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Businesses Steadily Rolling Out Co.'s Digital Labels

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This micro e-paper and software provider says nearly three-dozen retailers, brands, and businesses are now using its Digital Smart Labels technology.

More than 35 retailers, brands, and businesses are now using micro e-paper and software provider Danavation Technologies Corp.'s (DVN:CSE; DVNCF:OTCQB) Digital Smart Labels™, the company said in a corporate update.

Onboarded retailers span in size from local family-owned businesses to large, multi-national corporations. Updates show stores in Canada and Mexico are making progress in rolling out the platform.

"Danavation has continued to make progress and secure new installation contracts as the hard work our team has put in over the last few years has really helped build momentum and propel the Company forward," Chief Executive Officer John Ricci said. "We are well positioned with a low-risk, service-first value proposition driven by management's 25-plus year relationships with large retail and grocery brands across Canada and the U.S."

Digital Smart Labels™ enable companies to automate labeling and price and product promotions in real-time, significantly reducing paper usage in the process.

Technical Analyst Clive Maund noted that the "low-priced tech-type" stock would not appeal to everyone, "but those of you who are interested should look to buy immediately."

The main attraction of the labels is that the technology automatically updates the prices of merchandise on the shelves, Technical Analyst Clive Maund wrote.

"Although already in widespread use in Europe, this is not the case in the U.S., and with inflation having taken hold and trending in the direction of hyperinflation, the need to implement this technology in stores nationwide across the U.S. is becoming urgent," Maund wrote. "With the company's automatic price updating system already tried and tested, it is highly likely that it will receive orders for its system from at least one big retailer soon. This is truly a company that will benefit from the effects of hyperinflation."

Maund noted that the "low-priced tech-type" stock would not appeal to everyone, "but those of you who are interested should look to buy immediately."

Clients Continue to Roll Out Technology

The company said its solutions continue to be installed at stores across the continent.

Toronto-area food retailer Rabba Fine Foods has had an initial partial installation of the platform at one of its 35 locations.

"Given the success and return on investment realized from only a partial installation of our automated and sustainable price label solution, Rabba has confirmed their intention to outfit the full store with our" technology, Danavation said.

Automation can "reshape retail business models and provide value chain opportunities for players operating in the market," Allied Market Research wrote.

Based on that full store experience, the company will determine its rollout plan for the remaining locations.

Rollout also continues at all Impulsora locations in Mexico. The full installation of the technology is expected to be completed by the first half of 2024 for Mexico's largest distributor of electrical and lighting equipment.

Impulsora has a large and fast-moving inventory with more than 100,000 square meters of warehouse space throughout the country, Danavation said.

Installation at the first of up to seven Nature's Emporium locations in Ontario is expected to be completed in early September.

"We see potential for a full rollout to the six additional locations in the future," the company said in a release.

The Catalyst: Sector Expanding at a Rapid Rate

The global retail automation market — which also includes electronic shelf labels — was valued at nearly US$15 billion in 2021 and is predicted to reach US$34.5 billion by 2030 with a compound annual growth rate (CAGR) of 9.8%, according to a report by Straits Research.

"Retail automation is gaining high traction and expanding at a rapid rate," the report said. "The need to provide exquisite shopping experiences that can help retailers increase customer retention is fueling the need to adapt to ongoing digitalization strategies such as automation."

Automation can "reshape retail business models and provide value chain opportunities for players operating in the market," Allied Market Research wrote

Internet-of-Things (IoT) devices like smart labels are poised for growth. According to a report from Mordor Intelligence, the IoT market is expected to register a CAGR of 10.53% during the forecast period (2022-2027). 

"Enterprises and service providers have been looking at IoT as the key enabler to augment digital transformation and unlock operational efficiencies," the report said. 

Making Life Easier, Not Harder

Digital Smart Labels™ are powered by proprietary automation technology and an underlying Platform-as-a-Service (PaaS) model. The company said using the technology enhances data accuracy and improves performance by optimizing inventory and removing the high labor costs and low productivity traditionally associated with labor-intensive merchandising workflows.

"We believe that technology should make life easier, not more complicated," Ricci said.

The company has introduced its solution to retailers across North America, including True Value and Ace Hardware. It also said it’s targeting new markets, including healthcare providers, manufacturing, and logistics companies.

Streetwise Ownership Overview*

Danavation Technologies Corp. (DVN:CSE; DVNCF:OTCQB)

*Share Structure as of 5/22/2023

The labels offer high-resolution, high contrast, wide viewability, and vibrant color displays for price labels. The displays, which allow for both text and graphics, are housed in durable and strong polycarbonate housing.

Ownership and Share Structure

Management owns roughly 36% of the share base. The company reports no institutional owners.

Strategic investor T. Sean Harvey holds 11% or 13.31 million shares. Independent Director Vivek Jain owns 0.13% or 150,000 shares, and Independent Director Michael Della Fortuna owns 0.02% or 30,000 shares, according to Reuters.

Danavation has a market cap of about CA$7.25 million with about 120.8 million shares outstanding. It trades in a 52-week range of CA$0.325 and CA$0.055.

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Important Disclosures:

  1. Danavation Technologies Corp. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
  2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Danavation Technologies Corp.
  3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
  4. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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