Hot Spot, with 41 stores in North Carolina and South Carolina, and H&S Energy, which operates 297 locations in California, Oregon and Washington under the Power Market, Extra Mile and Pinnacle 365 banners, are investing in electronic shelf labels.
Hot Spot tested the technology in its store in Roebuck, S.C.
“You can change all your pricing from your corporate office, so it takes away your store people having to change tags or a customer finding a wrong tag and being upset. They’re 100% correct every day,” said Shawn Holmes, corporate marketing and merchandising manager for Hot Spot.
The labels also save the company on promotional signage, as the information is already on the digital tag. The company has found that this has helped its “two-for” sales, labor and the cost of the paper tags.
Now, the chain is rolling these out at its existing locations and in new-to-industry builds.
At H&S Energy, the digital shelf tags have impacted pricing and promotion strategy.
“The biggest shift is flexibility. Changing prices is easier, and pricing analysis is easier. Before, we had a strict procedure where prices were only updated on certain days of the week because of the labor required to print and replace tags. Now, whenever we feel a price needs to be adjusted, we can act on it immediately. That has changed the way we approach pricing day to day,” said Fidaa Mohrez, VP of operations for the chain.
As for promotions, the tags have different colors, allowing the chain to apply different designs to highlight specific items and support a wide range of marketing activity, including promotions, discounts, limited-time offers and more.
“It opens up creative options that were not practical with printed tags,” added Mohrez.
The digital shelf tags are still new for H&S Energy. So far, the most significant insight the tech has revealed is the impact on store-level efficiency.
“The labels have made our stores measurably more efficient. We have seen a clear decrease in pricing mistakes and a clear decrease in customer complaints related to pricing. We also believe it has improved the quality of merchandising in our stores, because store managers and team members now have more time to focus on the floor instead of on pricing tasks.” said Mohrez.
The investment in digital shelf labels, however, is not insignificant.
Due to last year’s tariffs, prices have risen since many of the tags are manufactured in Asia.
“The budget we originally set for the project was directly impacted, and that became one of the biggest challenges we faced — it led us to slow our pace. The technology is getting more expensive day after day because of tariffs and the broader economy,” Mohrez said.
The finance team is offering pushback, he continued, as they want to make sure the chain is “paying a fair price for the technology, rather than absorbing inflated costs driven by current economic conditions. Managing that balance is part of what we are working through as we continue the rollout.”
Both Mohrez and Holmes are aware of the possibility of legislation for the technology, but neither are concerned about that at the moment.
“The technology we’re using doesn’t raise any privacy issues or other compliance concerns,” Mohrez said. “We are aware that regulations around dynamic pricing are likely on the horizon. But that’s not a factor for us right now, because we haven’t made any decisions to implement that kind of pricing strategy. Our investment in electronic shelf labels was not made with dynamic pricing in mind, so any legislation in that space wouldn’t impact how we’re currently using the technology.”
Holmes added that Hot Spot is not planning on change prices at different times of the day.
“Some of the big retailers are thinking, ‘This is what it’s for.’ We’re not going to do that. We set it to a certain margin, and that’s where we keep it. We’re not going to raise the price at 5 o’clock because we know it’s busy,” he said. “That’s not the way we see it working.”
Instead, Hot Spot views the digital shelf labels as a benefit to store labor and saving money on tags and promotions
