Edit ModuleShow Tags

Tech startup: ShelfX


INITIAL LIGHT BULB Ran Margalit, founder and CEO of ShelfX, saw the advent of the self-checkout line in the supermarket as a step backwards. "They made you the cashier," he says. "You do all of the work. That’s not service. And there’s still a bottleneck."

Customers agree: The Food Marketing Institute found that self-checkouts dropped from 22 percent of grocery transactions in 2008 to just 16 percent in 2010.

Margalit’s solution, ShelfX, turns retail shelves into intelligent electronic scales tied into payment processing and the back-end inventory system. Shoppers pick up their purchases and walk out the door.

IN A NUTSHELL Customers carry a ShelfX RFID card that’s linked to their payment option, shop for items, and buy them without ever waiting in line. A mere wave of the card means you want to buy an item after picking it up off of the shelf. The shelves detect what is taken by the weight. If a customer decides she doesn’t want something, she merely has to return it to the right shelf.

"It tells you who took what," Margalit explains. "It reduces the need for a cashier." He points out that this not only makes for efficiency gains among both customers and employees, but it also frees up prime retail space that’s often occupied by self-checkout or traditional lanes.

ShelfX functions with produce and other products sold by weight. The system also doubles as a real-time inventory management solution. "ShelfX tells you what’s on the shelves at any given moment," Margalit says.

There’s a one-time installation fee; pricing starts around $10 per stock-keeping unit (SKU). "The smaller you are, the cheaper the system," Margalit says. "We’re playing with some different pricing models."

ShelfX launched its first retail systems at Udi’s stores in Denver earlier this year and also closed a deal with Englewood’s Premier Services in the spring to open ShelfX-based "MicroMarkets" at about 100 businesses by the end of the year. Margalit sees it as a new and improved version of the vending machine areas that are currently the breakroom status quo.

THE MARKET Margalit sees ShelfX as an option for retail stores of all sizes, from mom-and-pops to Wal-Mart. ("They called," he says of the latter.) He also sees the possibility of ShelfX-based "Vending Fridges" replacing vending machines at numerous non-retail locations.

The company is also in talks with an undisclosed national hospital group to help manage its blood banks. "Blood banks are far away from the O.R.," Margalit says. "The blood goes stale, so they put fridges around the hospital." With ShelfX, the hospital staff knows when to re-stock blood before they run out, thanks to nurses with RFID cards. "Now you have live inventory of blood in the hospital," Margalit says.

FINANCING Margalit raised $400,000 from friends and family to launch the company, but is now looking at reeling in some venture capital. "We’re talking to investors," he says. "We’re looking for about $2 million now."

where Boulder | FOUNDED 2011 | web www.shelfx.com

Edit Module
Eric Peterson

Denver-based writer Eric Peterson is the author of Frommer's Colorado, Frommer's Montana & Wyoming, Frommer's Yellowstone & Grand Teton National Parks and the Ramble series of guidebooks, featuring first-person travelogues covering everything from atomic landmarks in New Mexico to celebrity gone wrong in Hollywood. Peterson has also recently written about backpacking in Yosemite, cross-country skiing in Yellowstone and downhill skiing in Colorado for such publications as Denver's Westword and The New York Daily News. He can be reached at Eptcb126@msn.com

Get more content like this: Subscribe to the magazine | Sign up for our Free e-newsletter

Edit ModuleShow Tags

Archive »Related Articles

Key to growth: A relationship with your lender

It isn’t a secret – Colorado’s economy is vibrant and strong. New developments continue to spring up across the state, many entrepreneurs have started new businesses, and many more companies are growing and need resources to meet their increased demand. What’s the secret to ensure business owners...

Do we need a new word for entrepreneur?

Has the word entrepreneur become too trendy as to have lost its meaning? I’m hearing it and the word entrepreneurship being used in so many conversations incorrectly. I’m critical of the use of the word "entrepreneur"...are you?

Hot tips for emerging company boards

Emerging companies comprise a significant portion of Colorado businesses. Venture capitalists, angel investors and founders make up the shareholders and the boards of directors of many of these companies. I spoke recently to Fran Wheeler, a partner in the Business Department of the Colorado Office...
Edit ModuleShow Tags
Edit ModuleEdit ModuleShow Tags
Edit ModuleShow Tags Edit ModuleShow Tags
Edit ModuleShow Tags Edit ModuleShow Tags
Edit ModuleShow Tags Edit ModuleShow Tags