 |
High-tech tools boost pricing reform efforts |
|
The proof is in the magic markers. That’s how New England grocery chain Shaw’s
Supermarkets measures consumer acceptance of a Connecticut law exempting
retailers from item-pricing requirements if they use electronic shelf
labels. The exemption is similar to one introduced in the Michigan Legislature
early this year.
“Nobody ever asks for the magic markers,” he
said. It’s a message the Michigan Retailers Association
and major retailers hope to get across to Michigan legislators this year.
Two bills proposing changes to the state’s item-pricing
law have been introduced, promising the best chance in decades of reducing
the burden placed on retailers by the 1976 law. Both proposals hinge on
the use of new technologies to assure consumers that they’re being
charged the right price, even if the product doesn’t have a price
sticker. House Bill 5544, sponsored by Rep. Mike Bishop (R-Rochester),
would allow retailers to provide portable UPC scanners capable of printing
receipts for customers who want to check prices, rather than individually
marking products. Retailers would have to demonstrate 98-percent scanner
accuracy to adopt the system. The exemption would not apply to food or
nonprescription drugs. Hand-held UPC scanners with printing capability aren’t
currently used by retailers for customer price checks, though many large
stores provide some scanning stations. The requirement for a printed receipt
was included to meet Attorney General Jennifer Granholm’s demand
for an audit trail to verify price accuracy. Sen. Joanne Emmons (R-Big Rapids) is sponsoring a second
proposal (Senate Bill 1211) that would remove the item-pricing requirement
for retailers who use electronic shelf labels. The exemption would apply
to all products. Electronic shelf labels, such as those used by Shaw’s
in Connecticut, are linked by radio frequencies to the checkout scanners,
allowing prices on the shelf and at the checkout to be changed at the
same time from one central location. Since the prices are set by SKU number,
there’s virtually no chance for a discrepancy between the two locations.
Electronic labels have plenty of advantages for retailers
and shoppers. Besides increasing the speed and efficiency of changing
prices, the labels can be used for promotional functions like highlighting
the fact that a product is on sale. Employees can use the labels to check
inventory levels. They even make the store look neater because they’re
less likely to move or fall off the shelf. Though no action has been taken so far on the Michigan
bills, MRA hopes to build support for changing the item-pricing law and
put together a reform package that incorporates the best solutions, perhaps
to move in the fall. MRA Chairman and CEO Larry Meyer said the goal is to preserve
a high level of consumer protection while allowing retailers to operate
more efficiently. Replacing price tags with electronic pricing could save
retailers and their customers millions of dollars per year. “Customers want to know that the price they see on
the shelf is the price they’ll be charged at the checkout,”
Meyer said. “Technology is available to provide the accuracy customers
demand, but retailers in Michigan aren’t able to use it effectively
because of the antiquated requirement that they put a sticker on every
item. “More often than not, item pricing is the cause of
price errors rather than the solution. It’s the price sticker that’s
incorrect, not the price that comes up at the checkout counter.” Changes in the law could pave the way for retailers to
use even more advanced pricing tools like SmartPaper, a high-tech material
used to make display signs that can be changed electronically from a central
location, much like electronic shelf labels.
“It’s ironic that they’ve chosen to locate
in one of the few states where retailers can’t fully utilize this
technology because of the item-pricing law,” said Eric Rule, MRA’s
director of governmental affairs. Organized labor strongly opposes relaxing the item-pricing
requirement, fearing that technology will put workers out of a job. Rogan
said that’s not the case. Instead, customer service and employee
satisfaction improve because workers aren’t spending so much time
changing prices. “The employees are merely assigned to other tasks
in the store that are far more beneficial to them and to the customer,”
he said. “There’s no greater incentive for retailers
to comply [with pricing accuracy] than good business practices,”
he said. “If we’re deceiving or misleading our guests in that
way, our business will suffer.” Rick Damman, president of the Damman Hardware chain in
southeast Michigan, said his stores would continue to individually price
most products even if it wasn’t required. He sees it as a way of
increasing convenience for the customer. Nonetheless, Damman has lobbied against the item-pricing
law for years, asserting that market forces, not legislation, should determine
whether retailers put price stickers on every item. “Consumers are very astute and very bright,”
he said. “They don’t need all this artificial protection. Consumers
won’t shop at stores that don’t provide adequate pricing information.
If people want price tags, retailers will put them on.” This article was written by Michigan Retailer staff writer Rachel Whitaker. |
The
Connecticut law, implemented five years ago, contains a provision that
retailers must make markers available to customers in case they want to
write the shelf price on the product. But Shaw’s spokesperson Bernard
Rogan said customers haven’t seen a need to track the accuracy of
the electronic prices.
“It
works beautifully,” said Rogan. “The accuracy is as close to
100 percent as humanly possible.”
Gyricon
Media, maker of SmartPaper, recently relocated its headquarters to Scio
Township, near Ann Arbor, and built a manufacturing plant there.