Electronic Shelf Label Market - Global Outlook & Forecast 2023-2028

INDUSTRY OVERVIEW

The global electronic shelf label market was valued at USD 1.29 billion in 2022 and is expected to reach USD 3.29 billion by 2028, growing at a CAGR of 16.84%. Over the past few years, the adoption of ESL has grown 3x times, validating the opportunity for expansion in the coming years. Retail stores are increasingly adopting automation facilities. Alongside improving the operational capacity, reduction in wastage and labor costs are major reasons for growing adoption in retail formats. The evolution of ESL has been a milestone in the industry as it makes the retailer's work quicker and more efficient. With the successful installation of real-time solutions like ESL, the electronic shelf label market vendors can boost their profitability, revenue, and stock management and reduce labor costs. The ESL ecosystem empowers retailers to adopt dynamic pricing strategies, a major attribute for determining cost and profitability.

The retail landscape in North America has witnessed many changes over the past decade. Social media, convenience, click-and-collect, contactless payments, smart shelves, automation, and smartphones have reshaped the industry. With the decline of brick-and-mortar stores in the region not so far, upgrading the stores with technical and time-saving solutions that enhance the customer shopping experience can be a game-changer to remain competitive in the industry. Mobile technologies like BLE and NFC in the region are also expected to influence every stage of shopping in the stores during the next five years. They are also expected to influence personalized promotions, geotargeting, in-store research, payment capabilities, and price check features. More than 65% of the shoppers are also willing to adapt to contactless payments powered by technologies that can further support the growth of the electronic shelf label market in the region.

MARKET TRENDS & DRIVERS

The Growth in Retail Automation
Automation and digitalization are considered the next big opportunity for enhancing the shopper's experience in the retail industry. Retail automation is gaining momentum owing to the effective maintenance and management that supports the store's success. With consumers expecting a well-maintained and sophisticated shopping environment, technologies like service automation are turning the expectations into a reality. The ESLs are getting more advanced with the entry of new players in the electronic shelf label market alongside leaders like SES-imagotag and Pricer. The latest generation of e-paper has been an absolute game-changer for retailers promoting overall effectiveness and elevating customer satisfaction levels.

Operational Efficiency and Profitability
Consumers today expect more retail features than before to make the shopping experience more effective, convenient, and rewarding. This has led to the growth in the adoption of features like ESL, which supports customer-centric experiences like click and collect, scan and go, and pick-up in-store options. The consumers' shopping journey inside the retail environment is also powered by the latest digital technologies deployed through automation and innovations like ESL.

INDUSTRY RESTRAINTS

High Initial Investments
Despite the growing trend for retail automation and IoT domination in the industry, the huge investment cost hinders the electronic shelf label market growth, especially among the growing markets of APAC and Latin America, which are highly price sensitive. Most small and medium-scale retail premises are concerned with the Return on Investment factor, which is highly questionable in uncertain business models.

SEGMENTATION INSIGHTS

INSIGHTS BY TECHNOLOGY
The RFID technology segment is expected to be the largest in the global electronic shelf label market. The RFID platform is the most preferred owing to its benefits, like seamless communication without the line-of-sight issue. The RFID tag readers can track the active RFID tags to manage valuable assets and products in terms of stocking and inventory. It also automatically identifies the target objects with the help of radio signals and registers and stores the object information. With the use of RFID connectivity, tracking management has become handier.

INSIGHTS BY END-USER
The global electronic shelf label market by end-user segments such as supermarkets & hypermarkets, convenience stores, departmental stores, drug stores, and others segments. Supermarkets and hypermarkets tend to have the highest adoption rate for ESLs, accounting for over 50% of the electronic shelf label market share in 2022 revenue. One of the major reasons for the adoption can be associated with the huge stocking of commodities on display which is more difficult to facilitate dynamic pricing. The buying power in the retail format is also more significant owing to the economies of scale and efficient supply chain management within the in-store premises. Adopting ESLs in the retail format is also highly beneficial and convenient, saving labor costs and time. Moreover, for supermarkets and hypermarkets, the ESLs must be highly effective with powerful batteries ideal for multiple prices updated daily. It is also recommended that the vendors offer labels in multiple sizes and features to meet the needs and visuals of various sections in the store.

INSIGHTS BY PRODUCT
The e-paper product segment is expected to dominate the global electronic shelf label market. E-paper technology is the most rapidly growing platform for adopting electronic shelf labels. The segment's major advantage can be attributed to its bi-stable display, which can be maintained even when the external electric field is removed, leading to power consumption only when there is an update in the display information. It is also widely preferred for its better outdoor visibility and reduced eye strain owing to the e-ink display. The ability to display the information in vibrant colors like white, black, and red is another major advantage for the rising preference in superstores and convenience stores.

INSIGHTS BY DISPLAY SIZE
The less than 3 inches display size segment is expected to be the largest in the global electronic shelf label market. The significant growth in the less than 3 inches segment is due to the increasing demand for these display sizes from the tier I and tier 2 retailers that depend on these label sizes due to the greater number of offerings available in the retail stores.

INSIGHTS BY COMPONENT
The global electronic shelf label market by component is categorized into displays, batteries, transceivers, microprocessors, and others. The display component segment is expected to dominate the global industry. ESL modules use electronic paper (E-paper) displays, multi-color displays, 7-page displays, and touchscreen to show the current product price to the customers.

GEOGRAPHICAL ANALYSIS

The global electronic shelf label market is highly concentrated in developed nations but still niche and fast growing in developing APAC and Latin America countries. The growth can also be attributed to the presence of global vendors like Pricer and SES-imagotag in the European region and regional vendors in China and Japan. Europe was the dominant electronic shelf label market with a huge presence for ESL systems across all retail formats, including apparel stores, drug stores, and electronics retail. The region is also expected to remain the industry leader by the end of 2028 as it grows with the regional trend and consumer demands. Countries like France, Germany, and Sweden are quickly approaching the inflection point, further propelling the adoption pattern. It is closely followed by countries like Australia, the US, the UK, and Brazil, where the significance of adoption is higher. Real-time promotions and inventory management are other major factors driving the growth of the electronic shelf label market in underpenetrated markets.

COMPETITIVE LANDSCAPE

The global electronic shelf label market is considerably fragmented, where players like Pricer, SES-imagotag, and Displaydata are by far the largest revenue generators across the potential markets in Europe, APAC, and North America. Furthermore, some recognizable partnerships include Hanshow Technologies and Ahold Delhaize since 2018, where the ESL solution provider has installed its base across European countries like Belgium and Greece, which are estimated to be fast-growing markets.

Based on the global retail trends, the industry is expected to witness the growth of domestic vendors in growing economies as the future of retail is based on digitalization and real-time cost-saving solutions in the shopping space. Accordingly, the electronic shelf label market vendors will try to differentiate their offerings through technology, cloud system, hardware, battery, price, durability, add-on features, and services. The success and profitability of the vendors also depend on the range of SKUs, width, and product line of the retail store commodities that depend on the number of tags to be installed for optimum utilization. A considerable ROI scheme, less than two years on average, is often recommended in the industry. In ever-changing technology-based solutions like electronic shelf labels, the vendors must offer solutions based on the trends and platforms with which the stores are more compatible.

ABOUT THE REPORT

The global electronic shelf label market is provided for the forecast years 2023 to 2028 and a base year 2022. The market is segmented by technology, end-user, product, display size, component, and geography for the years considered. The report provides a holistic approach to the global electronic shelf label market, enabling customers to analyze the industry thoroughly.