Walmart is introducing new digital shelf labels in its stores, but assures that the new technology will not result in real-time price changes.
The humble price sticker may soon be a relic of the past at the country’s largest retailer, Walmart. In a significant move, Walmart announced last week its plans to introduce “digital shelf labels” (DSLs) at 2,300 of its stores—about half of its U.S. locations—by 2026, according to Reuters. This initiative aims to streamline the price updating process, which currently takes up to two days, reducing it to just minutes. This efficiency will allow employees to focus more on assisting customers in other capacities.
This technological advancement might initially suggest a shift towards dynamic pricing—the practice of adjusting prices in real-time based on demand and other factors. However, Walmart has emphasized that the primary purpose of the DSLs is to expedite the existing process of updating price tags, rather than to implement dynamic pricing.
“The DSL program is not designed for dynamic pricing,” stated Walmart spokesperson Cristina Rodrigues in a statement to Retail Brew. “Walmart adheres to Everyday Low Price. The DSLs make it easier for associates to add pricing on shelves for new products, and update pricing related to planned Rollback and Final Clearance products.”
Walmart’s stance against dynamic pricing is not new. Greg Cathey, SVP of transformation and innovation at Walmart, reiterated this point during the company’s annual shareholder meeting in Bentonville, Arkansas. “It is absolutely not going to be ‘one hour it is this price and the next hour it is not,’” he assured.
This commitment to consistent pricing comes amid significant consumer backlash against dynamic pricing practices. For instance, Wendy’s recently faced criticism over its plan to test dynamic or surge pricing on its menu items. Although Wendy’s insisted the plan would not increase prices for customers, the proposal provoked enough concern to prompt a New York lawmaker to introduce legislation explicitly banning the practice. Senator Elizabeth Warren criticized such pricing strategies as “price gouging plain and simple.”
In contrast, Walmart has historically prioritized price consistency. The company’s “Every Day Low Prices” strategy, launched in 1974, underscores this commitment. The Walmart Digital Museum explains the philosophy: “‘Everyday’ implies ordinary, common. ‘Every Day’ reinforces the consistency of the pricing strategy.”
Despite Walmart’s assurances, the technology underpinning its DSLs is indeed capable of supporting dynamic pricing. Vusion Group, the company behind the software, boasts that its “smart digital labels” enable retailers to “dynamically update prices based on real-time data.” Additionally, Vusion claims its technology “can improve pricing agility by automating low-value-added tasks through dynamic pricing actions.”
However, digital shelf labels offer benefits beyond price adjustments. Walmart notes that these labels will also streamline stock replenishment. Employees can use a mobile device to trigger an LED light on the tags, indicating that an item needs restocking. This feature will also facilitate locating items for online orders, accelerating the fulfillment process.
For Walmart’s competitors, the introduction of DSLs may present new challenges. Matt Pavich, a pricing expert at retail solutions provider Revionics, explained to Retail Brew that this move raises the stakes for other retailers attempting to match or beat Walmart on prices and promotions. “Once this new technology is rolled out, Walmart can move as quickly as it wants on prices and do it cheaper and with higher compliance than their competition,” he said. This “new reality,” he added, means that retailers striving to compete will need to “price more dynamically.”
In summary, while Walmart’s adoption of digital shelf labels is primarily intended to streamline price updates and improve operational efficiency, it also highlights the growing importance of technology in retail pricing strategies. The move reaffirms Walmart’s commitment to its “Every Day Low Prices” strategy, even as it adopts cutting-edge technology that could potentially support more dynamic pricing models in the future. As competitors adjust to this new landscape, the retail industry may see a broader shift towards integrating technology to enhance pricing agility and customer service.
