More and more Retailers have realized that it is essential to replace traditional price paper tags by using Electronic Shelf Labels (ESL). One common phenomenon is that retailers especially supermarkets like Walmart starts to expand the application of ESL solutions in muti stores to tackle the issue of rising labor costs and improve their operation efficiency.
There is an example of the comparison of human resources and application of ESL in supermarket made by EATACCN as below for your reference. This is to explain what ESL could bring benefits to supermarket in the long run of business.
One of our clients who owns a supermarket which has promotion event on every Saturday. They need to print 2,000 paper tags and then arrange six staffs to replace original price tags with these 2,000 new paper tags at every Friday night for preparing the promotion activities. Its normal operation business time is from 8:00 A.M to 10:00 P.M., how they could update these 2,000 price information efficiently during non-business time on Friday night?
The supermarket has 20,000 SKUs of products in total. At the beginning, they want to install 2.13 inches ESL price label at shelves, the initial phrase of investment is about 80,000 dollars (excluding the cost of gateway and accessories, rental fee of local server, installation & maintenance fees and other necessary fees). The life span for ESL price labels is lasting 5-7 years.
The average wage in Europe is 24 Euros per hour in 2024. Meanwhile, different cities in Europe have different wage levels. Currently, the weekly labor cost is 24 Euros per hour multiply 6 staffs and 10 hours and then multiply 52 weeks. So the total annual labor cost is 74,880 Euros. The currency of USD dollar and Euro are similar right now. Since ESL can be used for 5 years at least, the total labor costs for 5 years is 374,400 USD dollars while the cost of 20,000 ESL is 80,000 dollars. Comparing the cost of ESL solution with labor costs in 5 years, it seems that our ESL solution is much cheaper than labor costs. As a result, the supermarket can reach break-even point at second year after the investment of ESL solution. And maybe it will generate positive effect from 3rd to 7th year.
By applying ESL solution, the supermarket could release some burden operation costs, including labor costs, printing and labeling costs. Also, they can improve operation management efficiency. Meanwhile, they can manage all price information for other stores of supermarkets. By utilizing POS integration with ESL system, it is easier for them to transmit data between POS system and ESL system synchronously. In sum, we believe that our client can organize more promotion events for more products to enhance sales turnover rate by applying our ESL solution.
Post time: Jan-10-2025