Introduction 

Electronic shelf labels (ESLs) are transforming the grocery industry by enabling grocery retailers to make real-time price updates across locations. But beyond improving store operations, ESLs also create valuable pricing data that helps finance teams automate invoice validation, reduce vendor disputes, and improve accounts payable security. 

Read on to learn how some of the most progressive grocery retailers are starting to tap into ESL pricing intelligence to drive smarter AP automation. 

What are electronic shelf labels?

Electronic shelf labels (ESLs) are digital price tags placed on retail store shelves that display pricing and other key product information. They’re becoming increasingly prevalent in grocery retail.

ESLs connect wirelessly to a centralized pricing system, allowing grocery retailers to update pricing, promotions, and product information for one or more products in real time, without the need to manually swap out paper price tags.  

From a shopper’s perspective, ESLs typically take the form of low-power electronic paper (e-paper) or LCD displays that are easy to read and take up very little energy. Beneath the surface, the labels communicate with a store’s pricing software via wireless technologies such as radio-frequency, WiFi, or Bluetooth, allowing them to receive updates whenever pricing, product information, or promotions change. Each label is linked to a specific product, which allows retailers to make changes to a single product or across thousands of items in a matter of minutes. 

Today, grocery retailers use electronic shelf labels for a variety of use cases. This technology can help grocers launch promotional pricing, adjust quickly to supplier cost changes, keep prices consistent across multiple stores, and ensure shelf prices match up with what consumers see online. ESLs can also be an effective tool for cutting labor costs and decreasing pricing errors that can frustrate shoppers, cause headaches for the operations team, and chip away at thin margins. 

Why are grocery retailers investing in electronic shelf labels?

Price changes are a fact of life for grocery retailers. But factors such as inflation, supplier cost fluctuations, and labor shortages make it difficult for grocers to manually manage these ongoing changes. Increasingly, grocery retailers are investing in electronic shelf labels as part of a broader grocery pricing automation strategy. 

This technology helps make pricing updates faster, more accurate, and easier to manage across multiple locations.  In fact, according to the National Retail Federation, ESLs have quickly evolved from a niche technology in European and Asian markets to a “global phenomenon.”

Here’s a closer look at some of the key reasons grocery operators are making the investment. 

Faster price changes

Grocers are bombarded with ongoing price changes thanks to factors such as supplier cost changes, competitive pricing, and limited-time promotions. But manually updating thousands of paper shelf tags is time-consuming, which can delay the rollout of new pricing strategies. 

ESLs allow retailers to push pricing updates from a centralized system directly to store shelves in minutes. Stores can act more quickly and help ensure customers see the correct price at checkout. 

Labor savings

Manual price changes require employees to print, sort, distribute, and replace thousands of shelf tags regularly. It’s a time-consuming, never-ending process, and grocery retailers often struggle to hire and retain the staff needed to take it on. 

ESLs automate price updates, which means it takes less human labor to maintain accurate shelf pricing. Stores can hire fewer employees, and existing store staff can focus on higher-value tasks that improve customer experience. 

Dynamic promotions

Today’s grocery shoppers expect frequent promotions, personalized offers, and consistent pricing across digital channels and brick-and-mortar stores. But grocers that manually coordinate promotions risk delays and pricing inconsistencies that can frustrate shoppers. 

Grocers that use ESLs can schedule promotional pricing in advance or push it live in real time. They can launch flash sales, coordinate omnichannel promotions, and ensure shelf prices match digital advertisements without needing to manually update shelf tags throughout the day.

Fewer pricing errors

When shelf prices are updated by hand, mistakes are inevitable. These mistakes can frustrate customers and cause back office headaches. Plus, with grocery profit margins sitting around 1-3%, even small pricing errors can take a toll on profitability. 

ESLs receive updates directly from a centralized pricing system, which helps keep pricing consistent across stores and sales channels. Shoppers have better experiences and retailers avoid the operational headaches that stem from outdated or incorrect pricing information. 

How do electronic shelf labels improve grocery AP? 

Often, ESLs are viewed primarily as an operational investment. As such, grocery retailers measure impact by focusing on factors like labor savings, pricing accuracy, and the ability to launch promotions faster. The less obvious benefit of electronic shelf labels is that every price update creates valuable data that can have a significant impact on downstream finance processes. 

Here’s a closer look at the impact.  

Every price changes creates a digital audit trail

Every time a price changes, the ESL system records when the update happened, which products were affected, and what price was displayed. This provides retailers with a centralized, timestamped history of pricing activity.

