Johannesburg, 02 May 2013
Lex Hollman, owner of SuperSPAR and TOPS Malelane, has deployed Pricer electronic shelf labels (ESL) throughout his two stores for a total of 17 000 labels. One of the major benefits has been a near eradication of price discrepancies between shelf and till, and another the permanent visibility of prices, so that customers are assured of the price of an item. Because SuperSPAR Malelane honours the lowest price in any discrepancy, the retailer is making enormous savings while simultaneously providing a better service to customers.
"I started looking at Pricer electronic shelf labels (ESL) when they first appeared on the market more than a decade ago, saw that they are a good idea, but waited to use them because they were expensive. The price has reduced since then, but even so, this is not a cheap system," says Hollman.
He adds that the solution was definitely worth it, because an issue he faced in his stores, as do many retailers, was managing a large number of paper shelf price labels. It is easy for paper labels to be removed from the shelves, for them to be missed during daily, weekly or monthly updates, or to be hidden behind a misplaced product.
"I have over 16 000 labels in my store so it required a great deal of maintenance to ensure they were all correct, displayed, visible and serving their purpose," he says. "The old system required us to produce our price adjustment document at the tills, which we would then use to update the shelves."
Hollman says that one of the original selling points of the Pricer ESL system was that price updates that would normally take a full day under the paper label system are reduced to a matter of minutes using the Pricer ESL system. However, he says there are better reasons for employing the ESLs than that.
"The fact that this is a two-way communication system is what makes it really valuable," he says. "You get confirmation that prices have been updated and that they are correct, which is invaluable. We also get instant feedback on labels in roaming. Those are labels not responding to the system for some reason, because they have been removed, they're not working, or they're obscured by something. That sometimes happens in the fridges when a customer or employee places a product on top of a label. Because we have such stringent management of the ESL system, which it absolutely requires to be effective, we have cut the number of labels in roaming to a maximum of 30 but normally that figure is in the single digits, which is exceptionally good considering there are now upwards of 17 000 labels deployed."
Malelane SuperSPAR and TOPS originally had 12 000 labels between them, but the number of deployed labels has recently increased to include every product in the stores. The original deployment took between three and four weeks and XON, which holds the exclusive African Pricer distribution agreement through its subsidiary, Skydirect, completed the project.
Hollman says one of the understated benefits of the system is the way it fixes labels to the shelves. The ESLs are placed in a strip attached to the shelves so they need to be pried out of position. It is far more secure than a paper shelf talker that can be slid from its plastic case with ease. In addition to the strip into which the ESLs are inserted Hollman says he has made it a dismissible offence in his store to tamper with the ESLs. While that has helped to significantly reduce the number of labels in roaming, it has also offered another major benefit.
Hollman's stores are structured according to category management methodologies, which ultimately mean products are placed according to methods that promote the sale of all items in the store and not just one brand or one specific product. Prior to the Pricer ESL system merchandisers, responsible for placing product on shelves and incentivised to do so, would sometimes move labels to gain more shelf space for a given product, then overstock that product. They would time these unscrupulous activities in tune with visits from the suppliers so that inventories would demonstrate that the product was performing well. The result was that sales would slump on products that had been removed from shelves by these unscrupulous merchandisers and ultimately result in out-of-stock situations.
Pricer ESLs secured to the shelves coupled with it being a dismissible offence to remove them has resulted in a much clearer picture of product performance and eradicated out-of-stock situations. As a result customers are happier, unscrupulous merchandisers have been exposed, suppliers are happier, and Hollman's stores generate more income.
Hollman employs 230 people and uses 30 third-party merchandisers, his stores have 36 checkouts and perform an average of 220 000 till transactions a month. He now updates all prices in the stores by 7am, in only 15 minutes. On the day of the interview, Thursday 28 February, there were only 24 labels in roaming. He says it is paramount to ensure labels in roaming are checked immediately and the situations remedied right away to ensure the number never rises, otherwise it becomes an onerous burden on his store manager, who is directly responsible for resolution.
The success of the ESLs has prompted him to acquire larger, 80mm by 124mm labels for a 110mm diagonal display, that offer more space to display labels and easily read characters. These larger labels are used for the fruit and vegetable section, with special LCD labels in the butchery and deli sections that offer an attractive display along with the other benefits.
In addition to the labels themselves that flash a light to signal a price special, Hollman also opted to use clip-on displays that surround the ESL and draw even more attention to price specials on specific products.
He says there have been some problems with labels being damaged by water in the freezers and some labels were faulty. The faulty ones were replaced by XON at no charge and other problems quickly remedied by XON employees.
The Pricer ESL system also offers stock management at the shelves through a remote control device that interrogates shelf labels and displays the results at the shelf. Information such as stock holding, rate of sales, suppliers and more is displayed. However, Hollman says his stores run a perpetual stocktaking system, which is performed every night, with a rotation through the store every three months, so stock levels are accurate each morning.
"Lex is a very hands-on owner and handles all of his own IT systems, so he understood the benefits of the Pricer ESL system immediately," says Hendrik Bredenkamp, MDof Skydirect, a XON company. "He took the trouble to travel to the EuroShop international retail trade fair in Germany, where he investigated ESLs further before we went ahead and implemented the system for him. He really did his homework and we are obviously very happy that he chose Pricer as a result of all his investigations, as well as the fact that he is gaining enormous, pragmatic benefit from the system."
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