Over the next five years electronic shelf labels (ESL) are set to grow beyond retail markets in legislated countries, with revenues increasing six fold to almost US$2 billion by 2019, according to ABI Research.
Retailer’s attention has been caught by other technologies, but the ideal scenario and end game for most will be a tightly integrated system that consists of ESL, smartphone applications, BLE beacons, indoor location, mobile payments, digital coupons/loyalty, customer analytics, and omnichannel marketing and pricing. ESLs are a perfect starting point, bringing a return on investment-based traditional brick and mortar bottlenecks, while also opening the door to next generation services and revenue opportunities, the firm said.
ABI Research senior analyst Patrick Connolly commented, “ESL, in combination with NFC and/or BLE solves ongoing retailer issues like, out-of-stocks, check-out expenditure reduction, manual price coordination overheads elimination, inventory and store layout management, omnichannel consistency, and efficient price management of shrinkage/perishable goods, delivering an RoI within 18 months on these use cases alone. With integrated connectivity, it also brings future potential around dynamic pricing, positive showrooming, tightly integrated in-store advertising/redemption/loyalty, analytics, and pay-as-you-go shopping.”
“Dynamic pricing can be a controversial topic, but many of the arguments against are naive or based on scenarios that are unlikely to occur in the brick and mortar space. The reality is it will give retailers far more control and flexibility, with the ability to reward loyal customers, dynamically match pricing to varying demand, while also meeting the needs of price sensitive customers,” added Connolly.
ABI Research added that Pricer and SES are the two major players in this space today, dominating traditional markets. In particular, SES has shown very strong growth over the last two years, with the recent imagotag acquisition giving it new capabilities. Displaydata (backed by Zebra Technologies) and Samsung Electronics are the clear emerging threats, with Altierre also achieving some success in its native US market. There are also a number of localized start-ups such as Hanshow in China that will make this a very interesting market over the next five years, the firm added.