What Are Electronic Shelf Tags Used For?

Walk into a modern pharmacy at 3 PM on a Tuesday, and you might notice something subtle: the price displayed on the shelf matches exactly what rings up at checkout. Behind this seemingly simple consistency lies a wireless network of digital displays that update thousands of prices simultaneously, eliminate manual tag changes that once consumed 50+ hours per week, and connect physical stores to their digital twins in real-time. Electronic shelf tags transform retail shelves from static price holders into dynamic information hubs—and their applications extend far beyond just showing numbers.

The Core Value: Real-Time Pricing Accuracy That Builds Customer Trust

Price integrity forms the foundation of every retail relationship. When customers see one price on the shelf but pay another at checkout, trust erodes and complaints multiply. Electronic shelf tags eliminate this disconnect entirely.

The electronic shelf labels make it easy to ensure shelf pricing is the same at the POS, thanks to integration with cloud platforms. A pricing update transmits to labels and cash registers simultaneously, creating perfect synchronization across every touchpoint. This precision prevents the revenue leakage that occurs when items are underpriced—customers generally alert staff of overpriced items, but not the inverse.

Consider the operational reality: Retailers implementing 1,400 price changes on Monday in less than 10 minutes, where before that would have taken four days. The speed advantage compounds when dealing with perishable goods, competitive pressures, or promotional campaigns that need immediate activation across multiple locations.

The financial impact becomes measurable quickly. Independent retailers report ROI periods ranging from 1.5 to 3.5 years, with the payback coming from three primary sources: eliminated labor costs for manual tag printing and placement, reduced paper and printing supply expenses, and strengthened margins through dynamic pricing capabilities that respond to inventory levels and demand patterns.

Three Foundational Pillars Supporting ESL Implementation

Pillar 1: Operational Efficiency Through Labor Reallocation

The manual process of updating paper price tags represents a significant operational burden. Store associates must print tags, sort them by location, walk every aisle, locate the correct shelf position, remove old tags, and install new ones. For stores implementing thousands of weekly price changes, this becomes unsustainable.

Employees spend 80% less time on paper tag updates on average once a store switches to ESL. This efficiency gain doesn’t eliminate jobs—it redirects human capital toward higher-value activities that enhance the customer experience.

Take the case of Green Valley Medical Supplies, a mid-sized healthcare supply distributor with 12 locations across the Southeast. Before implementing electronic shelf tags in their retail showrooms, their three pricing specialists spent 35 hours weekly updating approximately 8,000 product tags across their warehouse and retail space. Post-implementation, those same specialists now manage pricing updates in less than 6 hours weekly while dedicating their reclaimed time to vendor negotiations and margin analysis—activities that directly strengthen profitability.

The efficiency extends beyond pricing. The “Stock to Light” feature allows an associate to flash an LED light on the shelf tag using their mobile device, signaling locations that require attention. This capability accelerates shelf replenishment by eliminating the time spent searching for specific product locations, particularly beneficial for new employees or during high-turnover periods.

For e-commerce fulfillment, the “Pick to Light” feature guides directly to the products needed for online orders, speeding up the picking process and improving order accuracy. Retailers deploying “click and collect” or same-day delivery services find this functionality essential for maintaining competitive fulfillment speeds.

Pillar 2: Dynamic Pricing Strategies That Optimize Revenue

Static paper tags force retailers into rigid pricing structures. Once a tag prints and reaches the shelf, changing it requires physical labor. This friction prevents retailers from implementing responsive pricing strategies that adjust to real-time conditions.

Electronic shelf tags remove this barrier entirely. Prices can adjust based on time of day, inventory levels, competitive moves, weather patterns, or upcoming expiration dates—all executed from a central management system.

Sunrise Organics, a 45-location grocery chain specializing in local produce, implemented electronic shelf tags specifically to address food waste from perishables. Their system now automatically reduces prices on items within 48 hours of expiration, implementing a tiered discount structure: 15% off at 48 hours, 25% off at 24 hours, and 40% off on the final day before removal. This automated markdown strategy reduced their produce waste by 28% in the first year while maintaining margin targets through increased volume on marked-down items.

