Electronic Shelf Label (ESL) Market Size, Share & COVID-19 Impact Analysis, By Type (LCD based and E-paper based), By Technology (Vendor Facing Technology and Consumer Facing Technology), By End-use Industry (Hypermarket/ Supermarket, Non-food Retail Stores, Specialty Stores, and Others), and Regional Forecast, 2020-2027

The global electronic shelf label market size was valued at USD 630.8 million in 2019 and is projected to reach USD 2,857.6 million by 2027, expected to grow at a CAGR of 20.8% during the forecast period. Europe dominated the electronic shelf label market with a market share of 48.19% in 2019.

The increasing shift of shoppers towards e-commerce platforms has forced retailers to maximize the in-store experience of the customers by deploying interactive and cost-effective solutions such as electronic shelf label. Many consumers are more likely to appreciate the personalized experience created by the ESLs. Their ability to update prices in real-time and implement promotional strategies with agility across the store is likely to drive the ESL market growth.

Outbreak of COVID-19 to Impact the ESL Deployment Projects and Production Capacity in the Short-Term

The outbreak of COVID-19 has disrupted the production capacity of the electronic shelf label manufacturers in the first quarter of 2020. As a result of the measures imposed by the government globally to mitigate the risk of pandemic COVID-19, the global market is expected to demonstrate a steady growth. Many major market players such as SES-imagotag, E-Ink Holdings, have experienced a slowdown in the sales operation majorly in the first quarter of 2020.

The restrictions on transport and closing of manufacturing plants due to lack of workforce is likely to hinder the production capacity of the ESL manufacturers for a short time interval. Apart from production capacity, the several lockdown measures imposed by governments have led to the closures of retail stores. This has led to an unprecedented spike in e-commerce adoption, causing a dent in physical sales.

The global economic downturn caused by COVID-19 pandemic is likely to impede the international business investments in the market. The reigniting trade war between the United States and China has hindered electronic labels shipments during the end of 2019. However, electronic shelf label companies forecast a positive outlook for the second half of 2020 as the demand for this is gradually increasing. For instance, the market player E Ink Holdings witnessed a decline in its electronic labels shipments during the end of 2019, however, the company has plans to increase its production capacity as demand for e-paper has seen an upward trend during September 2020.

LATEST TRENDS

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Rising Popularity of In-Store Internet of Things (IoT) to Create Traction for the Market

In-store Internet of Things is likely to gain significant importance in the coming years. For example, in January 2020, SES-imagotag partnered with Qualcomm Technologies International Limited. Through this collaboration, the companies aim to develop an advanced high performance, ultra-low power, and enhanced security connectivity solution to support adoption of IoT technologies in retail stores on a large scale. The outcome of such collaborations and partnerships is likely to benefit the retailers, as they can refurbish them in-store infrastructure by leveraging digital and IoT technologies and build automated and data-driven business operations.

Growing Inclination of Retailers towards Retail Automation to be a Prominent Trend

In-store automation enables retailers to deliver a seamless omnichannel experience and differentiate themselves from competitors. A reliable and robust retail automation solution would provide an incentive for customers to visit the store again. Real-time product price and promotional updates are one of the most essential aspects of retail automation, wherein the ESLs prove to be the optimal solution.

For instance, in August 2018, Bauhaus, an international hardware chain, chose Displaydata for an ESL project at its store in Tilst, Denmark. Bauhaus makes daily price changes for a large assortment of products at its stores across Europe. By deploying these solutions from Displaydata, the company has been able to transform the pricing process and enhance the operational efficiency.

DRIVING FACTORS

Increasing Demand for ESL-enabled Inventory Management to Foster Growth

The increasing complexities in managing large size warehouses or retail stores are driving the demand for smart inventory management. ESL proves to be a potential solution for the out-of-the-stock problem in the retail industry. According to the Institute of Grocery Distribution and IGD Services analysis, the out-of-the-stock industry-wide is approximately 4.5%. 

The advanced ESLs integrated with consumers’ smartphones and supported by advanced analytics are likely to enhance smart inventory management operations. Similarly, increasing adoption of vendor managed inventory (VMI) and stock keeping units (SKU) is likely to pave new opportunities for the market players.

 Increasing Efforts of Retailers to Offer Enhanced In-Store Customer Experience to Augment Market Growth

As e-commerce industry growth continues to gain pace, customers are explicitly demanding for a more enhanced digital and connected physical shopping experience. According to a report by Displaydata 2018, price has the greatest influence on buying decisions at the shelf edge. The report also states that pricing is the most essential factor that the customers wish to see displayed. This shows that retailers are more likely to build new ways for building customer relationships by driving pricing and promotion accuracy across the stores. These factors are expected to drive the demand for electronic shelf label deployment across retail stores.

