VDC Research: RFID, Barcode, Retail Automation & Self-Service Market Blog

Personal Shopping Systems-There's an app for that, too...

Stop & Shop is scaling its Scan-It Mobile initiative, an Android/iPhone-based version of its original handheld Personal Shopping System (PSS). At the end of October, the supermarket extended the app to 42 more stores throughout Massachusetts, Rhode Island and Connecticut. Leveraging a smartphone’s embedded camera as a scanner, the Scan-It app allows customers to scan & bag their groceries as they shop, thereby expediting the checkout process. As a regular Stop & Shop customer and iPhone user (not to mention analyst covering PSS), I was interested to test the Scan-It app first hand. I got that opportunity this past weekend while doing my weekly grocery shopping.

Overall, the performance of the Scan-It app on my “old” iPhone 3GS is impressive. In most cases, the camera scanned with approximately 90-95% of the efficiency as compared to the dedicated Scan-It solution, which I have been using on a weekly basis since it was introduced several years ago.

The app is not flawless, however. On several occasions I noticed the camera struggling to focus, delaying the scan. That said, I also experienced scans that occurred with the same speed as the purpose-built Scan-It solution. The only other shortcomings I noticed were the ergonomics of using the iPhone as a scanner and the hassle (relative to the dedicated Scan-It solution) of repeatedly scanning multiple purchases of the same item. I suspect this latter issue could be addressed through the addition of some kind of quantity-input feature in an updated version.

Considering the solid performance of the Scan-It Mobile solution, PSS apps such as Scan-It could represent a threat to the business of dedicated, purpose-built PSS hardware suppliers. By offering PSS via a smartphone app, retailers essentially eliminate the hardware investment required to deploy PSS, thereby enabling PSS to be deployed across a store chain with relatively little added expense. While ensuring data security—both for the customer and the enterprise—remains a critical issue, we expect more retailers seeking PSS will evaluate smartphone apps in addition to dedicated solutions.

Intermec’s First Foray into the Value-Priced Scanning Category

Intermec, a global market leader for AIDC solutions including barcode printers and scanners, recently released a general purpose handheld linear imager, SG10T, targeting the small- and medium-sized business segment across multiple vertical markets and installation environments. The solution has been designed for non-industrial use, which marks a shift from the company’s traditional stronghold. While classifying it as a low cost, easy-to-use barcode imager, Intermec is also offering a 3-year warranty with the product that has a list price of $140 (€108).

At VDC, we expect to see the global market for handheld linear imagers (both industrial and non-ruggedized) to grow at a robust 7.9% CAGR from 2010-2015. This growth is, however, expected to plateau as 2D imagers become largely disruptive to laser scanners and linear imagers over time, as enterprises increasingly develop and execute their migration paths to the same. By featuring an “out-of-the-box ready” experience at an attractive price point, however, Intermec has an advantage of being highly appealing to lower revenue tier organizations who largely invest in 1D barcode scanning technologies while waiting on the continued price erosion of 2D imagers.

The biggest challenge for Intermec with this product launch, marking the company’s first foray into the value-priced scanning category, might just be communicating the value propositions to its distribution channel partners. With such a broad portfolio of AIDC offerings across product categories, however, this industry behemoth can expect to cater to an extremely wide spectrum of end-user enterprises.

The press release for this product is available here.

Getting Ready For Item-Level RFID: Making the Business Case for Apparel

VDC will be participating in a webcast, hosted by Apparel magazine, with representatives from VICS and Checkpoint on RFID Item-level tracking (ILT) of apparel/fashion in Retail on December 1^st at 2pm EST.  We’ll be providing market intelligence pertaining to sizing and growth of the RFID ILT opportunity in retail and discussing some of the leading/emerging trends that are impacting this rapidly evolving market. 

To register for this webcast, click here

NFC Hits the Hub: Mobile Monday kicks off the Boston NFC Cluster

Last night’s Mobile Monday event in Boston confirmed that NFC is an increasingly hot topic whose appeal extends well past the sphere of mobility, as there was strong representation from the software developer, investment and media communities as well.

 Attendance for this event was impressive, with over 400 people turning out for the presentation and panel discussions. The major draw—in addition to the complimentary hors d’oeuvres—was the excellent speaker and panel roster, which included NFC heavyweights such as NXP, Nokia, Verizon and Ingenico.

The presentation and panel discussions covered a range of the usual NFC talking points, including adoption rates, timeline expectations and sales forecasts. Panelists expressed a spectrum of opinions, ranging from the bearish (one expressed the view that contactless payments are 10 years or more down the road, and that is if they are of interest to consumers and merchants) to the more optimistic (NFC smartphone shipments are expected to eclipse 100M in 2012).

This Mobile Monday gathering also marked the inaugural NFC Cluster Boston event. Moving forward, the NFC Cluster will hold regular NFC-related events and discussions in the greater Boston area. Given the tremendous success of last night’s event, the organizers indicated efforts are underway to expand the NFC Cluster initiative to other cities throughout the US. If last night’s event is any indication, these gatherings will provide great insight and understanding as to what industry leaders are currently doing with NFC. I’m certainly looking forward to seeing what the next event offers.

VeriFone's Acquisition of Global Bay Technologies

On November 1^st VeriFone announced its acquisition of Global Bay Technologies, a mobile retail solutions provider behind some recent mobile POS deployments including Guess and PacSun. This is in line with VeriFone’s strategy to invest heavily on inorganic growth strategies (to the tune of $1 Billion), as the company looks to expand its presence in key vertical segments & emerging country markets.

