Electronic Shelf Labels: Return on InvestmentTrideIt Retail Consulting
Future of Retail:
Prediction: By 2030 digital labels will be common place in retail to reduce growing labor costs ($15/hr) and address enviromental waste concerns.
- Growth of Electronic Shelf Labels: +16% CAGR Forecasted by 2027 16% 16%
All The Details:
You may not be sure if you should implement electronic shelf labels and may need help figuring out what vendor to go with. By the end of this the hope is that you have just the right about of information to make your decision.
Break Down The Case
Let’s talk about why you may want to do this. Ranked in order of importance.
1. Labor costs are rising and retailers should make sure labor is allocated to essential tasks.
At $15/hr with the assumption of 20 minutes per day the annual cost will be $1.8k. This could add up with a larger retail chain.
2. Will save paper costs & benefit environment
3. Will enable dynamic pricing & promotions allowing you to ensure prices are always accurate and support offers to your customer.
What’s the Cost?
Costs vary depending on a number of variables. Retailers of all sizes should be able to flex requirements to make electronic shelf labels a reality.
On the Cheap: Average retail stores in the US makes $132k/Yr in gross margin annually and cannot afford to spend $30k or 22% of margin on an expensive tech project. Well, why not do it on a shoe string? Well the solution may not work for larger businesses for your scrappy business you can try turning to Alibaba to source your electronic shelf labels by yourself. We did some homework and after contacting 5 different providers we found the project could be done for range from $3,000 to $6,000. To give you detailed view we estimated what it would cost for a small (590 products), medium (5000 products), and large grocery store (25,000 products).
With this option you will have to do more leg work with installation and will not have same level of service – but will be able to cut costs and see ROI faster. At this cost would spend more $ in order to find a quality partner.
Additionally with this option the software service/features may not be to the same standard as the “White Glove” vendors mentioned below. For example not all outsourced vendors will offer features to link prices to your ecommerce business. However, these outsourced vendors are trusted globally and are great option on a budget.
This quote assumes small labels, and all software/hardware. Additional labels or bigger sizes could increase your cost.
White Glove Service: Do you have a larger budget and require quality service? Going with a US/UK based vendor will likely make your job easier and increase likelihood that your rollout is a success.
With this option you will get better features and vendors who have commited to improving their technology. You can get support from customer service as you may experience issues with your rollout.
However, the obvious tradeoff is your implementation costs are going to drastically increase. Comparing apples to apples we could expect these type of products to range from $7k-$13k for a smaller shop(ie.g., 590 tags). Similarly to the outsourced option these costs are going to scale with the business size.
What is Cost/Benefit For My Business?
Electronic Tags in Wild
Sites to Learn More
………. This site is still in construction…… So bare with us as content is built out……