A digital audit trail is especially helpful when questions inevitably come up about supplier invoices. Finance teams can quickly check historical pricing data to understand exactly what happened, instead of spending time investigating and attempting to piece everything together. 

Faster invoice verification 

Grocery invoices often get complicated with frequent supplier cost changes, promotional pricing, and high transaction volumes. Manually investigating invoice price discrepancies can slow down processes and take up valuable AP time.

When ESL pricing data is combined with grocery invoice automation and other pricing sources, finance teams have more context for validating invoices. If an invoice has an unexpected variance, AP teams can reference timestamped pricing records alongside contracts, cost files, and other supporting documentation to investigate the issue more efficiently. This allows staff to focus on true exceptions.

Fewer vendor disputes and chargebacks

When finance teams don’t have a reliable record of pricing activity, resolving disputes often involves multiple emails, phone calls, and document requests. All of this back and forth takes valuable time and can put major strain on supplier relationships. 

A timestamped pricing history helps AP teams determine whether a pricing change matches up with the timing of an invoice. This makes it faster and easier to resolve disputes, process chargebacks, and recover costs. 

Better financial controls

When pricing history data from ESLs is connected to the right finance systems, grocery retailers have better visibility into pricing activity throughout the entire invoice lifecycle. AP teams can identify, investigate, and address discrepancies earlier in the process, rather than after invoices have already been paid. 

How do electronic shelf labels fit into grocery AP automation?

While ESLs are perhaps best known as a store operations technology, they also create a detailed digital record of every pricing change that can improve finance processes. When pricing updates flow from store operations into AP automation, grocery retailers gain better visibility into invoice pricing, reduce manual verification, and automatically flag potential discrepancies before invoices are paid. 

The workflow below illustrates how ESLs and AP automation work together to drive impact for grocery finance teams. 

Automated invoice matching

Traditional invoice reviews often require AP staff to gather pricing documentation from multiple sources in order to determine whether an invoice is accurate. But for grocery operators that are managing thousands of invoices, those manual processes aren’t sustainable.

AP automation streamlines grocery invoice matching by comparing invoices against contracts, cost files, purchase orders, and other pricing records. When businesses have pricing history from ESL systems, they have additional context that can help explain why a variance occurred and whether it needs further investigation. 

Better exception management

Not every invoice needs to be manually reviewed. But for grocers managing thousands of invoices across multiple locations, it’s a challenge to identify the ones that do. 

Rather than manually reviewing every invoice, automation helps AP teams determine which ones truly require additional review. Finance teams can keep routine invoices on track while focusing their time where human judgment is truly needed. 

Connected store operations and finance

Electronic shelf labels are just one piece of a broader technology ecosystem. When ESLs are integrated with ERP systems, pricing platforms, and AP automation software, they help create a more connected flow of information across the business.

This type of connected workflow is indicative of a broader shift toward connected retail automation. According to Deloitte, leading retailers are moving towards connected operating models that transform real-time store data into enterprise-wide intelligence. ESL pricing data is an example of how operational data can have an impact beyond the sales floor. 

What pricing problems do electronic shelf labels help solve?

Pricing issues are inevitable in grocery retail, but these challenges don’t have to cause unnecessary work for store operations or finance teams. Electronic Shelf Labels help retailers improve pricing accuracy and create better visibility into pricing changes. When paired with AP automation, these improvements can also streamline invoice processing and reduce costly, time-consuming pricing disputes. 

Here’s a look at how ESLs paired with AP automation can help grocery AP teams address some of their most common pricing problems.

ESLs produce valuable pricing intelligence. When that data is connected with grocery AP automation, retailers have a more complete picture of pricing activity, from the moment a price changes on the shelf to the moment a supplier invoice is approved. 

The future of grocery pricing is connected

It’s clear that electronic shelf labels can help retailers improve pricing accuracy, reduce manual work, and adapt quickly to ever-changing market conditions. The next opportunity for grocery operators is to tap into the data generated by ESLs to improve downstream finance processes. 

When pricing information is connected to the right finance systems, it can help streamline invoice validation, reduce vendor disputes, and improve financial controls. But this can’t happen when organizations continue to treat pricing and accounts payable as two separate processes. 

Grocery retailers that see the largest ROI will be those that connect ESL systems with AP automation. These teams will turn real-time pricing data into actionable financial insights so they can work more efficiently, protect razor-thin margins, and make smarter decisions that move the business forward. 

Ottimate’s grocery AP software helps top operators bridge the gap by connecting AP automation with the pricing and financial data that drives smarter invoice processing. Curious what that looks like for grocery operators?