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

Get a Little Closer to your Sweetheart with AutoID

Are you a Valentine’s Day procrastinator? You are not alone and it’s not too late.  AutoID is here to save the day.  In the spirit of everyone’s ‘favorite’ Hallmark holiday, we decided to blog about how an AutoID-enabled ecosystem can help ensure a romantic, love-filled day with your significant other.

OK – you’re late to the game because you’re just coming home from a business trip, but no sweat … you’ve got your NFC-enabled smartphone (which you used as your boarding pass).  As you get off the plane and sprint toward the baggage claim, you pass a flower dispensing kiosk that has the perfect bouquet.  You quickly select the bouquet, swipe your phone near the machine, approve the transaction with a tap and voilá, instant flowers for you to hand deliver.

You grab the flowers and make your way to the baggage claim.  Although you take solace in the fact that your bag isn’t lost because the airport is using RFID, you still get there before the bags come out and know you’ll be there for at least a ‘few’ minutes. During these valuable few minutes, you call to make a dinner reservation at her favorite restaurant and are told that the only reservation they have is for 10pm and the table is next to the kitchen.  But you don’t panic, because this restaurant has a loyalty program that ensures a premium table for its members and you are a longtime member.  So you go online, transmit your loyalty card information (as a tech savvy user, you already have this scanned into your smartphone) and reserve a table for two in a dark, romantic corner.   

Surprisingly, your bag comes early – must be that RFID system – and you are quickly on your way home, speeding along the highway using your toll transponder to avoid the long lines – and added stress - at the toll booths.  You finally make it home, with flowers in hand, are greeted by your significant other with open arms, and are summarily rushed out of the house to make your dinner reservation.

Upon arriving at the restaurant, the hostess scans your loyalty card (displayed on your phone) to authenticate your reservation.  You sit down and enjoy a lovely meal.  When the bill comes, you pay with your NFC smartphone – at the table, with a quick and virtual ‘high five’ with the waiter’s device.  As you are walking out of the restaurant, your sweetheart sees a movie poster advertising the latest Rom-Com (romantic comedy) and says they want to go.  You quickly hold your NFC phone to the movie poster, watch the trailer and decide that this is not the movie for you both, but another movie playing at the same theater is.  You buy your tickets online and drive to the cinema.  At the cinema, you display your tickets on your phone, have them scanned (barcode) or read (NFC), make a quick stop to grab some soda and popcorn (again paying with your phone), and watch the movie. 

You’ve had a successful and romantic evening, but wait…we’re not done yet.  Keeping this blog post rated ‘G’, you get home and both of you slip into something more comfortable.  As you cuddle up by the fire with a glass of merlot, you use your NFC phone to pair with your Bluetooth speakers and play some smooth jazz to set the mood.  The rest is up to you – even AutoID has its limits.

Happy Valentine’s Day!

Barcoding at the NRF

I’m back from spending an interesting day at the NRF Expo in New York City. The booths were teeming with activity, and an extensive array of products was on display – mobility, of course, continued to be the raging theme dominating the in-store customer engagement technologies market. 

The barcode scanners and printers showcased at this show set the tone for what we can expect to see from the supplier community in 2012 – tweaks to existing product lines based on internal assessment and customer feedback, as opposed to radical product innovations.

Barcode Scanners

• Motorola has marked its entry into the general-purpose linear imaging space with the cordless LI4278 (which can be mounted on the cradle used by its popular Laser Scanner LS4278), featuring high angular & motion tolerance, a fairly snappy decode performance and also capable of scanning 1D mobile barcodes. While not a low cost device, the company expects this to potentially upstage laser scanners in the long run. It’ll be interesting to see how Motorola pitches this product against its extensive 2D array imager portfolio, especially given the relatively low price differential between the two. For now, it looks like retailers with an exclusive focus on 1D barcodes (for their loyalty and marketing programs, for instance) might choose this product over 2D imagers.
• HP released its very first presentation scanner, with the ability to read both 1D and 2D barcodes, placing it in direct competition with the likes of Honeywell’s Genesis 7580, Motorola’s DS9208 and Datalogic’s Magellan series. The company’s products are targeted exclusively at the retail environment, and the introduction of this scanner plays well with setting HP up to be a one-stop shop for all of the retailer’s in-store technology needs. Retailers, particularly among the lower revenue tiers, are increasingly looking to 
• Code Corp has decided to move away from its fairly exclusive focus on the healthcare vertical, with an aim to largely capitalize on the mobile barcode scanning opportunity. Their new low cost, entry-level area imager offering, CR900FD, comes out-of-the-box ready to scan standard 1D barcodes with retailers having the option to upgrade to support 2D barcode scanning functionalities at a later date, when the need arises. This concept was floated around by Honeywell in 2011, allowing end-users to pay for & unlock latent 2D capabilities post-purchase, future-proofing (and securing) their barcode scanning investments. VDC expects features such as these to enable a smooth & rapid transition to 2D imagers without significantly interrupting business processes and also minimizing the need to overhaul existing infrastructure.

