Electronic Shelf Label Market – Snapshot
Electronic shelf label (ESL) is an emerging system used for displaying product pricing and product information on shelves by using wireless communication networks such as radio frequency (RF) technology, and infrared (IR) technology to communicate with the back-end database. These labels help to eliminate the discrepancies in selling price of the products and displays reliable pricing to the customers. Moreover, it helps to enhance the operational efficiency of the store by eliminating the need to check and update paper labels. It also enables retailers to update pricing as frequently as needed and minimizes pricing errors for customers. With increasing applications in most end- use sectors, from organized retail stores to specialty stores, consumer electronics sector to drug stores/pharmacies, ESL systems have grown to become a necessity for nearly all stores dealing with electronic pricing and shelf management.
In more recent times, considerable technological advancement has taken place in the ESL market. Organized retail sectors and specialty stores widely use ESL systems for displaying products pricing on shelves. Rising demand from retailers for secure, fast, and cost efficient price labeling has augmented the demand for ESL systems. Growing adoption of store automation in retail stores across the world is primarily driving demand for ESL systems.This is anticipated to drive the market over the forecast period. Moreover,technological advancement and stringent regulations against misleading product prices is expected to fuel the ESLmarket in the near future. However, lack of awareness and usefulness of ESL systems, and high initial investment is projected to inhibit the growth of the market across the world. The ESL market is likely to reach a value of US$ 2,517.9 Mn by 2026 from US$ 497.7 Mn in 2017, expanding at a CAGR of 20.0% during the forecast period.
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Based on component, the electronic shelf label market can be segmented into hardware, software and services. Hardware ESL system is the most effective way of displaying product pricing on shelves by using wireless communication networks. The hardware segment accounted for a significant market share globally in 2017 and is projected to hold its leading position over the forecast period. The hardware segment can be divided into labels (product) type and infrastructure. Labels type is further categorized into LCD ESL, segmented E-paper ESL, and full-graphic E-paper ESL. Under labels type, full-graphic E-paper ESL segment accounted for major share of the market due to its multi-color displays, high aesthetics, and wide visibility display. Full-graphic E-paper ESL is energy efficient and is able to project graphical objects such as callouts and logos that facilitate real-time product positioning. Thus, retailers are gradually adopting this label type. LCD ESL labels type sub-segment also accounted for prominent market share due to its low power consumption and bi-stable features. Infrastructure segment is sub-segmented into access points (transceivers & base stations) and handheld devices.
Software segment is projected to expand at a rapid pace during the forecast period. This segment is further bifurcated into pricing and shelf management software, and other digital infrastructure. Pricing and shelf management software sub-segment held the leading market share in 2017 due to its huge adoption rate among organized retailers.The services segment is categorized into support and maintenance, installation, and training and consulting. Among these, installation service sub-segment occupied major share of the global ESL market in 2017,whereas training and consulting sub-segment is projected to expand rapidly over the forecast period.
Based on communication technology, radio frequency (RF) technology segment accounted for the major share in the global electronic shelf label market in 2017 and is projected to maintain its position in the coming yearsdueto its extensive usage in diversified technology segments such as Wi-Fi, Bluetooth Low Energy, ZigBee, and Z-wave. This technology enables bi-directional communication by transmitting pricing and product information to the ESLs and simultaneously receives successful feedback updates. The market for NFC technology is expected to grow at a significant CAGR during the forecast period. It enables communication between tags and labels, and shoppers and store employees to examine the tags and labels manually.This technology is increasingly adopted in devices such as smartphones and POS systems. Thus, retailers are gradually integrating this technology with existing handheld devices to lower the overall installation cost of these labels. As a result, application of NFC technology in ESL systems is expected to witness potential growth in the coming years across the globe.
In terms of end-use, the global ESL market is categorized into organized retail stores, drug store/pharmacies, consumer electronics (standalone), and other specialty stores. Organized retail stores segment includes supermarkets & hypermarkets, and malls. The organized retail stores sector is the prominent user of ESL, while the other specialty stores sector is projected to expand at a rapid pace over the forecast period. The supermarkets & hypermarkets sub-segment accounted for a prominent share of the organized retail stores segment in 2017 due to rising adoption of self service, and is expected to expand steadily during the forecast period. Others specialty stores segment is another major retail store format in the ESL market and is expected to expand at a rapid pace over the forecast period. Other specialty stores segment is bifurcated into multi brand stores and company owned/brand stores. Among these, multi brand stores sub segment accounted for the major market share in 2017, whereas company owned/brand stores segment is projected to expand significantly over the forecast period.
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The market in Europe is anticipated to contribute significantly to revenue in the near future due to a large base of existing users in the region. The market in North Americais anticipated to follow a similar trend between 2018 and 2026. Furthermore, the market in Asia Pacific and South America is likely to expand at a robust CAGR in the coming years.
Attracted by the progressively expanding ESL market and underlying embryonic demand, many retailers are driven to invest in advanced electronic shelf label hardware and software systems. Software developers and integrators and professional service providers across industries are strengthening their position in the ESL market. Product innovation and upgrade of research and development are constantly taking place in the ESLmarket. SES-imagotag is the global leader and specialized in digital price tag and shelf edge automation systems.
Prominent players in the ESL market and profiled in the study include Altierre Corp., Displaydata Ltd., Pricer AB, SES-imagotag, E Ink Holdings, Inc., Teraoka Seiko Co., Ltd. and many others.