Walmart applies electronic shelf labels, following in the footsteps of other supermarkets. What it means to you: NPR

An employee arranges digital price lists for vegetables at a Whole Foods store in the Silver Lake section of Los Angeles.

Patrick T. Fallon/Bloomberg via Getty Images

hide caption

caption conversion

Patrick T. Fallon/Bloomberg via Getty Images

Grocery store prices are changing faster than ever – literally. This month, Walmart became the latest retailer to announce it will replace price stickers in its aisles with electronic shelf labels. The new label allows staff to change prices as often as every 10 seconds.

“If it’s hot, we can increase the price of drinks and ice cream. If something is close to its expiration date, we can reduce the price — which is good news,” said Phil Lempert, a grocery industry analyst.

Apps like Uber already use surge pricing, where higher demand leads to higher prices in real time. Companies across multiple industries have sparked controversy by discussing implementing price increases for fast food restaurants by Wendy made the most recent headlines. Electronic shelf labels allow for a similar strategy in grocery stores, but aren’t the only reason retailers might make the switch.

The ability to easily change prices has not been mentioned in Walmart announcement that 2,300 stores will have digital shelf labels by 2026. Daniela Boscan, who participated in Walmart’s label pilot in Texas, said the main benefits of the labels are “increased productivity and reduced travel time.” , plus restocking shelves faster.

Walmart isn’t the first major grocer to make the change, as you can already find electronic shelf labels at Whole Foods, Amazon Fresh stores and the Schnucks chain in the Midwest. Digitized shelf labels are even more popular in stores across Europe.

Another feature of electronic shelf labels is the product description. Lempert notes that barcodes on new labels can provide useful details beyond price.

“They can actually be used where you take your mobile device and scan it and it can give you more information about the product – whether it’s the source of the product, whether it contains gluten or not, whether it is keto friendly or not. That’s really the promise of what these shelf tags can do,” Lempert said.

When higher salaries make Labor is more expensiveRetailers large and small can benefit from the increased productivity that digital shelf labels bring, said Santiago Gallino, a professor specializing in retail management at the University of Pennsylvania’s Wharton School.

“The bottom line, at least when I talk to retailers, is the calculation of how much labor they will save by incorporating this. And in that sense, I don’t think this is something that only large corporations like Walmart or Target can benefit from. I think smaller chains can see its potential benefits as well.”

While labels give retailers the ability to dramatically increase prices, Gallino doubts companies like Walmart will leverage the technology in that way.

“Honestly, I don’t think that’s the main cause of this situation,” Gallino said. “These are companies that tend to have long-term relationships with customers and I think the risk of letting them down might be too risky, so I would be very surprised if they tried to do that.”

Instead of seeing an opportunity to use surge pricing, Gallino said retailers may be attracted to electronic price tags to ensure consistency between online and in-store prices.

“Today, Walmart customers can check on their app when they come to the store, what prices Walmart offers online,” he said. “And if there are discrepancies, this can bring frustration or confusion to customers.”

Electronic price tags will make it easier for brick-and-mortar stores to keep up with prices as they change online. And he says that consistency is better for customers.