RESTRAINING FACTORS

High Initial Costs Associated with the Deployment of ESL to Hinder Growth

High initial deployment and implementation costs are expected to limit the adoption of ESL solutions in the coming years. The spread of the novel Coronavirus has turned the investments of retailers towards e-commerce platforms. This has significantly impacted the investments in in-store digital technologies. These are some of the factors that are likely to restrict the electronic shelf label market growth.         

SEGMENTATION

By Type Analysis

E-Paper-based ESL to Account for Maximum Market Share

By type, the market is classified into LCD based and E-paper based. E-paper based ESL solutions are expected to hold major market share. E-paper’s ability to project objects in graphical form, coupled with the promise of enhanced energy efficiency, contributes to the major market share of this segment.

Market players are expected to prefer e-paper for ESL offerings. For example, in May 2020, Innolux Corporation and E Ink Holdings Inc. collaborated to develop large-sized Advanced Color ePaper (ACeP) panels. Through this collaboration, the companies aim to grow the e-paper business and expand the e-paper ecosystem. These e-papers will be mainly used for in-vehicle advertisement signage and retail signage, among others.

LCD devices are comparatively costlier than the e-paper hence exhibits less adoption. For instance, a Kindle paper white costs USD 119 whereas the mini iPad with Retina display costs USD 400. Hence, LCD based segment is forecast to have moderate market growth.

By E-paper Type Analysis

Graphic E-paper to Demonstrate Excellent Growth

The e-paper based segment is further categorized into the type of E-paper, including segment e-paper and graphic e-paper. E-paper exhibits high contrast capabilities and large viewing angles, along with reflective technology with maximum white background, which are expected to fuel the demand for graphic e-paper. The market players provide customized segment e-paper solutions depending on the requirement of the retailers.

By Vendor Facing Technology Analysis

Reliable and Cheap-Cost Installations to Fuel the Demand for IR Systems-based ESL

Based on vendor facing technology, the global market is classified into infrared and radio frequency. The radio frequency segment is expected to hold a major market share, whereas the infrared technology segment is likely to exhibit a remarkable growth rate during the forecast period.

Market players offer ESL solutions based on infrared or radio frequency. For instance, Pricer AB offers infrared (IR) technology-based in-store digital solutions to enhance store performance and customer experience. Similarly, SoluM offers radio frequency-based ESL solutions that operate in 2.4 GHz and 900MHz RF systems.

By Consumer Facing Technology Analysis

Near-Field Communication to be the Most Preferred Consumer Facing Technology

By consumer facing technology, the market is divided into Bluetooth low energy and near field communication (NFC). Advancements in wireless technologies such as near-field communication (NFC) and Bluetooth low energy (BLE) are likely to drive the market towards a higher growth trajectory.

Near field communication (NFC)-enabled electronic shelf labels are forecasted to become the most demanded technology among customers as well as retailers. NFC technology facilitates advanced stock management by enabling dynamic product pricing and promotional updates and simplifying customer interactions with NFC-enabled smartphones.

BLE beacon technology is expected to remain popular among the retailers. This technology enables market players to use BLE in Internet of Things applications such as beacons and asset tracking, among others. Also, BLE’s ability to work with mesh networks is likely to contribute to its adoption in the near future. However, BLE is expected to be mostly adopted by the large-sized retailers because of its wide coverage area.

By End-use Industry Analysis

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Supermarkets and Hypermarkets to Remain the Important Source of Revenue for Market Players

Based on the end-use industry, the market is divided into hypermarket/ supermarket, non-food retail stores, specialty stores, and others. Supermarkets have a large area with multiple floors and big size warehouses to store the assortments that drive the need for effective inventory management across these stores. Hence, hypermarkets/ supermarkets deploy in-store digital technologies such as ESL to optimize labor cost and improve customer experience.

Non-food retail stores such as fashion and apparel and electronics retail stores are expected to be the potential customers for electronic shelf label.

Specialty stores such as furniture, sporting goods, bookstores, and others are likely to show significant adoption of ESL in the coming years.

REGIONAL INSIGHTS

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By geography, the market is analyzed across five major regions, namely North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America. The regions are further categorized into countries.

Europe is forecasted to hold the leading position in the electronic shelf label (ESL) market share. Governmental rules and regulations are likely to fuel the market growth across the region. For example, in France, the French Parliament adopted a French Consumer Code that states that the price of the product should be clear and transparent to the customers, incorporating delivery and postal charges. The failure of any business to provide the correct price information will result in high penalties.

