelf-edge labeling system may save you some capex, but it’s spiking your opex. Consider these stats: a big box retailer can make up to 1,667 price changes per day. A giant eCommerce retailer? Approximately 2.5 million price changes. Their (not-so-secret) secret? It’s not the sophisticated pricing algorithms they use to determine those 2.5 million changes. It’s their speed in actually making them.  

After your store associates have spent hours sorting through the labels they received in the mail (which I’m going to address in a minute), they often spend days searching for the products and making price updates. All the while, your customers are comparing prices with your competitors online and – thanks to mobile apps – even in store. If your shelf price isn’t reflecting your newly-lowered price and you’re not the lowest-priced option, you could lose a sale. (Not every customer thinks to request an online price match or wants to hassle with it when lines are long at the register. They’ll just walk out instead.) That is why it is imperative that your stores have the means to modify shelf prices with speed.

3. Store Associates Need to be Able to Receive and Apply Pricing Changes in Real Time, Right?

You know the routine. Your corporate office or third-party analyst determines the pricing strategy for your products and mails pre-printed pricing shelf labels to your stores. But that is far from conducive with the operating tempo required to stay relevant in the “now economy.” Some customers tell us it can take several days to print those labels and actually get them in the mail. Then the store still has to accept them, assign them to employees for sorting and then allocate labor to make the swaps. We just covered the many issues with the speed of that process for this application. Given the lead time required to plan and execute this pre-printed pricing model, it is very likely that the prices may have technically changed once again on the back-end before the last batch of updated labels even made it on the shelf.

Just one more reason why an on-demand shelf labeling system is moving from a luxury investment to necessity status.

4. Who Doesn’t Want to Reduce Waste?

Pre-printed and laser-printed prices are wasteful (of paper and people’s time). Wasted paper from tags that are tossed before they ever make it on the shelf also impact the planet. But what most retailers are now realizing is that laser-printed shelf labels lead to paper-thin margins.

Perhaps you’re using a laser printer to output prices on 8.5” x11” paper and inserting those pages into plastic pockets adhered to shelves. While this system may appear to be cost effective, it’s not. It can spike your expenses—with the high cost of toner, laser label forms, wasted paper and pricey maintenance contracts. And that figure doesn’t even include the cost of your associates repeatedly walking back and forth from the sales floor to the office to print—time that would be better spent with your customers.

Clearly, the in-store pricing management methods you used yesterday (really, for years) are now working against you. So, where do you go from here?

The Simplest Way to Stay on Top of Pricing is to Move to an On-Demand Shelf Labeling System

I realize that people will likely be performing somewhat-manual pricing changes in brick-and-mortar stores for some time still. It doesn’t always make financial or operational sense for stores to implement digital price tags, especially if you follow a more seasonal merchandising strategy. But it does make sense to mobilize your associates with technology tools that will enable them to update prices in less time and with less effort. Productivity is king, even when it comes to pricing management.

The good news is that the investment required to implement an on-demand shelf-labeling system is quite minimal in the scheme of things. A relief, I’m sure. I know your customers aren’t the only ones with price sensitivities right now.

The primary components include mobile computers (which you probably already have in store), mobile printers and the right (certified) supplies.

Pricing managers can instantly push pricing adjustment notifications to store associates equipped with the handheld mobile computers. Once acknowledged, the associate can use the device for guidance to the exact product location. (This is where an augmented reality application comes in really handy.) After the product location is verified, the associate can use a mobile printer to immediately create the new price tag and apply it to the shelf. In a matter of minutes – or seconds, depending on the associate’s proximity to the product – the price is changed. This is a mere fraction of the time it would take using any other shelf labeling method. And it’s a far less frustrating process for associates. As my colleague Mark Thomson said in one of his blogs: “Happy employees lead to helpful employees, which results in happy customers.”

Plus, with on-demand shelf labeling, associates are standing directly in front of products while making price changes—minimizing the chance for errors. The result? Greater consistency between marked-down merchandise and POS systems and increased price accuracy for all items. All of which elevate customer satisfaction and help you retain sales.

All around, on-demand shelf labeling is a win-win – and one of the smartest investments retailers can make right now. Especially when you compare the widespread financials and savings it will deliver against the losses you’re experiencing each day you continue to use pre-printed labels or labor-intensive laser tags.

If you’d like to learn more about how on-demand shelf labeling could work within your retail environment, or if you are ready to mobilize your associates with technology-based tagging tools, feel free to reach out or leave me a message in the Comments section below.

###

We want to know…

How many different pricing changes do you have to manage each day, week or month? Do you think an on-demand shelf labeling system could pay off for you?

Share your thoughts in the Comments section below.

null
Tim Kane
Tim Kane is a retail solutions industry consultant for Zebra Technologies. In this role, he identifies industry trends that may impact Zebra’s retail and hospitality customers. He and his colleagues then develop strategies that embrace and leverage change and empower customers to creatively utilize leading edge technology and service solutions to enhance business critical systems, leading to distinct competitive advantages.



































































    A Time to Celebrate!

  • by: Your Edge Blog Team
  • July 30, 2019
  • Meet Some of the Zebras (and Zebra Technology Solutions) That Have Been Honored in the First Half of 2019 for Their Exceptional Contributions to Global Industries and Communities