It’s a bit of an understatement to say that technology has changed retail. In reality, technology has created nothing short of a revolution, from the big stuff like eCommerce to smaller, now-common trends like self-checkouts and buy online, pick up in-store.
Another area where technology is revolutionizing retail is on the shelf, quite literally: smart shelves. More retailers today are using a variety of tools to improve this aspect of the in-store shopping experience, both for themselves and for their customers.
But what are smart shelves? And how does this technology impact pricing? Let’s find out.
What Are Smart Shelves?
Smart shelves are a grouping of technologies that provide new features and functions to the traditional store shelf. Our usual shelf is just that—a shelf. It holds products on it, plus a pricing label or maybe some advertisements. Smart shelves, on the other hand, incorporate digital signage, RFID technology, weight sensors, and other gadgets to elevate the shelf into a holistic, multi-purposed selling tool.
This can be achieved in a few ways, including:
- Weight sensors and RFID tags to monitor on-shelf availability and inventory levels, then communicate that data directly to store associates.
- Digital displays for pricing, advertisements, and other information.
- Sensors to measure shelf temperature (useful for food and beverage products).
- Trackers to measure product positioning, store performance, product performance, and other details.
- Augmented reality technology for interactive and customizable marketing displays.
Simply put, smart shelves provide additional data and tools for retailers to create more engaging, effective shelves. For this blog, we want to talk more about the pricing implications of smart shelves. As we mentioned, this technology can be used to display prices—but what does that mean for you?
Smart shelves incorporate digital signage, RFID technology, weight sensors, and other gadgets to elevate the shelf into a holistic, multi-purposed selling tool.
Are Smart Shelf Pricing Labels The Future?
Digital pricing labels are becoming more popular across retailers. These displays can show the list price for one product or all different variants. Plus, it can display discounts and promotions above these list prices to catch the eyes of passing shoppers.
According to the Global Smart Shelves market report, published in Research And Markets, the global smart shelves market is predicted to reach $7.1 billion by 2026, up from $1.8 billion in 2020. The report gives a few reasons as to why, including inventory management, automation, and COVID-19. The pandemic, specifically, has forced retailers to be more proactive about in-store conditions, while better connecting their online channel with their physical one to ensure a seamless shopper experience.
Pricing is also greatly benefitted by a digital retail environment. As we all know, prices change often online, sometimes even every few seconds depending on the marketplace. Software helps manage all this, giving brands and retailers the power to monitor competitor prices, create pricing strategies, and reprice, among other positives.
In-store, however? There are more challenges.
In-Store Pricing Barriers
The first, most obvious challenge to pricing in-store is the physical price tag or display. This is something that has to be written out or designed and printed, then store associates must go aisle to aisle to swap out pricing displays with updated information.
This is a time-consuming process and makes it tough to update prices at the same speed as online. As a result, online and in-store prices can end up mismatched, leading to a confusing omnichannel shopping experience. It can also deter retailers from repricing as often, losing out on the competitive edge automatic repricing gives sellers.
So that’s a longer process to change prices, less agile repricing, and a lack of connection to online prices. In addition, in-store pricing can be harder to audit, measure, and test than online. A good pricing strategy is one that is fine-tuned by the market, and that means testing different strategies. You then have to measure the results of those tests and audit prices to ensure they’re accurate to your plan. In-store? You need field teams, reps, or store associates to go in and report on pricing. This is one more area where it’s not as seamless as online.
You can take data coming in from the shelf and use that information to inform your overall pricing strategies.
Benefits of Smart Shelves For In-Store Pricing
Smart shelves—and the digital pricing signage that comes along with them—can change in-store pricing for the better.
For starters, it can address most of the concerns listed above:
- It is much quicker to reprice when you can update a digital sign instead of a physical one.
- It gives brands and retailers more options to reprice, especially based on time.
- It can sync with online channels to ensure the same price is available online and in-store (or that the prices are working together as part of a pricing strategy).
You’ll still want to have someone manually check the condition of these displays, however. That’s one area that is roughly the same whether using smart shelves or traditional pricing displays. This could be field teams, store associates, brokers, or mystery shoppers, but broken displays can lead to a whole new set of problems.
Furthermore, the fact that smart shelves can connect to other sales systems and tools opens up a new avenue of communication between the customer, the shelf, and the seller. You can take data coming in from the shelf (this price sold a greater number of units than that price) and use that information to inform your overall pricing strategies. You can get this real-time data to dynamically reprice SKUs on any channel, in-store or online. This is yet another tool to present the right price at the right time.
Technology Is Here to Stay
There’s no going back with technology in retail. Every day brings new advancements, more tools, and unique ways of doing things. Smart shelves are no different—retailers will continue to push the boundaries of this technology to find better ways to sell.
Therefore, smart shelves have had a major impact on pricing. They present a new opportunity to build in-store pricing strategies that are as responsive as online, plus create a more seamless omnichannel shopping experience where in-store and online prices work together. That, integrated with all the other benefits and use cases for smart shelves, means physical stores get another tool to drive up sales and keep shoppers happy.