Best Buy Bets on Digital Price Labels
Best Buy continues to transform its business and in-store experience with the addition of digital price labels to 240 stores.
After quietly testing electronic shelf labels and digital shelf-edge solutions from Sweden-based Pricer over three years, Best Buy has graduated from the pilot stage through a recent large-scale rollout. The partners initially had staged a 60-store pilot just ahead of the 2017 holiday season. Last May, Pricer announced a nearly $30 million order covering 150 stores, following up just a month later with an order for approximately 30 more stores worth another $5 million. Deliveries began during the third quarter and were expected to be completed by the end of 2018.
Fast forward to today, with ESLs in 240 Best Buy stores — some 20% of the company's U.S. footprint — allowing the company to more accurately manage thousands of labels across stores from a single location, ensuring prices are displayed correctly and aligned across sales channels.
“In a shopping environment where more and more customers shop both online and in physical stores, having the ability to quickly update prices in our stores is very important,” Nicole Nelson, vice president of pricing and merchandising analytics at Best Buy, said in a media release. She added that having ESLs in place substantially frees-up employees’ time, allowing them to focus more on serving shoppers rather than changing paper price tags, as well as to get important real-time product information like inventory status.
Elevating the role of its “Blue Shirt” store employees is a huge component of Best Buy's 2020 strategy. When the retailer introduced a new logo in conjunction with a brand refresh and supporting marketing campaign last May, it was meant to zero in on (among other things) the interaction between employees and shoppers as a way to differentiate the retailer through personalized customer service.
At a time when Best Buy wants its store associates to boast a more customer-facing, hands-on role, alleviating a task as time-consuming as physically changing price tags makes sense. A blog post from market research firm Gap Intelligence's "mind the gap" blog estimated that "even the smallest Best Buy locations devote up to 40 labor hours each week to price tag management, equaling almost 2,000 labor hours a year" and predicted that the ESLs should save Best Buy $10 million or more in merchandising labor costs alone during the first year (not to mention price tag printing/shipping savings).
Best Buy isn’t alone on this journey. Many retailers have been experimenting with digital price tags. Take Amazon, which is using digital price labels in its 4-Star store to display most of the information available on a typical online product page including a product’s price (and price for Prime members), rating and how many customer reviews it has.
Best Buy’s ESLs can display similar information, as well as:
- product features, such as the video resolution, zoom capabilities and screen size of a Sony camcorder, for example.
- customer reviews that are updated nightly.
- warranty information accompanied with a QR code scannable for more details.
- the price and availability of both new and open-box versions of the product on the same label, which can help reassure shoppers skeptical of an open box item's quality.
Best Buy has been pushing shelf-edge innovation since at least 2010, when it took the lead on mobile integration by added QR codes to the fact tags in all U.S. stores, becoming the first national retailer to embrace the use of mobile devices during shopping trips.
As the price of adoption drops for digital shelf-edge technology, there is even more potential for innovative usage. Other ideas presented by solution vendors include:
- partnering with brands to promote products.
- offering online promotions in stores.
- pushing personalized offers using location-based Bluetooth technology.
- bringing online sales and Prime Day-style deals to stores.