Barcode Printers

• Source Technologies continues to be fairly aggressive with its strategy to expand and extend its product portfolio and stay competitive with barcode printing industry behemoths including Zebra and Datamax O’Neil. At the NRF, the company announced 2 new printer models – STp.1115 and STp.1125 – highlighting features including durability, ease of use/loading and print speeds. The company has a long way to go in establishing a name for itself in the thermal barcode printer market but seems to be headed in the right direction, establishing strategic partnerships with the channel community and actively marketing its new solution offerings.
• Brother Mobile Solutions officially released its 4” Motorola-certified, industrial-grade RuggedJet mobile printer (Bluetooth and Wi-Fi models). VDC’s end-user survey respondents have, over the past 12 months, continually highlighted the importance of multi-application support with their barcode printers and these models certainly address this need with the capability to print both barcode labels & small forms/documents, and featuring an add-on payment capture ‘sled’.

The key takeaway from this show is how suppliers are increasingly enabling retailers to look beyond the traditional track-and-trace & inventory control (back-office) applications, and leverage barcodes to support and strengthen their marketing initiatives, with an emphasis on enhancing overall customer experience.

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.

Changing Regional Dynamics of the Barcode Printers Market

VDC’s annual coverage of the barcode printer market is pointing out to a significant regional trend – the growing dominance of Asia-Pacific. According to our recently published estimates and forecasts, the Asian market is expected to continue to account for a larger share of the overall revenues derived by printer vendors the world over – having outpaced EMEA in 2008, and slated to take over North America, when it comes to barcode printer investment, in 2015.

This stupendous (acceleration in) growth can be attributed to a number of factors including:

1. Infrastructure Development – Geographic demand for barcode printing solutions is shifting as vendors increasingly move their manufacturing operations base to emerging country markets, particularly in the Asia-Pacific region. Our market estimates indicate that APAC accounted for over 39% of the revenues that barcode printer suppliers derived from sales to the Industrial/ Manufacturing sector in 2010, a higher share than both Americas and EMEA.
2. Adoption of Global Standards – VDC expects the growing number of standards & compliance regulations across industry verticals to have an impact on barcode printer sales. Organizations are looking to leverage traceability to generate operational efficiencies, in addition to meeting government & industry mandates. Barcode solutions providers are tapping into growing opportunities within the perishable goods supply chain, for instance.
3. Dealer/Distributor Model – This is among the fastest growing distribution methodologies in emerging country markets, and is being heavily leveraged by barcode printer vendors in the APAC region to drive sustainable growth. Dealer/distributors (including VADs) sell to resellers who best understand local market ‘environments’ and are a valuable source for customer feedback. They also provide suppliers with access to a growing number of VARs and System Integrators. VDC’s latest research indicates that this channel is accounting for an increased share of suppliers’ barcode printer revenues.

We expect to continue exploring all of these trends and more in our coverage of the market for Barcode Printers when we launch our 2012 Barcode Solutions Market research program. You can find the outline for the same here.

My Experience at the AIM and PACK Expos

I spent two days at the AIM and PACK Expos in Las Vegas this past week.  Although light on enterprise end user foot traffic on the show floor, the AIM Expo was chock full of great sessions and presentations and turned out to be a decent peer networking event.  Most exhibitors I spoke with were expecting more of a carryover from the mammoth PACK Expo; however, the general consensus was that the sessions on various AIDC and Mobility technologies and applications made up for the shortcoming.  Personally, the slower-than-expected traffic worked in my favor as I was able to spend more time talking to the highly knowledgeable individuals manning their booths.  Special thanks to Citizens, Seiko, Datamax-O’neil, Datalogic, Intermec, Seagull Scientific, MetalCraft, DAP Technologies, Feig, Infineon, Source Tech, Flexcon and Bluestar.

