Electronic shelf label

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Electronic shelf labels in Tokyo

An electronic shelf label (ESL) system is used by retailers for displaying, typically on the front edge of retail shelving, product pricing on shelves that can automatically be updated or changed under the control of a central server.[1]

A shelf label with electronic paper display

ESL tag modules use electronic paper (E-paper) or liquid-crystal display (LCD) to show the current product price to the customer. E-paper is widely used on ESLs as it provides crisp display and supports full graphic imaging while needing only power during updates, but no power to retain an image. A communication network from the central server allows the price display to be automatically updated whenever a product price is changed, in contrast to static placards. Wireless communication must support application range, speed, battery life, and reliability. The means of wireless communication can be based on radio, infrared or even visible light communication.[2] Currently, the ESL market leans heavily towards radio frequency communication.[citation needed]


Early product[edit]

An early System first offered for sale by NCR in 1997 used Modulated Backscatter of radio waves to provide two way wireless communications between the labels and the store’s radio network. By using modulated backscatter, the labels confirmed receipt of price changes (along with battery and display status) without the need for an active radio transmitter, thus saving cost and increasing battery life to over 5 years.[3]

First generation: LCD and infrared communication[edit]

7-segment LCD ESL tags use a display similar to how a calculator displays the numerical values. The numerical value to display on the tags itself are then shown based on activating different combinations of these seven bars and segments. A disadvantage of using a liquid crystal displayated tag is the difficulties in displaying certain letters.[4] The communication technology used for the transmitter to connect to the label is through diffused infrared communication. The values on the LCD tags are established by infrared bouncing off of surfaces. However, the speed of transmission is heavily compromised due to the data compression of each data packets from the transmitter.[5] Another disadvantage is that LCDs need power to retain an image.

Second generation: e-paper and infrared or radio communication[edit]

Electronic paper (E-paper, electronic ink, or e-ink) describes a technology that mimics the appearance of ordinary ink on paper. An e-paper display is made up of multiple capsules in a thin film with Electrodes placed above and below the capsule film and when a charge is applied to an individual electrode, the color particle moves to either the top or bottom of the capsule, allowing the ESL to display a certain intensities of color within the capsule.[6] E-paper generally uses an infrared or radio communication network to communicate from the central server transmitter to the tags. Typically, low frequency radio solutions are used for tags, but with the draw backs of low data rate that makes it difficult to show complex segmented images.[5]Building information modeling

Third generation: geo-location and product finder[edit]

The current generation of ESL units utilize e-paper display technology along with wireless radio communications, are integrated with existing retail technologies such as electronic article surveillance, digital signage, and people counters. Therefore, retailers are able to upload a floor plan of the sales area into the label-management software. Once this has been done and all the hardware and other software pieces are in place, consumers can be automatically tracked (in real time) through the network of people-counting devices, or via their personal Bluetooth devices, in order to determine their positioning within the store at all times; allowing the individual customer to be subjected to targeted, customized marketing initiatives: discounts, individual pricing, etc.[7]

General principles[edit]

Concept display of the connection between the label management software, communication station, and terminal display in a mock-up retail environment

A typical ESL utilizes ultra-low-power CPU and wireless communication solutions to meet low power of low cost constraints in order to displace the high number of static shelf labels required in an average retail store.

ESL consists of three components:

  1. Label management software: Responsible for the configuration of the system, configuration of the properties on the label itself, and to store the database for the list of prices. The software mainly covers the network management, file systems, and transmission of data.[8] Also processes and packs the data of product information and the prices configured into packets of information. The data packets are then sent to the communication station via wireless network. Typically, a centralized software that is responsible for the building of and maintenance of the network for the data communication between the label management software and the terminal display.[9][10]
  2. Communication station: Responsible for the stability and reliability of transmittance through a long distance from the label management software to the label.[9][10]The wireless communication must support application range, speed, battery life, and reliability. The means of wireless communication can be based on radio, infrared or even visible light communication. Currently, the ESL market leans heavily towards radio frequency based ESL solutions.
  3. Terminal display: Functions as a receiver from the communication station to display the price configured from the label management software.[9][10] The terminal display label will then act based on the instructions that was given in the data packets.[9]

Hardware design[edit]

ESL hardware design generally includes the circuit design of the communication station and the terminal display label. The typical chipset used to perform the basic functional requirement of ESL's is the TI MSP432 or a solution from Silicon Labs. Typical communication between the communication station and the terminal display label is controlled by a RF module, the general protocol for RF module uses CC2500 with a communication distance of upwards to 30 meters.[9] For terminal display, it can be displayed via electronic ink, electronic paper or liquid crystal display.

