May 9, 2001A 30-year-old company in west suburban Lisle aims to start an efficiency revolution among retailers with a seemingly simple innovation: a shelf tag with a color photo of the product alongside its price.
The shelf tags (placed on grocery shelves just below the products) display an unmistakable image of the product in color, a development that aims to help retailers reduce the numbers of products that go out of stock before store managers notice. Out-of-stock items alone cost retailers an estimated 3 percent of gross sales each year.
Shelf tag and stocking errors are difficult to track because a typical supermarket can change 1,000 tags in a week.
The Image Shelf Tags™ promise to ensure that stores work efficiently with faster, more accurate re-tagging and stocking, which is critical to retailers' razor-thin profit margins. Reduced price mix-ups between items that sit side-by-side are another benefit.
Just check out the crackers at a local convenience store. You'll see Original Wheat Thins, Original Premium Nabisco crackers, Ritz bits, Ritz crackers, peanut butter on toasty crackers, cheese and peanut butter crackers, cheddar cheese on cheese crackers and several more varieties. This explosion in product choice helps to boost sales in the slow-growth food industry but can create confusion at the shelf, which leads to misplaced products, out-of-stocks, customer dissatisfaction and lost sales.
The shelf tags are based on the same pricing database that the store checkout scanners use, although they do not interact with the scanners.
More importantly, Image Shelf Tags™ make stores easier to shop.
"It gives stores a competitive edge," said Ted Gladson, 63, company founder and CEO. "For a 100-store chain, we expect the cost savings and additional sales to be in the millions of dollars."
Gladson, a pharmacist by training, decided not to follow in his father's footsteps when he founded Gladson Interactive in Chicago as a merchandising firm that reset shelves to make product displays more efficient. The company moved to Lisle in 1978, where it has built the nation's largest database of product images used for retail merchandising and e-commerce.
The shelf tags and Signs are being used in pilot projects at BP convenience stores in southwest suburban Plainfield and in Cicero and Naperville. They also will appear this summer in Valu-Rite stores in other parts of the country and in chain stores not yet announced.
Besides retailers' ever-present concerns about costs, they are finding that the new shelf tag system addresses two burgeoning trends in the consumer products industry: an increasingly multiethnic work force and customer base that speaks English as a second language, and the complicated numbers of choices in everything from crackers to shampoo.
Herb Sorenesen, president of consulting firm Sorensen Associates, which studied the Image Shelf Tags™' impact on shoppers, said using photos of products on store shelves is a definite step in the right direction.
The Sorensen study showed that the Image Shelf Tags™ cut out-of-stock items by 65 percent. Other in-store studies with major retailers have shown that the tags cut the time workers spend hanging tags by 40 percent and reduce restocking time by 25 percent while increasing accuracy.
"When you see a product, you identify with it very easily," Gladson said.
Retailers can buy from Gladson Interactive a complete computer, image database, software and color printer system to produce the Image Shelf Tags™ and Signs in their stores. Gladson also offers a service that supplies the tags and Signs.
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