The Pack Expo was huge!  Word on the street was that there were more than 30,000 attendees walking a show floor that seemed to never end.  There were impressive displays of automation, robotics, packaging and labeling, but surprisingly, there was little about AIDC solutions.  Sure, barcodes were being printed and applied at many booths, but with the exception of a few vendors, I did not get to see every booth.  Vendors such as Intermec, ITW and Videojet, track/trace solutions were severely underrepresented.  Now I know that this is a packaging and automation show, but I really expected to see more AIDC solutions represented, especially since it is a critical part of the packaging solution for most vendors (and since nearly every box being prepared or packed had a barcode on it!)

The lack of AIDC solutions at the Pack Expo was most likely the reason for the limited traffic flow to the AIM conference.  Regardless, I enjoyed both shows and very much appreciated the time and attention the vendors afforded me.  Even though I’m immersed in the AIDC market on a daily basis, I gained an enormous amount of knowledge, particularly from the AIM sessions. 

A few highlights include:

• Bluestar’s ‘In a Box’ solutions.  What a novel concept - packaging a complete, application specific solution together … in a box.  Easy to set up via basic directions and a comprehensive configuration by Bluestar leveraging their diverse portfolio of products, software and services.   Talk about an out-of-box experience.  Check it out on their website http://us.bluestarinc.com/in_a_box
• Source Tech’s new thermal printers.  Very user friendly and offering additional functionality (i.e.: USB and open software platform) while still meeting customer preferences and remaining highly price competitive.  Check them out on their website http://www.sourcetech.com/

Limited Capacity for Thermal Ribbons to Create Opportunity for Direct Thermal Solutions

Leading suppliers of thermal transfer ribbons are facing raw material constraints, which means they will be raising their prices and placing their largest vendors on allocation by establishing fixed volume commitments for 2011.  Why? Thin film PET suppliers have shifted capacity to meet increased demand for thicker films used in support of more profitable applications, such as the production of flat screen displays.  This shift in capacity, coupled with other raw material price increases (wax, resin, solvents, etc.), has left thermal transfer ribbon converters scrambling to meet the demands of an increasingly price sensitive market. 

While most leading converters believe the raw material capacity issue will be resolved in 2013, many are thinking about what a thermal transfer ribbon shortage might mean for their business.  At VDC, we’ve witnessed a gradual, but persistent migration from thermal transfer to direct thermal printing technology over the past decade, and data collected in Q4 of 2010 suggests that this trend will continue throughout 2011. 
 
 
In 2010, direct thermal and thermal transfer label material shipments were virtually the same; however, now that capacity and raw materials pricing pressures are plaguing the ribbon supply community, we are predicting an accelerated migration, particularly in markets with a high use of wax ribbon printing on common substrates and where today’s direct thermal media represents a viable alternative to thermal transfer.  Which applications?  Those 4X6 compliance shipping labels that have been bread and butter for thermal transfer solution providers for decades will certainly receive increased scrutiny, as will other applications as deploying enterprises take another look at direct thermal media and its capabilities.

Barcode and RFID Convergence is Not About Technology

Tom Wimmer and I gave a presentation on this topic yesterday in support of the white paper we just published for GS1/EPCGlobal US, the crux of which can be summarized by the following:

• Technologies are being integrated with each other because the end user wants to leverage the information and attain the benefits from each independent system.
• Gathering and sharing information from independent systems can be attained by creating consistency within common architectures.
• This consistency can be accomplished by developing a single, unifying platform that will ensure that the information being used is essentially the same … a standard.
• Although technologies continue to be integrated with each other and leverage a diversity of carriers, the real convergence is occurring at the data level.
• Convergence is not about technology, it’s about commonality.

The PowerPoint presentation for this webcast is provided below.  If you’d like to listen to the audio recording, it can be found on the GS1 website at:  http://www.gs1us.org/epcglobal_us/education

Barcode & RFID Convergence: Enabling Greater Visibility Through Standards

View more presentations from VDC Research Group.

