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Weather report – the ESL storm is coming

Weather report – the ESL storm is coming


From the start, a perfect storm referred to meteorological events aggravated by rare combinations of circumstances. The first reference to it was published back in the year 1718, but in modern times it has been used more frequently to describe the events such as the financial crisis of 2007-2008.

As leaders in store digitalization, we see a perfect storm coming, with a combination of powerful disruptions across a range of areas, all driving towards the need for store digitalization and electronic shelf labels across the retail industry.

Storm warning 1 – supply chain

The disruptions in the global and local retail supply chains that followed the pandemic have been worsened by the effects from the war in Ukraine. This has left many retailers struggling with empty shelves and price hikes on many goods.

To address this, retailers digitalize the shelf edge for increased ability to predict supply/demand, optimize replenishment and introduce dynamic pricing.

Storm warning 2 – inflation

The current inflation has put the grocery sector in the public spotlight. News media publish daily reports on increasing prices of food and the effects it has on households. Most retailers have at the same time stressed to the public that the current price hikes do not include any increased profit margins. But retailers are facing increasing pressure to help consumers deal with the situation.

Retailers are also facing an increasing risk of loyal consumers choosing a lower cost option.

To address this and cut costs, retailers need to further digitalize and optimize in-store operations. Retailers also need to strengthen value-added in-store communication to guide customers and strengthen loyalty.

Storm warning 3 – staffing

Many traditional in-store tasks are labor intensive, such as replenishment and inventory management. At the same time, there is a labor shortage following the pandemic, where many industries, including retail, struggle to fill vacant positions.

Retailers are also under pressure from rising wages and increasing hesitance from a new generation of store associates to do mundane tasks.

To address this, retailers are working to digitize labor-intensive and mundane in-store tasks to reduce staff shortages and free up existing staff to focus on value-adding services.

Storm warning 4 – customers

The pandemic made many customers rethink their shopping habits. For some, it meant that they went from in-store shopping to home delivery or click & collect. For others it meant that they cared more about whether brick-and-mortar stores offered contactless payment or mobile in-store assistance.

Now customers care less about the delivery method and more about the experience and value for money.

To address this, progressive retailers are offering customers a wide variety of delivery and payment options as well as increased personalized in-store experience and value-added guidance.

Storm warning 5 – digitalization

In the last decades, most industries have moved to digitize their operations. The brick-and-mortar retail industry, however, has to some extent been late to the party. But the explosive rise in e-commerce and the changing customer preferences following that, have led to a do-or-die moment for physical stores.

To address this, retailers are not just digitalizing the shelf edge, they are establishing an in-store cloud platform that optimizes operations across many stores and offers critical insights in real-time.

Storm warning 6 – sustainability

Customers increasingly want information at the shelf to guide them toward sustainable choices. They also want retailers to actively work to reduce food waste across the store through smart inventory management and pricing.

To address this, retailers are using advances in shelf edge technology to offer customers information regarding ingredients and sourcing of products at the shelf, in a format that fits them and at the time they need it. They also work further with dynamic pricing to reduce food waste and improve customer satisfaction.

Advice – the perfect storm

Throughout the centuries humankind has tried different ways to protect themselves when in a storm’s way. Some had tried to hide under something that looked stable, with mixed results. Some have tried to run away from it, again with mixed results. Some have addressed it head on, even using some of the dynamics of the storm to their advantage.

Rather than looking at the storm warnings as frightening, each of them is an opportunity to transform into something better and something more sustainable and competitive for the future. As the leaders of in-store digitalization, we stand steady and ready to guide you when the wind picks up!


Published October 11, 2022