The technical infrastructure enabling this flexibility centers on API integrations between the label management software, inventory systems, and point-of-sale platforms. Retailers can adjust prices instantly based on demand, inventory, or external factors through the centrally managed software that can control the price structure store-wide, location-wide, and even nationwide.

Data from the electronic shelf labels market, valued at $2.34 billion in 2024 and projected to reach $4.18 billion by 2029, registering a CAGR of 12.3% during the forecast period, demonstrates how rapidly retailers are embracing this capability. The growth reflects not just adoption by large chains, but increasing penetration into mid-market retailers who recognize the competitive necessity of pricing agility.

Pillar 3: Enhanced Customer Experience Through Information Access

Modern shoppers demand more than price information. They want nutritional details, sustainability credentials, product reviews, inventory availability, and promotional eligibility—all at the moment of decision.

Traditional paper tags cannot accommodate this information density. Electronic shelf tags with multi-page display capability and NFC/QR code integration transform the shelf edge into an information portal.

ESL can show more information besides the price, such as nutritional facts, price per weight, and remaining stocks. Customers comparing products can access detailed specifications without searching for a store associate or pulling out their phone to research online.

Patterson & Associates, a professional accounting firm supply store serving CPA firms across three states, deployed electronic shelf tags across their office supply showrooms. They programmed the labels to display not just pricing, but also compliance information (whether items meet specific regulatory standards), bulk discount thresholds, and reorder numbers that customers can reference when placing phone orders. The multi-page display capability allowed them to show product specifications on page one, pricing on page two, and cross-selling suggestions on page three.

The sustainability angle resonates with environmentally conscious consumers. Traditional paper shelf tags create significant waste, with one grocery aisle alone having hundreds of labels that need frequent updates. Electronic shelf tags using e-paper technology consume power only during updates, with some models operating on solar power to eliminate battery replacement entirely.

The Food Industry Association revealed that 24% of food retailers surveyed are currently using Electronic Shelf Labels and 29% plan to use them in the future, indicating mainstream adoption is accelerating beyond early-adopter phases.

Technical Foundation: How ESL Systems Operate

Understanding the technical architecture helps retailers evaluate whether electronic shelf tags align with their operational requirements and existing infrastructure.

Hardware Components

The physical system comprises three essential elements:

1. Electronic Shelf Tag Displays

There are two main display technologies utilized by electronic shelf labels: Primarily known as e-paper or electric ink, EPDs use a tiny amount of electricity to mimic the appearance of ink on paper. E-paper technology provides high contrast readability even in direct sunlight, retains the displayed image without power consumption, and delivers battery life extending 5-10 years depending on update frequency.

Alternative display technologies include LCD screens, which support video and animation but require continuous power, and segmented displays that limit content flexibility but offer lower costs for basic price-only applications.

Screen sizes range from 1.6 inches (suitable for small items like cosmetics) to 11.6 inches (ideal for end-cap displays or promotional features). Screen size options ranging from 1.6 to 11.6 inches display critical product information with paper-like 180-degree viewing angles that maintain readability regardless of customer position.

2. Communication Infrastructure

Most of the Electronic Shelf Labels are based on radio frequency communications, operating on a predefined frequency ranging from sub 1 GHz, 2.4 GHz, and 433 MHz. The frequency selection impacts coverage area and penetration through obstacles.

Sub-1 GHz radio provides the largest coverage area and best penetration rates, making it suitable for large-format stores with metal shelving and refrigeration units that can block signals. Bluetooth Low Energy protocols allow faster, more efficient connections requiring minimum energy consumption, though their shorter range makes them ideal for smaller stores only.

Gateway devices installed throughout the store act as communication bridges between the central management system and individual labels. Each access point can cover up to a 30,000 sq ft radial area and manage 10,000 tags, though actual coverage depends on building materials and shelf configurations.

