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Paper or plastic? Altierre says try digital
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We’ve seen companies pitching electronic shelf price tags come and go repeatedly over the past decade. But it looks like one finally may have made the leap from concept to reality.
Altierre Corp. has rolled out a pilot program at a Safeway supermarket in Campbell, near its San Jose headquarters, and also is showing its stuff at a private showroom. And on Dec. 2 and 3, Altierre was generating vigorous buzz at the AlwaysOn Venture Summit in Half Moon Bay.
The idea behind automated liquid crystal display (LCD) shelf tags is simple, but actually making the concept work on a large scale has been a challenge. The goal: To eliminate the thousands of hours of employee time and ton upon ton of wasted paper involved in swapping out shelf tags as prices change. Instead, digital tags deployed at every store in a chain could display up-to-the-minute specials with the push of a single centralized button. By linking the cash registers with the digital shelf tags, point-of-sale price conflicts become a thing of the past.
While other companies have proposed rolling out digital sign systems with existing wireless technology, including WiFi, Altierre developed a proprietary wireless system that CEO Sunit Saxena says can handle any number of devices. WiFi, by contrast, can only handle 256 connections within a single network, severely limiting that wireless technology’s ability to handle the tens of thousands of items in stock at an average supermarket.
Estimates vary, but it’s believed that a typical grocery chain with 1,000 stores wastes between 50 million and 70 million sheets of paper every year swapping out shelf prices and messages. With a digital system, not only would labor costs plummet, but stores would be able to promote daily, and even hourly, discounting and marketing schemes. Eventually, similarly outfitted shopping carts will be able to alert shoppers to bargains and perhaps even check their electronic shopping lists to remind them of items they may have forgotten.
Powered by batteries estimated to last five years, the small shelf price displays will cost about $5 each. Converting a single supermarket to digital displays would cost roughly $250,000, Saxena says. By eliminating the labor costs of replacing paper shelf tags weekly, each store would recoup the costs of purchasing the system in less than two years, he says. Altierre, which has raised $60 million in venture capital, has been flying under the radar since its founding in 2003. But Saxena says he expects the company to be profitable in 2009.
