Online retailers like Amazon.com Inc. change prices on many items frequently to undercut rivals, but that’s harder to do in bricks-and-mortar stores where items carry physical price tags. Furniture, electronics and appliance retailer Nebraska Furniture Mart has solved that problem by putting electronic tags on store items in price-sensitive categories and updating prices daily. It then built on the technology to make it easier for consumers to find items in its three massive stores.
The retailer each night scans 35,000 SKUs in the electronics and appliance categories on the e-commerce sites of 18 retail competitors—including Amazon, Best Buy, Home Depot and Lowe’s—and, before its stores open in the morning, updates the prices on the electronic labels if necessary to meet its guarantee of offering the lowest price.
“We’re taking the work out of our customers having to go to competitors to get pricing,” says Jeff Douglas, general manager of e-commerce at Nebraska Furniture Mart, No. 368 in the Internet Retailer 2015 Top 500. “We’ve already done that for them and lowered our prices for them.
He says electronic shelf labels haven’t taken off largely due to the expense. Each digital label costs $5-$10, based on published reports and current online prices. A 2014 report by ABI Research projects global sales of electronic shelf labels will grow sixfold to almost $2 billion and that retailers that deploy the technology typically make back the initial investment in 18 months. Among U.S. retailers that have deployed electronic shelf labels in some stores are The Home Depot Inc., No. 10 in the Top 500, and Kohl’s Corp., No. 22.
The retailer also built on the digital price-tag system to help shoppers find their way around the three large Nebraska Furniture Mart stores. The stores in Omaha, Neb., and Kansas City, Kan., are each about 420,000 square feet, and a new store in The Colony, Texas, a suburb of Dallas, is 560,000 square feet. By comparison the typical large-format Wal-Mart supercenter in the United States is 182,000 square feet.
Because the infrared transmitters and digital tags identify the location of each product, Nebraska Furniture Mart only needed a way to locate a shopper in a store to show her the way to the product she wants. To do that, the retailer added beacons—small wireless transmitters that send signals to mobile phones—to its stores that identify where a shopper with the retailer’s mobile app is in a store, based on the location of her phone. The retailer introduced in April its Wayfinder app that lets a consumer in a store search for a product and get a map showing where it is as well as turn-by-turn directions on how to get there.
The retailer promotes the app with signs in its stores and on flat-screen displays in the new Texas location. The Texas store has Wi-Fi, making it easier for shoppers to use their mobile phones in stores, and Nebraska Furniture Mart is adding that wireless technology to its other two stores, Douglas says.
Forrester’s Silverman is less enthusiastic about the app than the electronic price tags. He says fewer than 5% of consumers have used mobile apps to find their way around stores, according to Forrester data. Navigation apps in stores are not always accurate, he says, “plus it’s much easier to just ask an associate where a product is.”
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