The Future of Shelf-Edge Pricing and What ESL Means for Retailers

ESL Future

Electronic shelf labels (ESL) are no longer an experimental gadget on a few pilot shelves, they’re a mainstream retail tool that changes how prices, promotions and shelf information are managed. For retailers the opportunity comes on two fronts: cost savings and pricing flexibility. But the switch also brings up new choices and implementation risks that need managing.

What ESLs do and why more retailers are using them

At its most basic, an ESL is a low-power electronic display (typically e-paper or E-ink) mounted on the shelf edge that updates wirelessly from a central system. Once connected to a store’s pricing and inventory systems, these tags allow thousands of price or product-information changes to be pushed in seconds rather than hours or days.

The market for ESLs is growing rapidly as retailers seek automation and better price accuracy. ESLs appear to be more widespread in Germany, France and the Nordics, especially in those countries where labour costs are high. However, the UK is catching up, especially with the discount stores and supermarkets pushing out to more locations.

What are the cost implications for ESL?

Up-front investment

  • Labels: Prices vary depending on supplier and service, depending on size and features. Larger or coloured tags cost more.
  • Gateways and software: Stores need gateways to send updates and software to manage labels. These add to the initial cost alongside installation.
  • Overall project cost: For a medium supermarket with 10,000 products, the initial spend can easily reach six figures. Exact costs vary by supplier, so pilot testing and detailed quotes are essential.

Ongoing costs

  • Battery life: Some labels last many years (some up to 10-15), keeping replacement costs low.
  • Support and licences: Expect annual fees for software, hosting and maintenance.
  • Physical upkeep: Labels may need replacing if damaged or used in harsh environments.

Savings and Return on Investment

  • The main financial benefit comes from eliminating the labour Cost
  • Printing, Printer, Printer Ink and changing paper labels.
  • Stores with frequent price changes can save thousands of pounds per year, sometimes tens of thousands, through reduced staff time and fewer pricing errors.
  • The more often prices change, the faster the payback period; retailers with frequent promotions or high SKU counts see the quickest ROI.

The advantages of using ESL

Cost savings are important, but ESLs deliver more than just savings; their flexibility can strategically change store operations and customer experience. Here are a few:

  • Faster promotions and price corrections: push regional, store-level or time-limited promotions in seconds. That reduces markdown latency and improves margin control.
  • Improved price accuracy and customer trust: pairing shelf prices to POS and web reduces pricing errors and customer disputes. That improves compliance and protects revenue.
  • Different pricing by time or event: stores can run morning/afternoon pricing, flash offers or clearance events. This gives retailers new ways to optimise sales by time or demand.
  • Better shelf data for store teams: Depending on their complexity, ESLs can display stock availability, multi-buy offers, allergen or provenance info, and can be combined with shelf sensors to alert if replenishment is needed, helping store teams keep shelves stocked and reduce lost sales.
  • Sustainability messaging: removing paper tags reduces printing and ink waste to some extent, and some retailers explicitly cite carbon and waste reductions as part of the ESG case for ESLs.

These advantages are not just “nice to have”; they change how quickly marketing, pricing and operations can respond to the market.

The disadvantages of using ESL

ESLs are feature-rich, but retailers must manage a few non-technical risks:

  • Customer perception of dynamic pricing. Without careful communication, the ability to alter prices instantly can raise concerns among shoppers who may be put off by the thought of fluctuating pricing.
  • Complex system integration. ESLs rely heavily on accurate data from POS systems. If integration is poorly managed, pricing mismatches and inventory errors can still occur, undermining the very benefits ESLs are designed to deliver.
  • Physical robustness and readability. ESLs are vulnerable to damage in busy store environments. Wet produce areas, heavy trolley traffic, or curious children can dislodge or break tags. In addition, smaller screens can make pricing harder to read.
  • Supplier lock-in and limited flexibility. Many ESL systems use their own unique technology, which means once a retailer chooses a provider, it can be hard to switch to another. This reduces flexibility and may result in higher costs over time.

How to reduce risk in an ESL rollout

  1. Choose a pilot store or category. Frequent price changes and good data quality will allow you to measure time saved, pricing accuracy and sales impact.
  2. Look at the return on investment with real store data. Use actual weekly price-change counts, local staff rates and printing costs to produce a 1-3 year payback model.
  3. Plan integration early. Engage POS and pricing teams; ensure there is a defined reconciliation process for discrepancies.
  4. Choose labels for the environment and use case. Small black and white tags are cheaper; several colours or NFC tags cost more but enable more features. Check battery claims and IP ratings with the ESL supplier
  5. Communicate with customers. If your ESLs enable dynamic or time-of-day pricing, explain how and why prices may change; transparency helps avoid negative reactions.
  6. Measure beyond staff savings: track pricing accuracy, markdown speed, stock availability at shelf, waste reductions and customer complaints to judge overall value.

Where 3rd-parties and inventory audit partners add value

A trusted inventory expert or installation partner can be invaluable during an ESL project. Typical roles include:

  • Pre-installation inventory audit to ensure SKU to shelf mapping and barcodes are all correct.
  • The installation process includes adding the rails to the racking and attaching all the digital units.
  • Ongoing shelf audits to validate that the shelf display and POS are synchronised after installation.
  • Pilot measurement and ROI validation to give an independent measurement of time saved and pricing accuracy.
  • Maintenance to replace malfunctioning or missing devices and replace batteries.

If your organisation doesn’t have the internal capacity to run a large integration project, partnering with a specialist (systems integrator, ESL supplier and an audit partner) reduces project risk and speeds time to value.

Is investing in ESL worth it?

For retailers with high SKU counts, regular promotions, reduced staffing or ambitions to run more flexible in-store pricing, ESLs are a practical, proven device for both cost savings and strategic flexibility. They are already rolling out at scale across multiple international retailers and are starting to appear in grocery and discount formats within the UK and Ireland.