Digital Shelf Labels: Improving Accuracy, Reducing Waste and Supporting Modern Grocery Retail

Maintaining accurate shelf pricing in a modern grocery store is a complex task. The average U.S. supermarket carries approximately 32,000 unique products, and prices frequently change due to manufacturer updates, promotions and supply chain shifts.

When stores rely on traditional paper labels, associates must manually replace thousands of tags each week. The average grocery store changes more than 7,000 price tags per week by hand. Across large grocery chains, retailers may print 5 million or more price tags weekly.

At this scale, manual tag replacement can create occasional mismatches between shelf prices and checkout systems. DSLs help eliminate this issue by updating shelf labels and point-of-sale systems simultaneously, ensuring shoppers see the correct price.

Additional benefits include:

• Improved regulatory compliance with state and local price accuracy rules
• Reduced pricing errors caused by manual tag replacement
• Faster implementation of sales and promotions

DSLs are not used for intra-day surge pricing or surveillance pricing. According to industry data, ninety-two percent of all price changes occur when stores are closed between 2-5AM. The remaining 8% of changes during open hours are made because of markdowns to reduce food waste, quickly move inventory to make space for new items, or compete with competitor prices.

In addition to reducing material waste, DSLs can help reduce food waste. Because prices can be updated instantly, stores can quickly discount fresh or prepared foods approaching expiration. These “flash discounts” encourage customers to purchase products before they spoil.

Research suggests that time-triggered markdowns on perishable items can reduce food waste by up to 21 percent while helping shoppers access lower prices.

Traditional paper shelf tags require significant material use and generate waste. Every week, grocery retailers must print millions of paper tags, which require paper, ink and transportation to stores. Over time, this process creates unnecessary waste and costs.

DSLs offer a more sustainable alternative. Benefits include:

• No paper or ink required
• Rechargeable, energy-efficient display technology
• Reduced printing and transportation costs

Modern DSLs do more than display prices. Digital labels can communicate additional product information to help customers make informed purchasing decisions, including:

• Allergen warnings
• Nutrition information
• Product origin or certifications
• Promotional messaging

Some DSL systems also allow customers to access expanded product information through QR codes or smartphone integration, helping bridge the gap between physical and digital shopping.

One common concern raised about DSLs is whether they reduce jobs in grocery stores. The reality is that grocery stores are looking to hire staff, not reduce. Food retailers have about 200,000 job openings across the United States, according to FMI’s The Food Retailing Industry Speaks report. Rather, the technology primarily changes how store employees spend their time.

Replacing thousands of paper tags each week is physically repetitive work that requires significant labor hours but provides little value to shoppers beyond maintaining baseline expectations.

By automating this process, DSLs allow store associates to focus on higher-value responsibilities such as:

• Assisting customers
• Maintaining fresh departments
• Supporting online order fulfillment
• Ensuring shelves remain stocked

Retailers report that associates prefer this shift toward more meaningful work and customer interaction and actually improves employee retention.

Digital shelf labels also provide operational capabilities that allow stores to offer an improved customer experience. Examples include:

• Inventory visibility: DSL systems can alert employees when products run out on shelves.
• Pick-to-light functionality: Flashing labels guide employees directly to products when filling online grocery orders, improving accuracy and speed.
• Merchandising insights: Multi-color LED indicators can help category managers quickly identify slow-moving or high-performing products while walking the store.

Digital shelf labels are not a new concept. Their adoption has grown rapidly since 2021 as grocery retailers invest in technology that improves store operations and enhances the shopping  experience. Technologies like DSLs help grocers manage inventory, reduce waste and ensure pricing accuracy—critical functions in a complex retail environment.