By Craig Webb, President, Webb Analytics
Employee time is money. So is the label paper used for printing price tags. When Peter Brown combined those factors with the tsunami of price changes coming into Hingham Lumber every day, he began to search for a better way.
The result is that this Cohasset, MA, institution is turning to digital shelf labels (DSLs) to identify the 32,500 different products in the store and warehouse. Often disdained by LBM dealers for being prohibitively expensive, Brown estimates the DSLs will pay for themselves in 18 to 24 months, and have been freeing up staff time virtually from the start.
Brown, Hingham's store manager, bases that estimate on several cost factors:
Creating new price tags on label sheets for around 500 to 800 products per week.
Employee time spent going through the store, finding those products on store shelves, and then replacing the existing price tags.
Dealing with employee malaise involving what is one of the most boring jobs in a store.
In contrast, once the DSLs are in place, Brown estimates it takes roughly five minutes to download the price changes into the company's ERP system, relay that information to the system that manages the DSLs, and then wait 10 minutes at most to see the labels update automatically throughout the store.
Brown also likes how he can put more information onto a DSL. For instance, in the photo above, the "QOH" and "QOO" refer to quantities on hand and quantities on order. Knowing that at the point of sale helps with customer interactions and inventory counting. The "S33N" identifies the product's location in the store. Other information provide the numerical equivalent of the bar code and the product code used by the vendor or distributor.
Hingham employs 20 people in its paint and hardware departments, and Brown estimates it took one full-time equivalent person just to change price tags. Installing DSLs has "freed up staffing to attend more to customer service," he said.
What about installation time and effort? In Hingham's case, Brown is doing the installation work slowly and mainly by himself, section by section, because the store is going to be redesigned in the coming year. Thus, only about 10% of the current price tags have been swapped for DSLs, he said. But that's enough to learn some things.
First, Brown estimates it will take the average person about 30 seconds to program a DSL for the product and location where it will be installed. He believes that's about the same amount of time it takes to change a paper label when you add the seconds needed to find the product in the store. With practice, Brown believes you can change each DSL faster than half a minute.
Most of Hingham's DSLs have a 2.2-inch diagonal screen, but some are 7 inches (to present more marketing information) while others are strips that can run the width of the planogram. Those can be programmed to deliver colorful messages along with showing prices.
Hingham bought its DSLs from VusionGroup, a French company. (In general, DSLs are far more popular at home centers outside the U.S. than inside.) Whoever you buy from, it's a good idea to mention if you're part of a buying group, as the vendor might be offering the DSLs to buying group members at a discounted price. The lower the price, the faster the ROI.
Brown believes you don't need an IT expert on staff to run the software that drives DSLs, but in his case he wanted to create custom software to help VusionGroup talk with Hingham's BisTrack ERP system. On such occasions it helps to have someone who can work in a SQL system. But, in general, "if you know how to use an app on your phone, you can do this," Brown said
Skeptics about DSLs have brought up concerns over battery life. VusionGroup's DSLs promise 10 years of service, and Brown said that to date he has had just one DSL fail out of the 3,000 he has purchased.
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