3. Central Management Software

The software platform serves as mission control, handling label assignment, content design, pricing synchronization, and system monitoring. Cloud-based platforms enable multi-location management from any internet-connected device, while on-premise solutions provide retailers with full data control and reduced ongoing subscription costs.

Integration capabilities with existing retail systems prove essential. The platform must connect with point-of-sale systems, inventory management databases, and enterprise resource planning software to automate pricing updates and ensure data consistency.

Installation and Configuration

Deploying electronic shelf tags requires systematic planning:

Installation involves unpacking the ESLs and initializing them to make sure they all work properly and there are no glitches or errors. Labels attach to shelves using adhesive backing, clips, or rail systems depending on existing shelf configurations.

Installation of communication gateways or access points requires a complete survey of the store to ensure maximum coverage for each access point—usually a 25-meter radius. Professional installers map signal strength throughout the facility, identifying dead zones and adjusting gateway placement accordingly.

Rollout speed has accelerated as vendors refine their processes. Implementation times have improved, with recent deployments up and running in 1.5 days as teams add more stores and optimize their procedures.

Strategic Implementation Framework

Successful electronic shelf tag deployment requires moving beyond technical specifications to address organizational readiness, workflow integration, and change management.

Pre-Implementation Assessment

Quantify Current Pricing Labor

Document the actual time staff spend on pricing activities: printing tags, sorting by location, placing on shelves, and resolving pricing discrepancies. Many retailers discover they’re dedicating far more labor hours to pricing than budget allocations suggest.

Calculate the fully loaded cost including wages, benefits, printing supplies, and opportunity cost from associates pulled away from customer service. This baseline becomes essential for ROI projections.

Evaluate Pricing Change Frequency

Retailers implementing fewer than 100 weekly price changes may struggle to justify ESL investment through labor savings alone. Those executing thousands of changes find the business case compelling. High-velocity categories—fresh produce, perishable dairy, promotional items—benefit most dramatically from automated updates.

Assess Technical Infrastructure

Current network capabilities matter. Retailers with robust WiFi coverage throughout their facilities may leverage existing infrastructure. Those with limited wireless capability need to factor communication gateway costs into their budgets.

Point-of-sale system compatibility determines integration complexity. Modern cloud-based POS platforms typically offer straightforward API connections, while legacy systems may require middleware or custom development.

Phased Rollout Strategy

Starting with a pilot location provides valuable learning before fleet-wide deployment.

Select an Appropriate Test Store

Choose a location representing your typical format but with staff capable of providing detailed feedback on system performance and workflow impacts. Avoid extreme outliers—neither your highest-volume flagship nor a struggling location with operational challenges.

Define Success Metrics

Establish quantifiable KPIs: pricing update time reduction, labor hours saved, pricing accuracy rate at audit, customer complaints related to pricing discrepancies, and markdown effectiveness on perishables. Measure baseline performance before implementation, then track weekly progress.

Duration and Learning Period

Allow 90-120 days in pilot mode. The first month focuses on technical stability and staff training. Months two and three reveal operational improvements and uncover unexpected benefits or challenges. This timeframe provides sufficient data for confident scaling decisions.

Cross-Functional Training Requirements

Electronic shelf tags alter workflows for multiple departments:

Store Operations Teams need hands-on training with the label management interface, understanding how to initiate price updates, design promotional displays, and troubleshoot common issues like labels displaying error codes or failing to update.

Merchandising Staff must learn how to use multi-page displays effectively, designing content that communicates product information clearly while maintaining brand standards. They’ll need guidance on color usage conventions (red for clearance, yellow for promotions) and information hierarchy principles.

IT Support requires deep technical knowledge of the communication infrastructure, gateway management, API integrations, and troubleshooting connectivity issues. They’ll handle software updates, security configurations, and database synchronizations.

Beyond Retail: Expanding ESL Applications

While grocery stores and mass merchants dominate current adoption, electronic shelf tags are finding applications across diverse sectors.

