Walmart is adopting electronic shelf labels, similar to other supermarkets. What it means for you: NPR

An employee arranges a digital price tag for vegetables at a Whole Foods store in the Silver Lake neighborhood of Los Angeles.

Patrick T. Fallon/Bloomberg via Getty Images

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Patrick T. Fallon/Bloomberg via Getty Images

Grocery store prices are changing faster than ever — literally. This month, Walmart became the latest retailer to announce it will replace price labels in its aisles with electronic shelf labels. New labels allow staff to change prices every ten seconds.

“If it’s hot outside, we can raise the price of water and ice cream. If something is approaching the expiration date, we can lower the price — that’s the good news,” said Phil Lempert, a grocery industry analyst.

Apps like Uber already use surge pricing, where high demand causes prices to rise in real time. Companies across industries have sparked controversy by talking about implementing surge pricing, with fast food restaurant Wendy’s recently making headlines. Electronic shelf labels allow the same strategy to be applied in grocery stores, but they’re not the only reason retailers are making the switch.

The ability to change prices easily was not mentioned Walmart ad That 2,300 stores will have digital shelf labels by 2026. Daniela Boscan, who participated in Walmart’s pilot of the labels in Texas, said the main benefits of the label are “increased productivity and reduced walk time,” as well as faster restocking of shelves.

Walmart isn’t the first big grocer to make this change, as you can already find electronic shelf labels at Whole Foods, Amazon Fresh stores, and the Midwestern chain Schnucks. Digital shelf labels are becoming more popular in stores across Europe.

Another advantage of electronic shelf labels is the description of their products. Lempert points out that bar codes on new labels can provide useful details beyond price.

“It can actually be used where you take your mobile device and scan it and it can give you more information about the product — whether that’s where the product comes from, whether it’s gluten-free, whether it’s keto-friendly. That’s the promise,” Limpert said. Really what these shelf tags can do.”

As do high wages Labor is more expensiveRetailers large and small can benefit from the increased productivity afforded by digital shelf labels, said Santiago Galeno, a professor of retail management at the Wharton School of the University of Pennsylvania.

“The bottom line, at least when I talk to retailers, is to calculate how much labor they’re going to save by incorporating this. And in that sense, I don’t think this is something that only large companies like Walmart or Target can benefit from,” Gallino said. “I think smaller chains can also see the potential benefit from it.”

While labels give retailers the ability to suddenly increase prices, Galino doubts that companies like Walmart will take advantage of the technology in this way.

“To be honest, I don’t think that’s the main driver behind it,” Gallino said. “These companies tend to have a long-term relationship with their customers, and I think the risk of disappointing them would be too risky, so I would be surprised if they tried to do that.”

Rather than seeing an opportunity to use markup prices, Gallino says retailers are more likely to gravitate to electronic shelf tags to ensure consistency between online and in-store prices.

“Today, Walmart customers can check their app as soon as they enter the store, and the prices Walmart offers online,” he said. “If there are inconsistencies, it can frustrate or confuse customers.”

Electronic shelf tags are supposed to make it easier for brick-and-mortar stores to keep up with prices as they change online. This consistency should be better for customers, he says.