Price-fixing: Using technology to raise retail margins

| October 19, 2010
Michael Waymark

Michael WaymarkAt nearly eight o’clock on a Friday night a liquor-store owner scans his shelves and makes a competitive decision – time to bump the prices up 10 per cent.

It’s a move many retailers execute at peak times, requiring manpower to print the updated labels and manually change them throughout the store.

Imagine if with the press of a button, you could change all the prices across your store at once.

ILID manufacture electronic shelf labels that allow retailers to do precisely that.

“Rather than going around and changing the paper ticket on every single line item, we can do it with a flick of a switch. We send a signal out to these labels which read the new information and automatically update.”

“They can price daily or price hourly, to manage the market. It enables you to be competitive, so you can adjust your prices in real-time.” Michael Waymark, Director of ILID said.

ILID labels on the shelves at Dan Murphys'Clients include independent grocers, liquor, hardware and truck spare-parts stores. Pharmacies and distribution centres are other key markets for the product.

Labels cost around $5 each and the typical independent supermarket fit-out would come in at around $100,000.

Mr Waymark says the payback period ranges from 6 months to 2 years and liquor stores tend to deliver the quickest ROI.

“The payback generally comes from saving on labour to do prices changes, and being able to adjust your prices and compete according to market conditions, at night-time or on weekends.” He said.

The Australian company has installed 1 million electronic labels in about 100 stores around the world. 

But cracking Woolworths and Coles is crucial to securing its long-term success.

Woolies-owned liquor outlet Dan Murphy’s is currently running a trial of Ilid labels in its Kew store.

It’s hoped the thumbs up here will provide an entry into this lucrative market.

“They like the idea. They are evaluating the return on investment as we speak. If it stacks up, they’ll roll it out.” Mr Waymark said.

Should Ilid fail to lock in the big supermarkets, it will focus more heavily on selling offshore.

“We have exported these to the UK, the Middle East and Eastern Europe. The acceptance of electronic shelf labelling is now starting to gain momentum.” Mr Waymark said.

The company faces competition overseas, but stands alone in the domestic market with its locally developed and created product.

Mr Waymark said Australian companies need more assistance in promoting products for export.

 “The label itself is all Australian design – the plastics, the hardware and the software is all invented in Melbourne. We really need support from the government to get the product out there. The ‘Australian Made’ concept has just lost a bit of momentum, it needs a bit more focus. There’s limited funding for marketing at a global level, and that’s probably where we need more help.” He said.


Director Michael Waymark on the benefits of Ilid’s electronic labels:

  •  Adjust prices in real-time, in line with market conditions
  •  Lower labour costs
  •  Made in Australia
  •  Installed without any operational interference

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