Healthcare Facilities

Hospitals improve life-saving communication between caretakers, patients, and their families through electronic shelf tags that ensure crucial information is always current and visible. Medical supply rooms use ESLs to track expiration dates, lot numbers, and usage instructions, reducing medication errors and improving compliance with safety protocols.

Automotive Parts Distributors

Parts retailers face constant pricing fluctuations based on supplier costs, competitor moves, and seasonal demand. Electronic shelf tags enable them to match online competitors’ pricing in real-time while maintaining consistent margins through dynamic adjustments. The ability to display multiple part numbers and cross-reference information on a single tag improves counter staff efficiency.

Pharmacies

Prescription pricing, insurance co-pay variations, and generic alternatives create complex labeling requirements. Electronic shelf tags can display cash prices, common insurance co-pays, and savings program information simultaneously, helping customers understand their options before reaching the counter.

Office Supply Stores

Business customers value detailed product specifications, bulk pricing thresholds, and compatibility information. Multi-page ESL displays accommodate these requirements while enabling rapid promotional activations for contract pricing or special events.

Cost-Benefit Analysis: Making the Investment Decision

Electronic shelf label providers typically charge $11-12 per label, creating substantial upfront investment for retailers with extensive SKU counts. A store with 20,000 SKUs faces initial costs around $220,000-$240,000 for the labels alone, plus gateway hardware, installation labor, software licenses, and integration services.

Quantifying Returns

Labor Savings

The most direct benefit comes from eliminated pricing labor. A retailer spending 50 hours weekly on manual price changes at $18/hour fully loaded wage rate saves $46,800 annually. Over a three-year period, that represents $140,400 in labor cost avoidance.

Paper and Printing Expense Elimination

Walmart indicated they could cut back on paper waste by 40 percent through ESL deployment. For a typical grocery store printing 2,000 price tags weekly, elimination of paper, ink, and printer maintenance saves approximately $8,000-$12,000 annually.

Margin Improvement Through Dynamic Pricing

The less tangible but potentially more significant benefit comes from strategic pricing capabilities. Retailers can implement time-based promotions, respond to competitive moves within minutes, and optimize clearance pricing on perishables to reduce waste while maintaining margin targets.

Independent retailers predict ROI will come in 1.5 to 2.5 years, with 50% from reduced labor and paper supplies, and dynamic pricing driving higher margins making up about 16% of the ROI.

Hidden Costs to Consider

Network Infrastructure Upgrades

Facilities lacking adequate wireless coverage need gateway installations, potentially requiring electrical work and network cabling that adds $15,000-$30,000 to implementation budgets.

Ongoing Subscription Fees

Cloud-based management platforms charge monthly or annual licensing fees, typically $500-$2,000 per location depending on feature sets and label counts.

Battery Replacement Cycles

While manufacturers advertise 5-10 year battery life, actual longevity depends on update frequency. High-velocity pricing categories may require battery replacement every 3-4 years, creating ongoing maintenance expenses.

Training and Change Management

Staff training, workflow documentation, and the productivity dip during transition periods represent real costs that many retailers underestimate during initial planning.

Addressing Common Implementation Challenges

Connectivity Reliability

Signal interference from metal shelving, refrigeration units, and concrete walls can create communication dead zones. Retailers must conduct thorough site surveys before gateway placement to ensure comprehensive coverage.

When connectivity issues arise post-installation, systematic troubleshooting helps identify root causes: adjusting gateway positions, increasing gateway density in problem areas, or switching communication protocols to frequencies that penetrate obstacles more effectively.

Staff Resistance to Technology Change

Employees comfortable with manual processes may view ESL implementation as threatening their job security. Transparent communication about labor reallocation plans—emphasizing that saved time will redirect toward customer service rather than headcount reduction—helps build buy-in.

Involving store-level staff in pilot testing and soliciting their feedback on system usability creates advocates who champion adoption when rollout expands to additional locations.