Global Bay has focused heavily on developing mobile POS applications, particularly for the iOS platform, to support a variety of applications including (but not limited to):

• Queue busting, speedier checkout
• Scalable POS bandwidth for peak hours
• Targeted sales, personalized promotions
• Enhanced labor efficiency – enabling product information lookup

What makes this acquisition interesting is that both VeriFone and Ingenico (with its iPA280) have, over the past few months, broadened their solutions offerings beyond payment and made an entry into the mobile POS market. VDC sees the market for enterprise mobile POS hardware growing at a CAGR of 11.4% over the next 5 years to around $230 million, and expects payment terminal vendors to offer stiff competition to the other suppliers in the space.

This acquisition by VeriFone is also in line with VDC’s assessment of the customer engagement technology market back in May (here), where we discussed how this universal mobile form factor is causing convergence in the supplier ecosystem for key product types, having them compete for tighter retail IT budgets.

Is VeriFone looking to extensively leverage Global Bay’s POS application platform to drive traction for its PAYware Mobile devices or its dedicated mobile payment terminals? Will consumer devices make an even bigger push into the retail in-store environment with this acquisition? These are some of the questions we expect to get an answer to in the coming months, going into 2012, as the concept of ‘mobility’ yet again redefines the competitive landscape for some of the traditional point-of-sale solutions.

 

Google’s Mobile Wallet has Some Competition – Where the Industry Stands Today

Mobile wallets are getting more publicity since the deployment of Google Wallet. However, there are other major mobile wallet providers planning on giving Google a run for their money including Isis and Visa that could change the competitive landscape.

Google – The Early Front-Runner
Google Wallet has had mixed reviews as the first NFC mobile wallet system. Despite a growing list of supporting merchants, the system has had a ‘lukewarm’ reception. Though Google has knowingly deployed their solution into a premature NFC ecosystem, they remain persistent in adding value and publicizing their product (to the effect of a gigantic NFC-enabled billboard outside of the American Eagle Outfitters flagship Times Square store in New York.) Google SingleTap is the most attractive function within the wallet in which a tap of your mobile phone will process a payment, redeem any existing offers and earn loyalty credit all automatically at once. 

Isis – The Potential Powerhouse
Isis has already won the support of numerous smartphone manufacturers and financial institutions, which has given them considerable leverage over their competitors. Isis is taking a different approach to rolling out their mobile wallet by holding off for the growth of more NFC-enabled phones.  By the end of 2011, 12 new NFC-enabled phones are expected to come to market, although Isis has yet to identify any specific smartphones that will support their service. Isis has a strong foundation and their flexibility, with the number of smartphone and service providers on board, will undoubtedly attract already subscribed customers to their product.

Visa – The Diamond in the Rough
Visa has remained relatively quiet about their plans to introduce their own mobile wallet. They are already a supporting financial institution of Isis and announced in September that their payWave system will work with Google Wallet as well. Ultimately Visa wants their system to work with any smartphone, wireless carrier or financial institution. By placing their eggs into several NFC baskets, they will already have a sizeable involvement with mobile wallets before they ever introduce their own.  This somewhat backwards approach may make Visa the ‘diamond in the rough’ and produce a head start for their own service when they decide to launch.

The next few months will prove interesting as we see how much NFC infrastructure is built. One question remains, how receptive will the Americas be to adopt this new technology? Only time will tell.

Note: This blog post was authored by Dan Mandell, Research Associate

VDC’s 2012 Barcode Solutions Market Coverage

We recently published the research outline for our 2012 coverage of the barcode solutions market (available here), with a focus on each of the following technology types – Barcode Printers, Scanners and Software solutions. 

We are expanding our coverage to include analysis on the Barcode Software solutions market with an aim to answer some of the primary questions about growth drivers for software investment, budgets allocated, supplier competitive landscape, etc. We expect to focus our coverage on building market estimates & forecasts for the following 3 areas:

1. Barcode Label Generation – maintaining compliance with industry, government and consumer standards
2. Remote Device Management – increasing uptime, and reducing downtime response
3. 2D Imaging Applications – enabling multi-application support on more robust development platforms

VDC is most excited to be offering “FastForward” reports, which will provide executive leaders with deep-dive commentary & analysis on the most important issues affecting the global barcode solutions market each quarter. Along with our continued focus on preparing supply- and demand-side focused barcode solutions reports, we will be providing insight on the following FastForward topics in the upcoming service year:

• Mobile Barcodes & the Consumer
• Imaging Applications – Beyond the Barcode

Given that 2012 is now almost upon us, what do we expect to keep an eye out for in the barcode solutions space? While we’ve discussed this extensively in our Webcast, here are some of the key trends that we expect will shape the marketplace over the course of the next 12 months:

• The barcode solutions markets has been considerably impacted by economic volatility and pushing back of refresh cycles over the past year
• Intensified competition from suppliers in APAC
• Increased interest in AutoID technology convergence (Barcode, RFID, RTLS, NFC) to extend platforms & provide unprecedented value
• Growing partnerships with the ISV community in response to increased demand for convergence, integration, and application development & support

We look forward to having extensive discussions with the barcode supplier community as we continue with our research initiatives and explore new & emerging trends in the marketplace for 2012.