at Walmart’s Texas location, where the retailer has been trialing digital shelf labels, called the technology a “game-changer for Walmart, our customers and our associates”. “It is not only about improving efficiency and customer satisfaction, but also about integrating sustainability into our work, in this case, to help reduce operational waste,” she said. Walmart’s digital shelf labels were developed by Vusion Group. The buzz around Walmart’s announcement reflects the strong interest in digital labeling in the US retail market, which has fallen behind European players when it comes to experimenting with this type of technology. For instance, Norwegian discount retailer Rema 1000 has been investing in this space for over a decade.  Data gathered by SNS Insider, a market research company, revealed that the electronic shelf label market was valued at US$1.6 billion in 2023. The market is projected to expand rapidly at a compound annual growth rate of 13.5 per cent from 2024 to 2031 to reach $4.4 billion. Inside Retail spoke with Matt Pavich, senior director of strategy and innovation at Revionics, an American software company that develops lifecycle price optimization software for retailers, to learn more about the competitive advantages of Walmart’s most recent technological investment.  Is Walmart’s investment in DSLs worthwhile?  As Pavich explained to Inside Retail, “The primary use case of dynamic store pricing is to offer more competitive pricing in the marketplace.” This is particularly relevant right now, given the current inflationary environment and price sensitivity among consumers. Data shows that grocery prices have remained flat or declined for the past four months as retailers try to maintain a market edge amid fluctuating costs for consumers. Pavich noted that, “retailers that choose to adopt modern pricing technologies will enhance consumer loyalty and profitably gain share; those that stand by and watch will see their position erode in the coming years.” While some consumers may be concerned that retailers will use digital shelf labels to raise prices on trending items, retailers are just as likely to use them to reduce prices to beat their competition. “Not only does it offer the opportunity to move faster, but it also provides the ability to change prices more frequently at a lower cost…while freeing up labor to focus on other business needs, such as customer service,” Pavich said. Using a hypothetical example, he explained that a retailer with digital shelf labels (retailer A) will have a leg-up over one without (retailer B) that can only change price signs once a week due to labor constraints. Retailer A can wait for Retailer B to change its prices and immediately beat them that day, followed by better pricing for the entire week. Alternatively, retailer A can wait to price match during a peak selling period, such as the weekend.  “In all cases, retailer A is in full control of the situation and retailer B has no chance to beat them on pricing while also spending more on labor every time they make a pricing move,” Pavich said. The ability to update prices quickly and cost-effectively isn’t the only benefit of digital shelf labels. Walmart’s Boscan noted several other advantages, including: Simplified stock replenishment With the “Stock to Light” feature, an associate can flash an LED light on the shelf tag using their mobile device, signaling locations that require attention, making it easier for associates to identify the shelf’s location when stocking shelves. Faster order picking and fulfillment The “Pick to Light” feature guides Walmart staff members directly to the products needed for online orders, speeding up the picking process and improving order accuracy. Should other retailers follow in Walmart’s digital footprints? The short answer to this question is both yes and no. “Not every retailer will have the funds or sophistication to install DSLs immediately, nor does it make sense in every segment of retail to do so,” Pavich said.  For retailers with relatively stagnant product prices, like hardware merchants, there is little incentive to invest in DSLs, which have a significant upfront cost. However, for businesses with highly price-sensitive shoppers, like Walmart, Aldi and other grocery players, the ability to update prices immediately isn’t only a helpful advantage, but a necessary one.  “Retailers that are serious about offering great prices and promotions will need to make similar investments. One thing is clear, DSLs are here to stay, and the most sophisticated retailers will invest in them along with the best AI pricing platforms to maximize their ability to compete,” Pavich concluded.