Display Visibility Under Varied Lighting

Ensure ESL displays are easily readable for all customers under different lighting conditions by prioritizing high-contrast display options, with black text on white backgrounds working best. Selecting appropriate type sizes based on viewing distance and shelf height prevents readability issues that frustrate customers.

Integration Complexity with Legacy Systems

Older point-of-sale platforms lacking modern API capabilities require middleware development to enable real-time synchronization. Budget both time and financial resources for these integration projects, which can extend implementation timelines by 6-12 weeks.

Competitive Landscape and Selection Criteria

VusionGroup (France), SOLUM (South Korea), Pricer (Sweden), Displaydata Ltd. (UK), and Teraoka Seiko Co., Ltd. (Japan) dominate the global electronic shelf tag market, each offering distinct technological approaches and feature sets.

Key Differentiators

Display Technology

Full graphic e-paper enables custom layouts, product images, and brand elements. Segmented displays limit flexibility but reduce costs for retailers prioritizing basic price information only. Four-color displays (black, white, red, yellow) support visual merchandising strategies that guide customer attention.

Communication Protocol

Radio frequency systems offer wide coverage with mature, proven technology. Bluetooth Low Energy provides simplified deployment with standard hardware compatibility. NFC-enabled tags support mobile payment integration and customer self-service information access.

Battery Life and Replacement

Up to a 10-year battery life with daily updates minimizes ongoing maintenance, though real-world performance varies based on update frequency, display type, and environmental conditions. Evaluate manufacturer claims against verified case studies in similar retail environments.

Software Capabilities

Central management platforms range from basic pricing update tools to sophisticated systems offering promotional scheduling, multi-location orchestration, customer analytics, and integration with loyalty programs. Assess feature requirements against your operational complexity.

Vendor Evaluation Process

Request demonstrations in environments resembling your facility conditions: similar lighting, shelf materials, and aisle configurations. Generic showroom displays may not reveal performance issues that arise in real retail settings.

Verify reference customers operating at comparable scale and complexity. A vendor’s success deploying ESLs in 10,000-square-foot convenience stores provides limited confidence for your 80,000-square-foot supermarket chain deployment.

Understand total cost of ownership including hardware, software licenses, installation, training, ongoing support, and upgrade paths. The lowest per-label price may not yield the most economical solution over a five-year period.

Future Trajectory: Where ESL Technology is Heading

AI-Powered Pricing Optimization

Machine learning algorithms are beginning to analyze sales velocity, competitive pricing, inventory levels, and customer demographics to recommend optimal price points in real-time. These systems will move beyond rules-based dynamic pricing to predictive models that maximize revenue per square foot.

Enhanced Customer Interaction

NFC and QR code integration is expanding to enable direct customer engagement: scanning a tag could add items to shopping lists, trigger personalized offers based on loyalty program data, or provide recipe suggestions and preparation videos.

Integration with Computer Vision

Combining electronic shelf tags with shelf-mounted cameras creates closed-loop inventory management systems. When cameras detect empty shelf space, they can automatically trigger restocking alerts and adjust online inventory availability to prevent customers from ordering out-of-stock items.

5G Connectivity

5G has a great impact on ESL market due to it can offer higher speed and lower latency, guaranteeing fast and fluent interaction between ESL systems and their control centers. Higher bandwidth enables richer content including short video clips, while reduced latency supports time-sensitive applications like flash sales activated across thousands of labels simultaneously.

Frequently Asked Questions

How long does installation typically take for a store with 15,000 SKUs?

Installation timelines depend on store size, label quantity, and technical complexity. Based on industry benchmarks, expect 2-4 days for the physical installation including label attachment and gateway setup, followed by 1-2 weeks for system configuration, product database mapping, and staff training. Experienced installation teams can work during off-hours to minimize business disruption.

Can electronic shelf tags display barcodes that store associates can scan for inventory management?

Yes, modern ESLs support barcode display including both traditional linear barcodes and 2D codes like QR codes. With the industry moving toward 2D barcodes by 2027, implementing inventory management functionality for staff-specific barcode displays provides future-proof capabilities. Associates can scan these displayed codes for receiving, cycle counts, and stock verification without requiring printed labels.

