ESL Benefit Analysis 1: Labour

Each week we're going to call out one of the benefits of using Electronic Pricing technology; starting this week with Labour.

This is probably the most fundamental reason for deciding to implement Electronic Shelf Labels (ESLs). But within this core benefit there are multiple facets; let’s unpack it to understand exactly how this can be advantageous to retailers outside of the obvious.

1)    Management is not reliant on shop floor staff to implement price changes. This can be very important if you experience instability in your workforce from time to time as retailers often do, with people leaving, others still in the training phase, staff on sick leave etc.

Perhaps the promotional calendar is driven by head office or the overarching franchise company. These new prices must be implemented by a certain time, in order to be compliant with supporting marketing assets, such as, magazines, website, emails and in-store promotional materials.

One of our clients was finding it hard to find and retain good staff, this ultimately drove their interest in Electronic Pricing, to “Alleviate the growing pressure placed on team members at all levels”.

When pricing is managed electronically, the ‘promotional start date’ dictates when the price will show on the shelf edge. External factors have no bearing, giving management peace of mind and the head space to focus on other activities.

2)    Control over labour costs, as staff are no longer required to manage shelf pricing. Another client shared with us that “Constant fluctuations in pricing was putting pressure on staff to print out labels and update pricing manually”. Management didn’t have total control over how many price changes were required, as this was driven by external factors, such as currency exchange and head office’s promotional strategy.

Being able to plan how many staff hours you will need for the week or month; means you have tighter control over your costs and therefore your profits.

3)    Staff can focus on working directly with customers, utilising their product knowledge to advise and find the right solution for each customer query. For many businesses finding and retaining quality staff is difficult (as we touched on above). So, when you have recruited someone who has an intrinsic interest in the products being sold, whether it be DIY, technology or automotive, their job satisfaction level is going to be much higher, if they are utilising this knowledge and interest, rather than completing menial tasks, like pricing updates. Higher satisfaction means longer staff retention.

4)    Promotional activity can increase. Because, rolling out price changes via ESLs is a quick and painless process, the frequency of price changes can actually increase.

Often management have strategic ideas that cannot be implemented, as they need to keep price changes to a certain level, due to the workforce required to implement them. But, if you knew that it was as easy as inputting your new promotion into your POS (which would then push it to the pricing software and onto the electronic labels), then perhaps you would roll out that markdown of a perishable item, or price match your competitor’s latest campaign, or, even offset a rising cost with a price increase. These are just some of the examples of the many strategies that can increase sales or create higher margins.

That summarises the main ways that ‘a reduction of labour for pricing activities’ via Digital Price Tags / Electronic Shelf Labels can create business improvements, from cost and margin optimisation, to staff satisfaction and compliance.

Next week we’ll be looking at what Operational efficiencies can be gained from using an Electronic Shelf Label solution.