Retailers Turn To Electronic Price Tags To Combat Amazon

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An example of electronic labels made by Stockholm-based tech company Pricer.

On Amazon, not only can the price of a product change from minute to minute, but you often have multiple sellers offering the same product at different products. How is a bricks-and-mortar retailer supposed to compete with that level of flexibility and agility? Not having to print out new price tags every time you tweak a price might be a start.

Bloomberg reports on the growing trend of electronic price tags, which have already been deployed at Kohl’s and Nebraska Furniture Mart, a small chain of massive home furnishing warehouse stores.

The tags not only allow for making a quick price change, but could let a retailer make price changes across multiple outlets simultaneously.

So, in theory, if Amazon or some other competitor drops their price, a retailer with one of these price tags could respond accordingly. The hope is that this could help to cut down on “showrooming,” the practice of using physical retail stores to get eyes/hands-on with a product and then going online to get it for less.

“If we have a TV for $1,200 and Amazon has it for $900, customers are going to say, what the heck, your prices are not the lowest,” David Bash, chief information officer at Nebraska Furniture Mart, tells Bloomberg, though he notes that the store limits price changes to once a day to minimize confusion for customers.

Stores could also take advantage of smartphone-based functionalities with these electronic tags, helping customers navigate rows or find items on shelves by causing tags of sought-after products to blink when the shopper approaches.

As you’d expect, it’s not cheap to change over an entire store from traditional paper/plastic shelf labels to the new-fangled electronic ones. A large retailer can end up spending in the six figures to update a single location.

“This is not an inexpensive solution,” admits a rep for Swedish company Pricer, a manufacturer of this tag technology. “It’s starting to gain a lot more interest. Over the next year or two, you’ll see a lot more retailers rolling them out.”

For stores that are frequently modifying prices or rearranging shelves, electronic tags could save labor costs in the long-run, allowing stores to cut prices to compete with online sellers. Stores could also take those employees who would have been spending their time redoing price labels and put them to work serving customers.

by Chris Morran via Consumerist