What happens if the central management system experiences downtime?

E-paper displays retain their last displayed content indefinitely without power, meaning customers continue seeing pricing information during system outages. The labels simply cannot receive updates until connectivity restores. This differs from LCD displays that require continuous power and would go blank during outages. Most vendors architect their systems with redundancy and backup servers to minimize downtime risk.

How do electronic shelf tags perform in refrigerated or frozen environments?

Specialized ESLs are available for extreme conditions, functioning in temperatures as low as -25 degrees Celsius. These cold-rated tags feature enhanced battery chemistry and display technology engineered for temperature stability. Standard ESLs function efficiently from 0°C to 40°C, covering refrigeration but requiring upgraded models for freezer deployment.

Can pricing updates target specific stores or must changes apply across all locations?

Cloud-based management platforms provide granular control over pricing by location, allowing retailers to set different prices based on competitive positioning, local market conditions, or operational strategies. You can execute pricing updates at the individual store level, by geographic region, or chain-wide simultaneously. This flexibility supports zone pricing strategies common among multi-market retailers.

Do customers perceive electronic shelf tags as enabling surge pricing or price gouging?

Some lawmakers fear that electronic shelf labels could enable grocery stores to raise prices during periods of high demand, leading to consumer backlash. However, retailers emphasize their use of ESLs for operational efficiency rather than frequent price fluctuations. Kroger stated “To be clear, Kroger does not and has never engaged in ‘surge pricing'”, using the labels instead for managing perishables and matching competitive pricing. Transparent communication about pricing policies helps address customer concerns.

Key Takeaways

Electronic shelf tags eliminate the labor-intensive process of manual price updates, with retailers reporting 80% reduction in pricing-related labor and the ability to implement thousands of price changes in minutes rather than days
Beyond pricing accuracy, ESLs enable dynamic pricing strategies that optimize margins on perishables, respond to competitive moves in real-time, and strengthen omnichannel consistency between online and in-store pricing
The technology extends beyond traditional retail, with healthcare facilities, automotive distributors, and professional service providers implementing ESLs for inventory tracking, compliance documentation, and enhanced customer information access
ROI timelines typically range from 1.5 to 3.5 years depending on price change frequency, labor costs, and dynamic pricing sophistication, with the electronic shelf label market growing at 12.3% CAGR reflecting rapid mainstream adoption

References

MarketsandMarkets – Electronic Shelf Label Market Report (2024-2029) – https://www.marketsandmarkets.com/ResearchInsight/electronic-shelf-label-market.asp
Statista – Global ESL Market Data (2024) – Various industry reports
IGA Insights – Electronic Shelf Labels Implementation Case Studies (2023-2024) – https://www.iga.com/insights/electronic-shelf-labels
Food Industry Association – ESL Adoption Survey (2024) – Referenced in multiple industry publications
CNBC – Electronic Shelf Labels Report (October 2025) – https://www.cnbc.com/2025/10/03/electronic-shelf-labels-are-taking-over-us-grocery-stores.html
US Chamber of Commerce – Digital Shelf Labels Analysis (August 2025) – https://www.uschamber.com/co/good-company/launch-pad/digital-shelf-labels-in-retail
Display Data – Electronic Shelf Labels Technical Documentation (2025) – https://www.displaydata.com/
Grocery Dive – ESL Implementation Analysis (February 2023) – https://www.grocerydive.com/news/why-more-grocers-are-putting-electronic-shelf-labels-in-their-stores/642002/
Medline – Electronic Shelf Labels Healthcare Applications (2025) – https://www.medline.com/supply-chain/electronic-shelf-labels/
Walmart Corporate Communications – Digital Shelf Labels Announcement (June 2024) – https://corporate.walmart.com/news/2024/06/06/new-tech-better-outcomes-digital-shelf-labels-are-a-win-for-customers-and-associates