What is the next step in the evolution of the barcode scanner market? Are vendors going to be restricted to B2B transactions or is there a potential consumer device opportunity for them here? In this blog post, VDC will focus its attention on two at-home scanning devices – Hiku Labs’ Hiku and Amazon’s Amazon Dash (both the wand and the button).
Hiku, an in-home barcode scanning solution designed by Silicon Valley startup Hiku Labs, is a 1D barcode scanner with a built-in microphone to help consumers build grocery and shopping lists. The product can be used at home to generate these lists by either scanning barcodes on everyday items or speaking into the device. It was first introduced to the market in October 2013 and is compatible with both Android and iOS.
What VDC finds particularly interesting is that Hiku’s executive team considers this to be a reference design or proof-of-concept while placing more value in the “smarts” built into the device (as opposed to the hardware itself). This start-up is open to having OEMs build devices that leverage its cloud-based platform, which includes barcode lookup, voice transcription, and data synchronization. Its platform enables users to scan and recognize items by retailers that do not make their UPC codes available to the public – by crowd-sourcing barcode label information and uploading it to the cloud.
As it stands today, the company’s decision to launch an in-home scanner with a 1D linear imager is purely based on the fact that most barcodes in circulation today (as part of product identification labels) are 1D. The mic allows users to add items that, for instance, they may not have around to scan. The Hiku hardware also has a magnet by which a consumer can place it on their fridge or any such surface in the kitchen. Forgoing the traditional Bluetooth connection, Hiku supports a wireless b/g/n connection to connect to the internet and user’s phone. Items which are scanned or picked up through the microphone are sent up to the cloud platform, where the item is recognized and then added to the user’s shopping list. Hiku Labs wants the product to be device-agnostic, with the ability to upload across a variety of different types of hardware and OS platforms. Hiku’s creators want OEMs to leverage their APIs and platform for at-home scanners – essentially creating hardware that plugs right in with Hiku’s solution and its capabilities – all while keeping overall costs in mind. The goal is to have consumers always pay a flat price for these products – no recurring fees or subscription-based models.
The device, as it stands today, is being piloted by notable supermarket chains – Waitrose in England and Cole’s Supermarkets in Australia; the company also announced a full rollout by French supermarket chain Chronodrive in March 2015 – marking it the first commercial availability of Hiku in the world. The device and API support multiple languages as Chronodrive customers are mainly French speaking. While Hiku is successfully piloting its products internationally, the company is yet to announce any major tie ups in the US. With the vision of providing what Hiku calls “frictionless shopping,” the company wants to reduce the steps involved in replacing items that consumers run out of. Via its partnership with Chronodrive, Hiku has enabled seamless scanning and listing of items through the device to the retailer’s app, and a mobile/e-payment option, and then having consumers simply picking up the desired items from the store-of-choice.
What VDC views as one of the primary adoption deterrents is the fact that this solution, at least for now, is designed to support only one retailer at a time, making it quite an expensive proposition for consumers looking to ease the shopping list creation process. Hiku has dropped its price per device from $79 to $29 (special promotion), making it slightly more palatable, but costly nevertheless. Most, if not all, shoppers shop at more than one store at a time. Hiku’s “exclusivity” clause with retailers could be detrimental to its future growth, making it something the company needs to work on.
Along similar lines, Amazon introduced the Amazon Dash (wand) in 2014, aimed at Amazon Fresh customers in California and Seattle. Like the Hiku device, this wand scans barcodes and is also capable of transcribing voice commands – connecting to smart devices (smartphones, tablets, laptops) via Wi-Fi, and automatically adding items to the customer’s basket on Amazon Fresh. Customers have access to everything from groceries to electronics, household tools, and games via their Amazon Fresh subscription. From VDC’s perspective, Amazon is likely to be more successful with this product than any of its competitors in the marketplace because Amazon.com is a one-stop shop, capable of fulfilling all of a consumer’s shopping requirements – plus, available for free. For now, however, its limited availability (by invitation only) is potentially holding back consumer use.
Amazon also revealed its Dash button 5 months ago, again as an “invitation only” product, but made it available to all its Prime members on September 2nd. This product is designed to help consumers instantly order more of a single product at the press of a button, pushing a confirmation notification on the phone before it ships. The company now has more than 29 CPG brands (including Bounty, Clorox, Hefty, Tide, and Ziploc) and 500 products that can be ordered with the click of a Dash Button.
The at-home scanning market still has a long ways to go, of course, but it is interesting to talk about and follow all these developments. Leading AIDC market participants are eager to learn more about how they can potentially target the end consumer with their products, and this certainly sounds like the right kind of opportunity. Potentially. While there certainly is an OEM scan engine opportunity here, can traditional barcode scanner vendors do more from a (final) product design, development, marketing, and innovation standpoint? Or is the smartphone going to be the primary at-home scanning device for consumers? Would it be more judicious for retailers to integrate voice recognition and enterprise-grade barcode scanning types of capabilities into their consumer device application itself?
VDC will explore this topic while discussing products like the Amazon Dash and Hiku in its Mobile Scanner report scheduled to publish in Q4 2015.
(With Shahroze Husain, Research Associate)