Setting the Record Straight on Digital Shelf Labels

FMI’s new fact sheet highlights how digital shelf labels improve pricing accuracy, reduce waste and give shoppers more information while dispelling common misconceptions.

By: Michael Green, Director of State & Local Government Relations, FMI

You’ve probably glanced at hundreds of digital price displays without thinking twice, such as at the gas pump or even in a drive-through. That same subtle technology has been transforming grocery store shelves over the years: Digital shelf labels (DSLs). These small, dynamic screens are steadily replacing paper price tags and reshaping how retailers improve pricing accuracy, reduce waste and support a modern grocery retail experience.

DSLs simply replace paper price tags with small digital price displays. This helps ensure the price you see on the shelf matches the price at checkout.

Unfortunately, more than a dozen states – and the U.S. Congress – are currently considering legislation that would ban this useful technology. These bills are largely driven by fears and misconceptions about what DSLs are actually meant to do.

FMI created an Digital Shelf Label Fact Sheet to set the record straight.

Grocers do not use DSLs to enable “surge pricing,” surveillance-based pricing or to set prices at all. DSLs do not collect personal information, do not track shoppers and do not change prices while you browse.

So what do DSLs do? They display a price accurately – and with much less material waste than traditional paper tags (which stores use millions of per week). They also can be updated more easily and quickly than manually switching out thousands of paper tags, ensuring greater accuracy and transparency.

Some modern DSLs can communicate product information, like allergen warnings and nutritional content, helping customers make informed purchasing decisions while at the store. DSLs can also provide operational enhancements that improve the shopping experience, like alerting employees when products run out on shelves.

In fact, with both DSLs and paper shelf tags, the vast majority of price updates happen overnight when stores are closed (92 percent of these changes occur between 2 and 5 a.m.). If prices do change during the day, these changes are often because of markdowns, especially for fresh foods nearing their quality dates to help shoppers save money and reduce waste.

Studies show that time-based “flash discounts” on short-dated items can cut food waste by up to 21 percent.

Another concern voiced by lawmakers who propose DSL bans is that grocery companies could use DSLs to reduce jobs. The reality is that grocery stores are looking to hire staff, not reduce their workforce. Food retailers have about 200,000 job openings across the United States, according to FMI’s The Food Retailing Industry Speaks report.

FMI members report that switching to DSLs has improved employee retention, and DSLs allow store associates to focus on more meaningful work and customer interaction.

Legislation based on hypothetical fears instead of real-world problems risks creating unintended consequences. Banning DSLs would force grocers to rely on slower, more wasteful, more costly and less accurate paper-based systems.

If you want the full picture, FMI’s Digital Shelf Label Fact Sheet lays it out clearly. Digital shelf labels are about accuracy, transparency, sustainability and a better shopping experience – for everyone.

Read the fact sheet