ESL SPELLS ACCURACY

MINA WILLIAMS

Eliminating price discrepancies between the shelf and the front end is the leading factor driving supermarkets to install electronic shelf labels, retailers told SN.

While some Northeastern states have governmental mandates regarding price-accuracy standards, retailers operating throughout the country are finding the consumer confidence that electronic shelf labels instill is definitely worth the price of admission. And admission can be steep, with most tags costing between $5 and $10 each for a base of 15,000 to 17,000 tags installed per store.

Said Bernard Rogan, spokesman for Shaw's Supermarkets, East Bridgewater, Mass., "The real impact is in the tremendous gain in consumer confidence."

Retailers also said they benefit from the increased labor efficiencies electronic shelf labels can bring.

"Electronic shelf labels delete a mundane and repetitive function, and those associates can take on more rewarding responsibilities," said Rogan.

He added Shaw's Connecticut units have achieved 100% pricing accuracy and no customer complaints; other units within the chain have about a 98% accuracy level.

"We expect to gain that additional 2% through electronic shelf labels," says Rogan. "Electronic shelf labels have the potential to alleviate a nuisance for our customers."

Schnuck Markets, St. Louis, tested electronic shelf labels first in a smaller-format and then a larger-format unit. "We're still testing in a large store," said Dee Wetzel, Schnuck's spokeswoman. "There are no specific results yet, and no decision on an expansion will be made until the test is complete."

At Catalano's, Highland Heights, Ohio, electronic shelf labels were installed as a test over a year ago. Electronic shelf labels have now been affixed to 95% of the operator's items. The still-in-process tag conversion of the operator's single 45,000-square-foot, 25,000-stockkeeping-unit store was an aisle-by-aisle project spread out over a six-month period.

"We are extremely happy with the system," said Richard Catalano, vice president. "We are still learning all the functions but the biggest advantage is scanning accuracy. ESLs are the greatest thing since the scanner. Our life, as an operator, is easier and our customers are happy."

To introduce customers and employees to the electronic shelf labels and the functions of the new system, Catalano's produced a newsletter. "What we wanted to get across is that this is no missile-guiding technology. The tags are simply there to use," Catalano said. The newsletter presented a history of electronic shelf labels and explained why the operator implemented them.

The store strives for 100% accuracy, and Catalano predicted that in the future every supermarket will use electronic shelf labels. "Supermarket operators try to be as technologically advanced as possible, particularly in areas where customers can appreciate the effort. Once customers realize that pricing is 100% accurate and put that together with the notion that we have brought that to them, their appreciation should transfer into loyalty."

Labor efficiencies have also been achieved at Catalano's as a result of employing electronic shelf tags, and the system has helped the operator ease the labor crunch.

"We just can't find help," said Catalano. "We used to need one full-time associate and one part-time associate just checking accuracy."

Other advantages retailers have found through using electronic shelf labels are invisible to customers. There is a single data entry, which virtually eliminates errors at the shelf when a label is not removed or replaced. The cost of production of paper tags is eliminated as well.

Also, the stationary nature of electronic shelf labels -- locked into place on the rail -- offers up added advantages in such adhesive-hostile environments as the freezer case.

Other ESL functions retailers are exploring include order management, out-of-stock alerts, strategic pricing, shelf management and promotion.

Catalano's said it is looking into tying its electronic shelf labels to its preferred-shopper program. Ball's Price Chopper, Kansas City, Mo., is reportedly considering a similar move.

"While we have not yet put to use the promotional aspects [of electronic shelf labels], the inventory-control functions have been a big assistance," said Rogan. "Facings can easily be checked while walking the aisle identifying what is there and what should be there. Daily downloads ease reordering and planograms can be readily conformed to."

These additional benefits of electronic shelf labels make for a better operating store, said retailers. Shelves appear tidy, facings are accurate, and uniformity throughout a chain is boosted. "Despite all these other benefits, price accuracy is the be all and end all," said Rogan.

"It's amazing, when we have conducted consumer tests, they don't see a major difference between paper tags and electronic ones," he said. "The format is similar to the paper tag in layout. There is additional depth to the sticker when it is presented in a three-dimensional electronic shelf tag. And there is a screen."