Price tags simplify the process of shopping by instantly conveying the cost of merchandise to prospective buyers who are then better able to make a purchase decision.
Price tags can take many forms but all represent a fixed, rather than negotiable price, for merchandise and simplify retail operations by allowing centralized decision-making. Price tags are an essential element of the retail experience.
The humble price tag, taken for granted by shoppers in modern retail outlets, was a major development in the evolution of retail. Thought by many to have come into vogue around the mid-19th century, the price tag is another innovation credited to the early operators of department stores. The actual origin is difficult to isolate, but extensive use of price tags was known to exist at the Le Bon Marché department store founded by Aristide Boucicaut in 1852.
The concept of openly displaying merchandise and clearly communicating the cost of goods via tags was a novel idea at the time. It quickly gained acceptance with other retailers who recognized that shoppers found the practice desirable and also understood the important business implications.
Price tags take many forms today and thanks to the advent of the barcode and shelf edge pricing, most fast moving consumer goods no longer bear individual prices. Barcodes eliminated the need for price tags on some products, but their usage remains widespread on products such as apparel, footwear, accessories and hard line categories of goods. These products will typically have some form of a price tag as well as a barcode, even though in some instances a secondary pricing sign on a display will be used to override the price printed on the tag.
Price tags have gone digital as well with electronic shelf labels, or ESLs, employed by some retailers. ESLs offer a new approach to ensure accuracy and optimize margins by employing dynamic pricing strategies based on shifting demand and competitive circumstances.
Contribution to Retail History
The price tag represented a major advancement in price transparency. Shoppers were able to instantly understand the cost of an item and make a purchase decision without the aid of a retail employee. Knowledge of a product’s price encouraged sales and offered a myriad of business benefits to retailers, the most significant of which was the ability to manage profitability by understanding the margin contribution of different products and categories. Price tags were a key enabler of self-service shopping and led to the introduction of mark downs, both as a means to clear slow-moving goods and as a mechanism to showcase savings from the anchoring price.