Walmart Is Putting Digital Labels that Change Prices Instantly on Every Store Shelf in America |
Walmart Is Putting Digital Labels that Change Prices Instantly on Every Store Shelf in America
Walmart’s ‘digital shelf labels’ are controversial not because of what they are, but because of what they enable.
EXPERT OPINION BY JASON ATEN, TECH COLUMNIST @JASONATEN
A customer walks down an aisle displaying bottles of laundry detergent for sale at a Walmart Inc. store in Secaucus, New Jersey, U.S., on Wednesday, May 16, 2018. Walmart is scheduled to release earnings figures on May 17. Photographer: Timothy Fadek/Bloomberg
Walmart just announced it will roll out digital shelf labels (DSLs) to all of its U.S. stores by the end of 2026. These labels, which are really small digital displays, are mounted where paper price labels used to be, and can be updated remotely — in real time, across thousands of locations at once.
The company says it is making the change as a way to save time and money. Changing paper price tags is genuinely labor-intensive. Multiply that across a store with tens of thousands of SKUs, with changes happening regularly, and you have a meaningful chunk of employee hours that could theoretically be spent on something else.
The interesting thing about DSLs isn’t that they make it easier to update prices. It’s that they make it possible to update prices instantly—without any friction.
Friction is important
Of course, sometimes friction is a good thing. The fact that companies had to print labels and have employees walk through the store changing them meant that they had to be intentional about changing prices. There was a real cost associated with changing prices, which meant companies couldn’t just change them at a whim.
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DSLs remove all of that. Technically, a price can change at 9 a.m., change again at 2 p.m., and change again before the dinner rush. There is no incremental cost to changing prices because it can be done with the press of a button that updates both the label and the checkout lanes at the same time. There’s no one in the cereal aisle with a stack of paper tags to tip you off that something is happening.
Walmart hasn’t said it plans to do this. But the capability is now there, and once you can do something, it’s almost always just a matter of time before someone decides to make it happen.
Dynamic pricing in the grocery aisle
There’s a name for what happens when a retailer can adjust prices based on time of day, demand, inventory levels, or whatever signal the algorithm is watching: dynamic pricing. You already experience it when you book a flight, reserve a hotel room, or even buy gasoline. The price you see is the price for right now, and right now changes constantly.