In Europe, Euro May Drive Demand for ESLs

Electronic shelf labels (ESLs) have already caught on more quickly in Europe than they have in the United States. Lately, however, the European Monetary Union (EMU) and the advent of the euro currency in many European countries seem to have created an opportunity in Europe for even more widespread ESL deployment.

After all, retailers need to display prices in both the euro and in the old national currencies in order to help the transition to euros, which will be completed in 2002. ESLs, which use LCD screens to electronically display prices, are clearly useful for displaying and changing prices in dual currencies. ESL vendors are therefore confident that a surge in demand will occur after the Year 2000 (Y2K) trauma has faded.

"Once the Y2K problem is over, retailers will turn their attention to the problem of dual currencies," says Jann Neff, U.K. director of ESL vendor EKS1. His sentiments are echoed by Tomas Lundgren, marketing director of the Swedish ESL vendor Pricer.

"Many of our retail customer prospects see ESLs as the key to dealing with dual pricing," adds Hans Frei, European director for NCR's ESL product, DecisioNet. "They believe they'll gain a distinct marketing advantage by making the changeover to dual pricing easy for consumers."

Chris Hughes, managing director of the Retail Automation Consultancy in the United Kingdom, and a long-term follower of ESLs, says the euro has already played a significant role in boosting ESL deployment in France, which was among the first countries to adopt the new currency. He expects the same will happen in other European countries whether they ultimately join the EMU or not, since the euro will be in widespread circulation and consumers who work for companies headquartered in EMU countries will be paid in euros.

Monique Hoogvliet, managing director of the Netherlands-based Hoogvliet supermarket chain, confirms that EMU was high on the list of reasons behind her company's recent decision to deploy ESLs. "It was definitely a major motivation," she says.

But not all European retailers that have deployed ESLs agree that the EMU was a motivating factor. Erik Muller, a spokesman for Albert Heijn, Hoogvliet's major rival in the Netherlands, staunchly denies that the chain's decision to implement ESLs in its new World of Worlds supermarket format was precipitated by the EMU. The chain is owned by the Dutch company Ahold, which is known as a technology innovator.

Danish electronics retailer Bang and Olufsen is using ESLs from EKSI in its new Copenhagen store largely because it feels a paperless environment matches the desired futuristic look, but not because of the EMU, says a spokesman. Virum supermarkets, also in Denmark, has implemented ESLs from Swedish vendor Pricer, but the motivation was "definitely not EMU," says company spokesman Christian Esbjorn. "It was to save a lot of staff time and improve customer service."

Similarly, Patrice Pasini, owner of the Leclerc supermarket franchise at Saint-Isodore, in Southern France, attributes his decision to implement ESLs from EKSI to non-EMU motivations. "The issue is about service. We want the Leclerc customer to be a satisfied customer," he says.

Nonetheless, as European ESL implementations continue to grow, ESL vendors continue to perceive the EMU as a strong motivator—despite some retailers' denials—and as a key to future sales.—John Dawson, special European correspondent to RT Magazine RT