Software design[edit]

An ESL software API is included in the bluetooth 5.4 specification permits a 7-bit group identifier of 8-bit unique ESL ID's allowing for a total of 32,640 ESL's to be allocated for one bluetooth ESL network.[11] Multiple bluetooth ESL networks would be necessary in the same location to cover typical grocery store ESL applications.[12]


Electronic shelf labels are primarily used by retailers who sell their products in stores and are usually attached to the front edge of the retail shelves and display the price of the product.[1] Additional information such as stock levels, expiration dates, or product information may also be displayed as well, depending on the type of ESL.[13]


Automated ESL systems reduce pricing management labor costs, improves pricing accuracy and allows dynamic pricing. Dynamic pricing is the concept in which retailers can fluctuate pricing to match demand, online competition, inventory levels, shelf-life of items, and create promotions.[14] Some advantages of using electronic shelf labels are

  1. Accurate pricing: Prices on shelves are updated on time and on demand to match with price files on the label management software from a link between the in store point of sale processor and the label management software. This will increase pricing accuracy to avoid branding issues revolving around price integrity. As a result, decreasing the lost revenue from undervalued items, as consumers generally alert staffs of overpriced items, and not the inverse.[15]
  2. Save costs: As opposed to traditional pricing labels, whenever prices are changed and updated; employees will no longer require to print out labels and manually replace them in the shelf tags. With ESL, this eliminates the need to visit each shelf and make changes as all changes are made in the label management software and updated to the labels digitally. This saves retailers on the materials and labor in producing and replacing printed tags, and offer the ability to update prices dynamically on demand.[16][17]
  3. Product finder: Retailers are able to integrate each ESL tags with an external application to offer wayfinding capability for their products. A customer can input the product they are looking for either through a developed mobile application from the retailer, or through an external digital signage to direct the customer to the product's location.[18]
  4. In store heat map: Some ESL providers integrate with Bluetooth Low Energy enabled devices to track the movement of consumers and how long they remain at a particular location. This is done by displaying an image of the floor plan of the store on the label management software with a heat map showing locations of hot spots based on the detection of responses from high traffic areas through Bluetooth.[19]
  5. Regulate stock levels: Inventory management is crucial for retailers. Inventory information may be displayed on ESL through connection with the point of sale processor. Additional information the ESL can display is an expected date on when the stock will refill on the shelf. ESL will also be able to display a quick response code to allow consumers to easily find the item online, or for retailers to display relevant product information to their consumers.[20]


While there are benefits to ESL, it is not without its flaws. Some disadvantages of using electronic shelf labels are:

  1. Error propagation: As ESL are controlled by a label management software that regulates all ESL within a store or throughout an entire chain of company, any erroneous or undervalued price entered into the label management software will be reflected through the entire retail chain.
  2. Inability to quantify return on investments: Due to the large volume of ESL a retailer will need for their stores, the initial investment cost for a store could be marginally high. This along with the inability to quantify whether consumer experience were improved during shopping due to the implementation of ESL makes it difficult to quantify the return on investment of ESL.[21]

Market trends[edit]

The global ESL market throughout 2027 is forecast to grow more than 16% CAGR.[22][23] The wide range of users ranges from grocery stores, hardware stores, sports equipment, furniture, consumer appliances, and electronic and gadgets. Forecast growth is primarily due to reduction in pricing over time.[24][25]

With the rapid increase in the inclusion of Internet of things technology in the retail industry, over 79% of retailers in the North America alone expect to invest in ESL and people counters. 72% of these retailers in North America have plans to reinvent the supply chain management through adoption of ESL in their stores, thereby accelerating the market growth of ESL. Further studies show that Europe currently dominates the ESL market in terms of size, with over one-third of the total market share in 2017, due to the strong presence of domestic and multinational retailers in the region, Diebold Nixdorf AG, and Displaydata.[26] However the market in APAC is expected to grow at the highest CAGR within the forecast period. The ESL market in the APAC region is segmented into territories with significant market potential, China, Japan, Australia, Singapore, South Korea, and the rest of the region.[27] Additionally, growth focuses on the expansion of large scale retailers in the region.[28] A study led by ABI Research states the global ESL market could reach US$2 billion by 2019(actual achieved marketshare in 2019 of $631 million), but a further study led by Fortune Business Isights expect the ESL market to reach $2.85 billion by 2027.[29][30]


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