ST. LOUIS -- Schnuck Markets here will test an electronic shelf label system in its new small-store format with an eye toward increasing planogram compliance and pricing accuracy.
"I think it's a tremendous beta site," said Larry Maggio, director of marketing services for Schnuck, referring to the 17,000-square-foot store, also located here. The new store, called Schnucks Express, was expected to open July 14.
Due to the significantly reduced volume of stockkeeping units -- about 12,000 SKUs, Maggio said -- the retailer would have an easier time keeping track of pricing the items electronically than if it were tested in one of the retailer's larger stores, which have almost twice as many SKUs.
The new system, which uses radio-frequency technology, runs on a central computer in the store that is connected to both the point-of-sale system and the electronic shelf labels, allowing for more accurate pricing of items.
The new ESL system uses spread-spectrum technology and the changes are communicated through a radio frequency, Maggio told SN.
The tags also store information that provides the retailer with an electronic planogram of the store, said a source familiar with the situation. The information helps ensure that the items on the shelves are aligned with the appropriate tags.
Two different size electronic tags are being used in the pilot. The large tags measure 3.25 inches in length, 1.5 inches in height and 0.6 inches in depth. The small tags measure 1.8 inches in length, 1.5 inches in height and 0.6 inches in depth.
With the new ESL system from Electronic Retailing Systems International, Norwalk, Conn., the retailer said, it is hoping to achieve 100% scanning accuracy.
"One hundred percent [accuracy] is a possibility," Maggio said, adding that 100% accuracy could not be achieved with older paper and vinyl labels. "Until you have 100%, you're still fighting for it. [Government agencies] aren't happy with 98% or 99%," he said.
The wireless ESL system is a welcome reprieve from manual pricing, said Maggio, adding that shelf labeling was an area that needed to be re-engineered.
"We kind of feel that the weekly [pricing] changeover is the most labor-intensive process," Maggio told SN, adding that the wireless system should free some of the retailer's labor force for other tasks.
The tags will just display an item's price for now, but the retailer said it would explore the possibility of promotional messages as it learns more about the tags.
Maggio said that Schnuck has been following ESL's development for years, but waited until the wireless technology developed to make the commitment to ESL. Initially, wired tags were too much trouble to reset and move when a store was modified or renovated, Maggio added.
"It [electronic shelf labels] is really the way to go," Maggio said, noting that the retailer would continually evaluate the system's progress and return on investment over the next several months.
He told SN that if all goes well over the next year, the retailer would consider expanding the system's use and place ESLs at some of its larger retail locations.