In more than 200 Kroger stores across the nation, consumers soon will see a different type of display. Rather than conventional paper tags listing prices, brands, and other information, these stores are piloting the Kroger Edge system that supports digital shelf tags. The electronic signage will detail prices and nutritional information, but also coupons and advertising.

The current version of the technology already offers some notable benefits for the grocery retailer. In particular, it can change prices throughout the store with a simple click or two, rather than needing to reprint and replace each individual tag by hand. Such capabilities mean that it can engage in more dynamic pricing, such as lowering the price for a product that seems to be moving slowly. It also implies more efficiency, because it requires far less human resources to change a digital program than it does to have stock clerks walk around to change paper tags.

For consumers, the implemented tags offer more information and promotions. For now though, shoppers need to pick up a handheld device at the store entrance to be able to access the benefits of the tags. In the near future, Kroger anticipates that it will be able to link with shoppers’ smartphones and mobile shopping lists. Thus for example, if a customer is planning on making lasagna that night, a shopping list might include ricotta, noodles, and a preferred brand of marinara sauce. As this shopper enters the sauce aisle, the digital tag under this specific marinara will light up, attracting the person’s attention and making it easier to find needed products quickly.

In a related benefit, Kroger anticipates that it can help people with dietary restrictions make their purchase selections more effectively. Someone with a gluten allergy can establish that they never want to buy products containing wheat, and the shelf tags might accordingly highlight alternative options for them.

Beyond expanding uses in its own stores and developing an app to allow people to use their phones to link with the smart tags, Kroger also is planning ways to make its technology available to other retailers, as another source of profit. It thus seems that someday soon, we may regard paper shelf tags with nostalgia, as symbols of a retail era from the past.

Discussion Question:

1. What are the benefits of dynamic pricing capabilities in a grocery store retail setting?

Source: Hayley Peterson, “How Kroger Hopes to Change Grocery Shopping as We Know It,” Business Insider, January 16, 2018