Europe Leads Rising Electronic Shelf Label Adoption, Report Finds

While retailers are increasingly leveraging technology to enhance the in-store experience and address labor challenges, investments in micro-fulfillment centers have slowed slightly.

Jacqueline Barba

4/8/2024

As retailers increasingly leverage technology to enhance customer experiences, improve product availability and address labor challenges, global electronic shelf label (ESL) revenues are expected to surpass $6.2 billion by 2030, according to a report from technology intelligence firm ABI Research.

"Retail stores incorporate a lot of manual processes,” Ryan Wiggin, supply chain management and logistics industry analyst at ABI Research, said in a recent media release. “Workers are required to ensure shelves are stocked, inventory is managed, the store is clean and customers are supported. With a dwindling labor force, retailers are struggling to deliver to all areas effectively.”

As a result, Wiggin added that technologies that “remove the time-consuming tasks from associates such as ESLs and inventory scanning robots are receiving strong investment, with many retailers deploying the technologies chain-wide following successful pilot projects.”

Electronic shelf labels

ESL adoption has been steadily brewing over the years. For example, Best Buy first began piloting digital price labels from Sweden-based vendor Pricer in 2017 before embarking on a large-scale store rollout in 2019.

And in 2022, Instacart unveiled new Connected Stores technologies, which included Carrot Tags. The tech enables retailers to connect ESLs to Instacart Platform to add functionality such as “pick-to-light” capabilities, allowing shoppers, associates or Instacart couriers to select an item on their phone and flash a light on its corresponding shelf tag. Carrot Tags also help retailers display key information — such as gluten-free, organic, kosher, or EBT SNAP eligible products.

While the U.S. is no stranger to ESLs, Europe has led the charge, currently with the highest installed base at almost 600 million ESLs, according to ABI Research's “Retail Technologies: Electronic Shelf Labels (ESLs), Inventory Scanning Robots and Micro-Fulfillment Centers” report. The region also hosts the two largest ESL vendors, SES-imagotag (which just this year changed its name to VusionGroup) and Pricer, holding a combined market share of over 60%.

[Also Read: Pricer Explores Sustainable Electronic Shelf Labels]

However, increasing interest in North America and a sharp growth of smaller ESL vendors based in Asia is shifting the market, with a higher compound annual growth rate (CAGR) in shipments expected across these two regions at 16.1% and 27.7% respectively, per ABI.

In-store robots

Large-scale adoption of in-store robots seems to be more recent. The inventory scanning robot market is dominated by North America with over 75% of deployments in 2023, according to the same ABI report. Brain Corp completed its national rollout of robots with Sam's Club, and Simbe Robotics expanded its partnership with SpartanNash to bring its autonomous inventory robot Tally to 60 additional stores earlier this year.

And in 2023:

Ahold Delhaize’s Stop & Shop upgraded its Marty robots from Badger Technologies (a product division of Jabil) after expanding the tech to hundreds of Stop & Shop and Giant/Martin stores in 2019 following successful pilot programs. (The Marty enhancements included the ability to flag out-of-stocks and detect misplaced items.)
Wakefern Food Corp.’s ShopRite expanded Tally robots to more stores after a 20-store pilot that began in 2022.
BJ’s Wholesale Club rolled out Tally robots chainwide to collect shelf data and improve in-store efficiencies.

Micro-fulfillment centers

In addition, ABI’s report also found that micro-fulfillment experienced a drop from the initial hype, but global investment in micro-fulfillment centers (MFCs) is expected to surpass $5 billion by 2030 as retailers steadily explore and invest in MFCs to deliver on curbside and online fulfillment.

Grocery is a prominent industry for MFC investment, and many retailers have established partnerships with key automation companies to deliver on their MFC strategies, such as H-E-B and Ahold Delhaize with AutoStore, Tesco with Dematic, and Albertsons Cos. and Hy-Vee with Takeoff Technologies.

"Technologies deployed by a grocery chain will not be the same as a big-box retailer, or a cosmetics store, meaning there is not a one size fits all approach when it comes to retail digitalization,” Wiggin said. “ABI Research expects retailers spending on advanced technologies to continue to grow over the coming years, with a broad range of technologies finding their niche in particular segments as they tackle the most pressing pain points.”