MCC SuperSpar, one of the leading supermarkets in Klerksdorp, has reported multiple benefits, including reduced costs, since the introduction of Pricer's electronic shelf labelling system, supplied and installed by XON company Skydirect in February this year.
But the cost saving is only the tip of the iceberg, reports Sotiris Michaelides, co-owner of MCC SuperSpar, and of St Michaels Spar and Tops liquor store in Orkney, which have also implemented the Pricer system.
The ultimate benefits, Michaelides says, are:
* The professional look and feel electronic shelf labelling confers on a supermarket.
* The confidence shoppers have in knowing that the price advertised will perfectly and consistently match that at the point of sale. This has led to higher levels of customer loyalty, as shoppers know there will be no discrepancy between displayed price and actual price charged.
* The speed with which prices can now be changed: where a major round of price changes used to take an average of three workers three days to complete, it can now be done in mere minutes. When prices are increased, this has an immediate and positive impact on cash flow.
"Electronic shelf labelling closes the loop and makes barcode scanning complete," says Michaelides. "Were I to open a store today, I would not consider it without electronic shelf labelling.
"Recently, we were able to implement 2 080 price changes in 15 minutes, including 480 promotional items reverting to their standard price, 500 new promotions and 1 100 normal price changes for the day."
Michaelides is a firm believer in technology for competitive edge in retail: as such, his Spar stores were among the first in South Africa to implement barcode scanning. Michaelides had been actively seeking an electronic shelf labelling system for some years. It was when he came across Pricer, distributed and supported locally by Skydirect, that he knew he had found the ideal system.
"Pricer runs off a back-end server, and uses the same file as that sent to the point of sale," says Michaelides. "XON installed 10 000 labels in the first phase, in around four weeks. Each label connects with the server via wireless infrared in realtime, so changes are made simultaneously to all points of sale and the electronic shelf labels."
Pricer has the ability to update 50 000 price changes an hour, which translates to a potential 1 500 changes in two minutes; this, compared to up to three days for three workers.
"We can now deploy our people more strategically, rather than having them spend much of their month changing prices manually," adds Michaelides.
"There has also been an unanticipated benefit. If a product is out of stock, a rival rep can easily move a paper shelf label and populate the shelf space with their own product, leaving management unaware of the out-of-stock situation. As Pricer electronic shelf labels are fixed permanently to the shelves, this cannot happen any more, allowing us earlier visibility into stock levels."
Pricer has made it far easier to cope with the sheer number of price changes occurring in 2008, notes Michaelides. "The number of price changes, done over a week, have increased by 300% from a year ago due to the higher consumer inflation rate. With Pricer, it's mere minutes to update prices, no matter how frequently they change."
Michaelides has also implemented Pricer's new large digital display electronic shelf labels at the end of the gondolas in the SPAR. The larger digital labels carry a product logo and store branding as well as price and barcode digitally. This customised display drives brand loyalty with suppliers.
In the near future, Michaelides aims to implement more electronic shelf labels to embrace fresh and weighed produce.
While the many factors involved in retail make it difficult to quantify the long-term return on investment, Michaelides anticipates a direct impact on profitability. "We close our books in February next year, and after a full year of Pricer, we should see a direct benefit on the bottom line. The intangible benefit, though, is that we will clearly run a more efficient and more professional store."
Hendrik Bredenkamp, MD of Skydirect, an XON Holdings company and Pricer value-added reseller, comments: "Stores in the SPAR group have been among the most pioneering in South Africa in adopting electronic shelf labelling, with 50 SPAR and Tops liquor stores already committed to rolling Pricer out throughout South Africa and Namibia. They and their customers will reap the benefits for decades to come."