Goodbye, grocery store price tags

How a case of midnight munchies sparked a price-tag revolution.

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Altierre founder Sunit Saxena
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Altierre's price tags can be updated on the fly.

(Fortune Small Business) -- In 2001, Sunit Saxena made a midnight run to the grocery store for wonton wrappers. When he couldn't find any, he went looking for a clerk. The aisles were empty. He discovered the workers holed up in a back room tearing price tags off merchandise to reprice it for the next day.

"I asked how many they had to do. They said, 'Don't ask,'" he recalls. "I said, 'This is nuts. Technology can automate this stuff.'"

The Idea: In 2002, Saxena quit his job as COO of a microprocessor firm and launched a new endeavor: Altierre. The San Jose-based company makes computerized shelf labels that let grocers change prices over a wireless network, saving time and paper.

Of the three largest U.S. grocery chains -- Kroger (KR, Fortune 500), Safeway (SWY, Fortune 500) and Wal-Mart (WMT, Fortune 500) -- two are now testing the labels, says Saxena, 50.

The Risk: The biggest challenge, says Denver retail consultant Jon Schallert, could be having the nation's largest grocers as customers. Small businesses that put all of their resources into one basket often become overleveraged or find that their clients want to renegotiate once the equipment is installed.

The Reward: Digitizing labels saves money without changing consumer behavior. For that reason, Schallert says, "it seems like the perfect product."

Altierre has won $60 million in venture capital and projects $1 million in revenues for 2009.  To top of page

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