Latin America is anticipated to exhibit the highest growth rate during the forecast period. Brazil, Argentina, and Mexico are expected to hold a prominent position in the regional market share. Latin America is an emerging market for e-commerce and hence possesses a major share of physical commerce. International retail chains in the Caribbean, including PriceSmart, Cost-U-Less, Carrefour, Save-A-Lot, and Albert Heijn Zeelandia, among others, are likely to create new opportunities for market players across the region.

In the Middle East and Africa, increasing usage of smartphones, growing internet penetration is likely to support the market growth. Similarly, steady transition towards digitization attributed to the introduction of augmented reality (AR) and image recognition technologies has pushed the retailers in the Middle East to explore and adopt new sales tools.  These factors are expected to support the market growth across the region. For instance, in July 2018, SES-Imagotag signed a contract for electronic shelf label deployments with Sharaf DG LLC, a UAE-based consumer electronics retailer.

North America is estimated to hold a notable share in the global market. The United States retail industry is likely to witness a growing trend towards buy online and pickup in store (BOIPS). The Adobe Analytics Survey 2020 states that in July 2020, shoppers in the United States were more open to going to physical retail stores, thus slowing online purchases. Thus, the ongoing trend of BOIPS is likely to facilitate the market growth.

The Asia Pacific market is expected to exhibit moderate growth during the forecast period.

KEY INDUSTRY PLAYERS

Key Players to Embrace Partnerships and Acquisitions to Provide Innovative Retail Solutions

Major market players such as SES Imagotag and Pricer AB are entering into strategic partnerships and collaborations to strengthen their product portfolio by developing innovative in-store retail solutions. For Instance,

• July 2020 – Canadian Tire Dealer Association (CTDA) entered into a master framework contract with Pricer AB as the association’s exclusive provider for electronic shelf label systems. By deploying ESL systems, CTDA aims to enhance competition by supporting their dealers to effectively manage their stores, improve customer service, and offer the shoppers a synchronized omni-channel experience.  

• February 2020 – Zhejiang Hanshow Technology Co., Ltd and Bison Schweiz AG partnered to co-develop and expand presence in the German and Swiss market by combining Hanshow’s electronic shelf label and Bison's ESL Manager. Hanshow’s ESL solution integrated with Bison's ESL Manager makes a robust software package that manages label and product binding and also controls the transfer of product data into the shelf labels. The solution can be applied in any retail outlet, including supermarkets, hypermarkets, pharmacies, or other stores.

LIST OF KEY COMPANIES PROFILED:

• Pricer AB (Sweden)


• SES-imagotag (France)


• Displaydata Limited (United Kingdom)


• Zhejiang Hanshow Technology Co., Ltd (Jiaxing, China)


• Opticon Sensors Europe B.V. (Hoofddorp, Netherlands)


• Altierre Corporation (San Francisco, United States)


• Teraoka Seiko Co., Ltd (Tokyo, Japan)


• E Ink Holdings Inc. (Hsinchu, Taiwan)


• Cest Co., Ltd. (Daegu, South Korea)


• LG Innotek (South Korea)


• NZ Electronic Shelf Labelling Ltd. (Kapiti, New Zealand)


• Retail Solutions Pro DBA (Florida, United States)


• Solum ESL (Hesse, Germany)


• TroniTAG GmbH (Isselburg, Germany)


• Diebold Nixdorf, Inc. (Ohio, United States)


• M2COMM (Hsinchu, Taiwan)

KEY INDUSTRY DEVELOPMENTS:

• July 2020 – E Ink Holdings and Yiwu Qing Yue Optoelectronic collaborated on an e-paper project. Through this collaboration, E Ink Holdings announced that Optoelectronic has become one of its members of the e-Paper ecosystem and main suppliers of ESL modules in the market.


• September 2019 – Ahold Delhaize partnered with Hanshow Technology with an aim to introduce digital in-store applications for Ahold Delhaize’s European brands. Further, through this collaboration, the company’s plan to set up a joint innovation lab to research and develop innovative in-store technologies.

REPORT COVERAGE

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The electronic shelf label market report highlights leading regions across the world to offer a better understanding of the product to the users. Furthermore, the report provides insights into the latest industry trends and analyzes technologies that are being deployed at a rapid pace at the global level. The report examines various paradigm shifts associated with the transformation of these solutions. It further highlights some of the growth-stimulating factors and restraints, helping the reader to gain in-depth knowledge about the market.

The report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, it offers insights into the market trends and highlights key industry developments.

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