The Rise of ESLs in Retail: A Solution to Pricing Integrity Challenges

We’re living in an era defined by constant change, and with it comes uncertainty. From inflation and supply chain disruptions to shifting consumer habits, retailers must adapt more quickly to an increasingly dynamic environment. Digital displays are already commonly used in restaurants, gas stations, and other commercial settings where price volatility exists. However, scaling digital technology to a retail or grocery store wasn’t possible until the invention of the electronic shelf label (ESL).

With any new technology, concerns arise that abusive practices may be adopted, such as price gouging or predatory pricing that targets specific individuals. Anyone who has ever booked an airline ticket online has experienced the unpleasant effects of algorithmic pricing adjustments. Consumers and policymakers are concerned that this type of practice will spread to everyday items, such as clothing and groceries. Will retailers adopt surge pricing? Can shoppers trust that the pricing they see on the shelf is the same price other shoppers see? There's a growing body of evidence that ESLs actually help build brand trust through pricing accuracy and integrity.

The Benefits of ESLs

Worldwide, the adoption of ESLs is growing at double-digit rates. These small, digital displays replace paper price tags to enable retailers to run more frequent promotions, manage inventory more effectively, and reduce pricing errors, all of which contribute to their bottom line in a thin-margin business. ESLs are used to keep prices low through price matching and more sales events, which build customer loyalty.

A UCSD study examining more than 100 stores found very little evidence of gouging before and after the adoption of ESL, yielding virtually the same results. This highlights the competition between retailers for consumer trust and the effort they put into maintaining that relationship. The study also demonstrates how ESLs address one of retail’s oldest challenges: discrepancies between shelf prices and those at checkout.

Without ESLs, store associates manually replace thousands of paper tags whenever prices change. It’s tedious work that requires hours and leaves ample room for mistakes. With fewer staff on the floor and labor costs rising, it’s harder than ever to keep up. Every missed update increases the likelihood that a shopper will find the wrong price on the shelf, which quickly undermines their trust in the store. ESLs streamline what has long been a time-consuming process often fraught with errors. The result is a shopping experience where prices are always up-to-date and consistent across all stores, including online.

Beyond accuracy and efficiency, ESLs also help retailers address a growing sustainability challenge: waste. While every price change with paper tags generates thousands of discarded labels, this is only the tip of the iceberg. Most stores don't print their labels on premise; rather, they outsource this task to third-party label makers, which print the labels at a central location and then ship them throughout a region. The printing, transportation, and disposal of tens of thousands of tags per store have a significant environmental impact over time. ESLs are more sustainable due to their extremely low power consumption and long lifetime. Most ESLs use an ePaper display, which consumes zero power if the price isn't updating. Most tags will last seven years to 10 years without any battery replacement, and newer models may potentially harvest energy from the environment. For retailers under pressure to reduce their carbon footprint, the shift to ESLs provides a practical way to minimize unnecessary waste while still meeting the demands of a rapidly changing marketplace.

The Path Forward

Momentum is largely underway already. Once a retail advantage in Europe and Asia, ESLs are now gaining traction in the U.S., with many major national retailers rolling out the technology. While this improves operational efficiency for the stores, it also brings the benefit of real-time pricing accuracy for consumers.

ESLs provide practical means of improving price integrity. They don’t just keep prices current; they protect the trust between shoppers and retailers. This technology poses no downside risk to the consumer. Because when shoppers can trust what they see, everybody — shoppers, retailers, and the market at large — benefits.

Bryan Chan is the senior director of research development at E Ink, the originator, pioneer, and global commercial leader in ePaper technology.