Stores

Walmart says new digital labels won’t be used for dynamic pricing

The big box retailer is rolling out new digital shelf labels across its footprint, but says the new tech won’t lead to real-time price adjustments.
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Bob Riha Jr/Getty Images

3 min read

The humble price sticker may be on its way out at the country’s biggest retailer.

Walmart last week announced plans to adopt “digital shelf labels,” or DSLs, at 2,300 stores—which is around half of its US footprint—by 2026 according to Reuters. The upside, according to the retail giant, is that store employees will now be able to update prices within minutes, speeding up a process that used to take two days and giving them more time to assist customers in other ways.

This may sound like a recipe for embracing dynamic pricing, which is the practice of adjusting prices in real-time, but Walmart stressed that the technology is more about speeding up its existing process for updating tags.

“The DSL program is not designed for dynamic pricing,” Walmart spokesperson Cristina Rodrigues told Retail Brew in a statement. “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.”

This isn’t the first time that Walmart has been unequivocal about its stance on dynamic pricing.

“It is absolutely not going to be ‘one hour it is this price and the next hour it is not,’” Greg Cathey, SVP of transformation and innovation at Walmart, told Reuters during the company’s annual shareholder meeting in Bentonville, Arkansas, last week.

Everyday prices: These comments come in the wake of a massive consumer backlash to Wendy’s announcement that it planned to test out dynamic or surge pricing on its items. The fast food chain has since insisted that the plan would not increase prices for customers, but the attempt inspired a New York lawmaker to introduce a law explicitly banning the practice.

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Senator Elizabeth Warren recently tweeted that it was “price gouging plain and simple…”

Walmart, by comparison, has historically emphasized consistency in its pricing. Here’s a blurb from the Walmart Digital Museum explaining the origins of its “Every Day Low Prices” strategy, which launched back in 1974: “‘Everyday’ implies ordinary, common. ‘Every Day’ reinforces the consistency of the pricing strategy.”

  • It is clear though that the technology Walmart is using is designed to support dynamic pricing.Vusion Group, the company behind the software, has touted that its “smart digital labels” allowed retailers to “dynamically update prices based on real-time data.” More recently, it said its tech “can improve pricing agility by automating low-value-added tasks through dynamic pricing actions.”

But digital shelf labels aren’t just for setting prices, dynamically or not. Walmart said that they will also simplify the process for replenishing stock. Employees will be able to flash an LED light on tags using a mobile device, which will signal that an item needs stocking. They will also be able to more easily locate items for online orders, speeding up the fulfillment process.

More competitive pricing: For Walmart’s competitors, however, DSLs could pressure them to adopt more dynamic and technology-supported pricing strategies.

Matt Pavich, a pricing expert at retail solutions provider Revionics, told Retail Brew that the move raises the stakes for retailers trying 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 retailers trying to compete will need to “price more dynamically.”

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.