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Germany: Discounters start introducing digital price tags

The electronic shelf labels (ESL) could not only reduce food waste, customers could also save money through more frequent discount campaigns. The switch to digital pricing is the "harbinger of a game changer in retail," says an expert.

Really does it, electro store Saturn does it and as Lidl was the first discounter to advance, followed by Aldi: More and more retailers are using digital price tags. Aldi Nord has now also installed electronic shelf labels in a store in Essen. Another store in Gelsenkirchen and a store in France are to follow. The "Electronic Shelf Labels" (ESL), in technical jargon, are to be tested first in the three stores to see how they are received by employees and shoppers. The high-tech labels are usually directly connected to the central inventory control system of a discount store, which sends important product information such as product name, price, quantity and ingredients to the shelves almost in real time.

This means that in the future, Aldi employees will no longer have to print and attach new paper price tags to these shelves every time the price changes. This saves the discounter a lot of time and thus also personnel costs.

Aldi Nord is now the third discounter in Germany after Lidl and Aldi Süd to test this type of labeling. A company spokeswoman for Aldi Nord said to the food newspaper: "Aldi Nord is serious about digital change." Previously, the discounters would have preferred to avoid the high investment that a redesign of the branches would entail.

However, Aldi goes even further than Lidl, whose test branches initially only apply digital signs to promotional goods and fruit and vegetables. The discount chain from Essen also includes the standard assortment range of almost 1,600 items as well as perishable SKUs such as fruit and vegetables. In these segments, prices change frequently. This could, also curb food waste from fresh products such as fruit and vegetables.

Aldi is following a trend with digital price tags

For a long time, however, Lidl stores in Switzerland, France, Belgium, Bulgaria and Lithuania have also been equipped with ESL. And Aldi Süd is also testing the labels in a store in Duisburg, according to information from the “Lebensmittelzeitung”.

Because the digital price tags may initially be a little more expensive to buy, but pay off in the long term: Aldi and other retailers not only save time, money and personnel and material costs with them, they can also react to competitor price changes at short notice. David Gordon, head of research at the market research firm Edge by Ascential, says: “ESL enables discounters to work inexpensively and easily. It is only beneficial for them. "

Electronic labels enable dynamic prices

With the switch to digital, there is also a discussion about dynamic prices, which theoretically can change every minute depending on the market situation. According to Boris Planer, head of the Go-to-market Insights department, also at the market research company Edge by Ascential, says that the greatest challenge in dynamic pricing is not to lose customer trust. Too large and frequent price jumps could give the buyers the impression that they are being ripped off. The discounters couldn't afford such a pricing strategy.

E-labels weren't from yesterday. Planer explains why they are only now slowly finding their way into German discounters: “These labels used to be quite expensive. The prices are now falling, which means that the point at which a return on investment is achieved comes faster. ”He thinks it is conceivable that at least Aldi and Lidl will equip all their branches with it in the future. In the long term, this step is "the harbinger of a game changer in retail".

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