Walmart puts digital shelf labels to work beyond price changes

The news: Walmart rolled out a new feature that uses its digital shelf labels to make it easier for consumers to find the item they’re looking for. Shop to Light enables consumers to use the Walmart app to trigger a flashing LED on the shelf label of the product they’re looking for.

The retailer is using the same technology for two other features—Stock to Light and Pick to Light—that help store associates stock shelves and fill online pickup or delivery orders.

All three features will be rolled out to stores companywide by the holiday season.

The context: The announcement represents a shift in the conversation around Walmart’s digital shelf labels. Less than a week ago, the retailer was on the defensive about its digital shelf labels, with CEO John Furner stressing that Walmart wouldn’t use it for dynamic pricing: “Whether you’re buying groceries or electronics on a hot afternoon or in a sudden rush for an item, it’s never a reason to charge you more,” he said in a statement.

Now Walmart is emphasizing how the technology can help shoppers and employees. With roughly 120,000 items in its stores, Shop to Light can save consumers time while helping associates stock shelves and manage online orders more efficiently, Greg Cathey, Walmart’s senior vice president of digital transformation, told CNBC. Customers have already triggered 5 million flashes since the feature began rolling out to pilot locations this summer, and the retailer believes the technology can offer shoppers a tangible convenience benefit heading into the holidays.

Implications for retail: Digital shelf labels are one piece of Walmart’s effort to use technology to make its operations more efficient and shopping more convenient.

Its supply chain investments are helping Walmart move inventory more efficiently, keep shelves stocked, and get orders to customers faster, with digital shelf labels helping associates fulfill online orders more quickly. That creates a reinforcing cycle: Better product availability and faster fulfillment make Walmart easier to shop, which can drive more frequent purchases.

At the same time, Walmart’s Sparky shopping assistant shows how making online shopping easier can translate into higher spending: Customers who use the tool spend 40% more per order than those who don’t, the retailer said during its August earnings call.

These investments bolster Walmart’s omnichannel business as it gains ecommerce share. We expect its share of US ecommerce sales to rise from 8.8% last year to 10.1% this year, suggesting its efforts to save shoppers time and effort are paying off. Whether Walmart is helping someone find an item in an aisle, discover a product online, or get a delivery faster, the retailer is betting that a better, more convenient experience will drive higher spending.

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