Walmart is shifting to digital prices across the chain's 2,300 stores. Here's why.
Walmart shoppers will soon be checking prices on electronic shelf labels, with the nation's largest retailer saying it will shift to digital price technology from its current paper stickers throughout its 2,300 U.S. stores by 2026.
Walmart stores have more than 120,000 products on their shelves, each with an individual paper price tag. Each week, Walmart workers add price tags on new items, rollbacks and markdowns, a time-consuming and repetitive process.
The digital shelf label technology will allow Walmart employees to update prices with a mobile app, rather than walking around the store and swapping out paper tags by hand. What used to take a Walmart employee two days will now take a few minutes to complete, the company said.
The transition "represents a significant shift in how I, and other store associates, manage pricing, inventory, order fulfillment and customer interactions, ensuring our customers enjoy an even better shopping experience," Daniela Boscan, a Walmart employee who took part in testing the technology at a Walmart in Grapevine, Texas, said in a news release.
No plans for surge pricing
Walmart told CBS MoneyWatch that it would not use the technology for dynamic or surge pricing, when retailers or other businesses quickly change the cost of products or services based on fluctuations in demand due to weather, traffic or other issues.
"It is absolutely not going to be 'one hour it is this price and the next hour it is not,'" Greg Cathey, senior vice president of transformation and innovation at Walmart, said in a statement.
Wendy's in February came under fire in announcing plans to use dynamic pricing, but sought to reassure patrons it would be used to offer discounts and not to hike prices when demand is high.
"I do not think we will see Walmart introduce dynamic pricing anytime soon," Neil Saunders, managing director of GlobalData's retail division, told CBS MoneyWatch. "A lot of shoppers use Walmart because it has low prices, and Walmart has worked very hard to establish trust with the customer," said the analyst, noting that might be jeopardized if people saw the retailer's prices fluctuate sharply.
The main reason Walmart is switching to digital price tag is to cut costs, Saunders said, noting the substantial labor hours associated with manually changing prices on so many products across thousands of stores.
Walmart concurred with Saunders' assessment, saying "this efficiency allows associates to spend more time attending to customers and ensuring their needs are met, thereby elevating the level of customer service at the stores."