Industry Expert Opinions Needed

VDC is conducting its semi-annual survey of companies using, deploying, or evaluating the following systems:

• Retail Automation (i.e.: POS terminals & workstations, Kiosks, Self-Check Out, Digital Signage, ESL, Imaging, Payment Terminals, etc.)
• Bar Code (i.e.: All bar code scanning and printing solutions)
• RFID (i.e.: All RFID related hardware, software, and services)

If you are involved in the evaluation, purchasing, use or maintenance of any of the above solutions at your company, this is your chance to have your voice heard.  Your perspective will improve the insights we deliver to the supplier community and help influence next generation solutions.

Every respondent who completes a survey will receive:

• Instant access to a summary of the 2009 survey findings;
• Entry into a drawing for one of five (5) $100 Amazon.com gift certificates (drawing to be held August 30th, 2010) ; and
• An executive summary of our 2010 survey findings once the results have been tabulated

To begin the Retail Automation survey, go to: http://vdcresearch.com/survey/10raps_user.html
To begin the Bar Code survey, go to:http://vdcresearch.com/survey/10_aidc_eu.html
To begin the RFID survey, go to: http://vdcresearch.com/survey/10_rfid_eu.html

For Long-term Growth & Prosperity, AIDC Suppliers Should Take a Second Look at Disqualified Leads

Can a lead generation engine be too efficient? 

Leading AIDC suppliers generate tens of thousands of leads each year through website interactions including web inquiries and on-line referrals, whitepaper downloads, software downloads, and through inbound traffic generated from various marketing initiatives.  Separating the wheat from the chaff enables these suppliers to quickly identify opportunities with an immediate need and supporting budget from those opportunities that that will require nurturing. 

The lead management teams we have worked with understand that the cost associated with a lead increases exponentially as the lead progresses through the sales funnel, and that the penalty for a slow response to an initial inquiry is a lost sale.   For these reasons, those leads with easily qualified budget, authority, need and timing (BANT) are prioritized and distributed efficiently, and hopefully effectively.  Those leads that are not as easily qualified, the vast majority of inquiries, receive less time, attention, and follow-up.

From the perspective of a quota carrying account manager with limited resources, sales effectiveness depends more on effective lead qualification than any other step in the lead management process.  By only burdening account teams with those leads that meet the organization’s strict qualification thresholds, AIDC suppliers are able to improve their yields on marketing investments and close a higher percentage of deals.  That’s a good thing, particularly during recessionary periods, when resources are constrained.  Simply put, relaxing lead qualification standards to provide more leads to account teams and channel partners makes no sense. 

What does make sense is ensuring that those leads that do not qualify today are properly characterized and nurtured to yield future business.  In our experience, the lead management bone yard is often teaming with longer-term opportunities and valuable insights regarding emerging applications.

In fact, we know of one supplier that is particularly adept at periodically and systematically reviewing disqualified leads and lost sales opportunities to identify underserved customer segments.  In one case, this supplier was able to identify an emerging application quickly, making strategic investments in new channel development by green-lighting a short list of channel partners that did not previously meet the organization’s partnership requirements. 

In less than two years, the annual revenue contribution associated with the emerging application skyrocketed, eventually eclipsing revenues associated with the core applications for which the product was originally designed. 

Too many suppliers, even share leaders, are often overlooking this rich repository of information, sacrificing long-term growth and prosperity for near-term gains in marketing and sales efficiency.  We would argue that this is precisely the right time to revisit disqualified leads and see what can be gleaned from them to refine lead qualification processes and drive future product development and channel marketing initiatives. This is one of the themes we’ll be exploring in our 2010 Barcode Segment Offering Analyses. 

In the next installment of this series, we’ll be taking a closer look at another source of lead management effectiveness and entropy: lead distribution.  Until then, we’d like to hear from you.  Does your organization frequently revisit disqualified leads, and if so, what have you learned?

Which Market Segments Will Provide the Strongest Near-Term Growth Opportunities in Barcode & RFID?

We answered that question - and many others -  in a webcast we presented this week which took a "where are we going, where have we been," look at the barcode and RFID markets.

The webcast was recorded, and we've posted the slides below. 

The "where are we going" portion of this webcast was just a preview of our research to come in both of these areas; which will provide players in these markets context and commentary on market trends, applications, end user requirements & preferences, use environments and supplier strategies.  Contact us to learn more about how you can provide input on the study architecture, scope and direction of this research.

Barcode and RFID – Market Update & 2010 Outlook

View more documents from VDC Research Group.