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Product Label Importance: What New Retailers Need to Know

Product labels are crucial, but how important are they? Here’s what retailers need to know about product labels and their importance in the shopping journey.

When it comes to the retail and consumer industries, product label importance is crucial. Product labels are a tool of marketing and information—empowering not only the brands but the end consumers as well. They help companies deliver the right branding and information, while they also help consumers make informed decisions. This is why retailers, such as department stores or grocery stores, also pay attention to these product labels. So what is the product label's importance? How can retail stores help enhance the integrity of the product labels of the products and merchandise they’re offering?

What is a product label?

A product label is a piece of information attached to a product that provides important details about the product itself, any ingredients or materials, usage instructions, warnings, and other relevant information. Product labels can typically come as a sticker or paper attached to the actual product, on the shelf, or on the packaging and boxes of various consumer goods. This includes different kinds of food items, pharmaceuticals, cosmetics, cleaning products, and a lot more.


The specific information found on a product label can vary depending on the type of product and any applicable regulations, but common elements include:


  • Product Identification: This usually includes the product name and brand name. These product labels help identify the product, its brand, and even its manufacturer or company.
  • Ingredients or materials: The product label also lists components or substances used to make the product, often in descending order of predominance by weight.
  • Nutritional facts or information: For any food items or food-related products, the product label also lists nutritional information and details. This includes nutritional content such as serving size, calorie count, fat content, other nutrients, and more. This is especially important for food and beverage products.
  • Usage instructions: Product labels often guide how to use or consume the product safely and effectively. This could include dosage instructions for medications, cooking instructions for food products, or application guidelines for cosmetics.
  • Warnings and precautions: Product labels also include warnings about potential hazards associated with the product's use. This could include allergen information, safety precautions, or age restrictions.
  • Expiration date or best-before date: The label, of course, indicates the recommended timeframe for using the product before it may no longer be safe or effective.
  • Barcode: This unique identifier is also usually included in many product labels. It is used for inventory and sales tracking purposes.
  • Branding and Marketing: Labels also serve as a platform for branding and marketing efforts. Brands, companies, and retailers can use these labels to communicate their brand identity, values, and unique selling points.


These are just some of the common elements and information found on product labels. 

Why are product labels important?

Product label importance extends to various factors and elements. These product labels aren’t just ornamental. They are a lot more paramount to the shopping experience than one might think.


Here are a few main reasons why a product label is important:


Consumer information

Product labels provide consumers with detailed information about the product. This includes ingredients, components, and intended uses. This helps consumers understand what they are purchasing and how to use it effectively or consume it safely. For example, a label on a skincare product might list the active ingredients and their benefits, as well as directions for application and any precautions to be aware of. Ready-to-eat food items might have instructions on how to reheat or prepare them safely, and a lot more.



Product labels include warnings and precautions to ensure consumer safety. This information may alert consumers to potential hazards associated with the product's use and guide how to mitigate those risks.


For instance, labels on household cleaning products often include warnings about avoiding contact with the skin or eyes and instructions for proper ventilation during use. The same thing goes for products like appliances, electronic devices, as well as food and beverage items.


Law or regulatory compliance

Many products are subject to regulations that mandate specific information to be included on their product labels. This information ensures that products meet safety standards and legal requirements set by government agencies. Examples of regulatory requirements include listing ingredients in cosmetics and providing dosage instructions for medications, and other pharmaceutical products.


In 2004, the Food Allergen Labeling and Protection Act was passed in the United States. This law pertains to proper labeling and the requirement of information regarding allergenic substances. With this law, labels help consumers identify potential allergens in products, such as peanuts, dairy, or gluten. This information is crucial for individuals with food allergies or sensitivities, allowing them to make safe choices. Food labels, for example, must comply with regulations that require the clear identification of common allergens to prevent accidental exposure.


Nutritional awareness

Labels on food and beverage products provide detailed nutritional information, including calorie content, macronutrient breakdown, and vitamin or mineral content. This information helps consumers make informed decisions, especially about their dietary choices. Nutritional labeling can also highlight healthier options or specific nutritional benefits of the product, such as being low in sodium or high in fiber.


Financial or legal liabilities

Proper product labeling also means brands and retail stores can avoid any financial or legal liabilities, dangers, or loss of revenue. In 2023, a few cereals, chips, and other food items were recalled because the weights printed on the labels were wrong. Brands and companies had to investigate and resolve the issue. Some retailers also tried to offer financial compensation to consumers who were misled by the wrong labels. Incidents like these can lead to certain financial or legal liabilities and reduced customer loyalty, which will lead to revenue loss.


Branding and marketing

Labels are a critical component of a product's branding and marketing strategy. They serve as a visual representation of the brand's identity, values, and positioning in the market.


Creative and eye-catching label designs can attract consumer attention, communicate the product's unique features or benefits, and influence purchasing decisions. Labels may also include certain marketing messages for the public. This includes product claims, endorsements, or certifications to persuade consumers and build trust in the brand.

Can ESL be used for product label importance?

Retailers using electronic shelf labels (ESL) or digital labels can help with enhancing product labels. A digital label is a small electronic device that replaces a traditional paper or sticker label. SOLUM Group’s Newton labels, in particular, have robust features that are more than enough to contribute to the product label's importance. 


Here’s how:

  • 7-page information capacity - Newton labels have an information capacity of up to 7 pages. This means that retail stores will be able to add any product information aside from the price. This includes allergen warnings, instructions, expiration dates, weight, nutritional information, and a lot more.
  • 7-color LED indicator - Newton labels also have a 7-color LED indicator that can be programmed into various categories or operations. For example, one color could indicate specific allergen warnings, one color could mean organic or vegan options, and so on.
  • Wide size ranges from 1.6” up to 11.6” - Bigger digital labels, of course, can make it easier for shoppers to read any crucial product details. This will help them make better purchasing decisions.
  • QR code capability - QR capabilities in digital labels will also allow for more information for consumers. They can use their phones and scan QR codes on the digital labels to be redirected to websites, instructional demonstrations, product catalogs, and more.

With these kinds of features, a digital label can be an extension of the actual product label on the product. Shoppers will learn more about the products and ensure they’re getting the correct products they want. Product label importance can now be at the forefront of the shopping experience, no matter what kind of retail store it is.

Other features of the Newton ESL include 10x faster update speed, multifunctional, programmable buttons, full graphic e-ink display technology, 10-year battery life, IP67 rating, freezer label variation, near-field communication (NFC) capability, and a label management system.

If you need more help with the product labels on your retail store, Newton labels are here for you. Talk to SOLUM experts now and find out how Newton digital labels can enhance your operational efficiency as a whole.

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