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

AT&T Enables Mobile Marketing Beyond Large Retailers and Brands with New Small Business Services Offering

AT&T recently announced that it will be extending mobile barcode services to its small business customers. As mobile barcodes continue to gain in popularity, businesses of all sizes including smaller retailers, brands, restaurants and enterprises will have an opportunity to deliver marketing content to consumer mobile devices. 

The AT&T Code Management Platform enables small businesses to create and manage mobile marketing content. The platform provides customized, pre-made templates to easily create mobile-optimized web land pages. The results of scanning a 1D or 2D barcode can also be changed without replacing the physical codes to keep content up-to-date. After users have created their mobile barcodes, they can use the platform’s reporting tools to measure the effectiveness of any given campaign.

VDC’s research in mobile barcode scanning confirms that mobile barcodes are no longer a stranger to the mobile consumer. The vast majority of Tier 1 retailers and brands (i.e., Macy’s, Best Buy, Coca-Cola) have deployed some form of mobile marketing with barcodes. Meanwhile, smartphones are becoming more widespread with improved displays and cameras. These advances in consumer exposure and comfort with scanning and displaying barcodes using their smartphones will continue to help drive mobile marketing. 

VDC views the new offering from AT&T as a critical market enabler as AT&T is catering to an underserved community of Tier 3/4 small merchants that typically lack the resources and/or expertise required to launch a successful mobile marketing campaign on their own. The company’s extended mobile barcode services offers small businesses the opportunity to deploy an effective, lower-cost marketing strategy that leverages an increasingly popular behavior among consumers equipped with smartphones – namely, mobile barcode scanning.

We expect that mobile marketing services targeted at smaller enterprises will help increase mobile barcode scanning traffic among consumers. Furthermore, consumers want to do more with their smartphones in terms of mobile barcode scanning at more places. In fact, our research reveals that “the ability to scan barcodes in a diversity of stores” was rated the second most important factor in terms of scanning experience in retail stores, with an average consumer rating of 3.68 out of 5.  Given this consumer desire/level of interest, the new services from AT&T are expected to enable smaller business to better serve, target and market to their customer base. 

VDC recently published the “Mobile Barcoding, The Consumer & The Retail Enterprise” FastForward which provides deep insight into the expanding adoption of mobile barcode scanning. For more information on this report please click here: Mobile Barcodes & The Consumer.

Retail Automation in 2010: What Needs to Be Done to Operate Successfully?

In yesterday's webcast, we provided a sneak-peek into the data from our 2010 Retail & Transaction Automation Equipment Business Planning Service. 

The webcast was recorded and the slides can be found below.  We encourage you to review both to get a good high-level picture of the current state of the traditional and next-gen retail and transaction automation markets, and how customer experiences with multiple technologies are aiding, or hindering, retail automation supplier efforts to gain traction in this turbulent market. 

To quickly summarize some of what we covered, we thought we'd use this platform to share how retail automation suppliers can operate successfully, given the still-turbulent state of retail today.

• Recognize and leverage your strengths – above your brand – in alignment with the common key product and vendor selection criteria including: reliability, durability, product quality, price and ease of use.

• Be specific, differentiated and relevant when it comes to your product(s) because brand matters less than ever when it comes to product selection – and customer requirements differ materially across certain product class boundaries. 

• Promote ROI.  Adoption in every product category is being hindered because of fuzzy ROI.  

• Take on the integration / compatibility challenges by thinking about new product opportunities or brand-worthy opportunities.

• Develop your communications/ network management capabilities, both wireline and wireless, as it addresses the acute challenges of integration  and compatibility.

• Study how some of the differences in requirements and preferences across technical segments can be as powerful as the differences across vertical segments.

Staying Ahead of the Joneses: Retail Automation in 2010

View more presentations from VDC Research Group.

2009 Retail Automation Investments Hampered by Store Closings and Shifting IT Priorities, Spurring Holistic Innovation Among Tier 1 Suppliers

We have nearly completed our research campaign with leading and emerging suppliers of retail automation solutions.  We’ve learned that 2009 was a challenging year for many of these suppliers, as leading retail chains extended their refresh cycles for core POS solutions and related components.  This contraction left many retail automation suppliers with a short list of less than compelling strategic alternatives likely to create margin compression that could adversely impact the industry long after these markets recover. 

Thankfully, many of the thought leaders we interviewed took a different tact, innovating well beyond feeds and speeds to address the operating requirements of deploying enterprises more holistically, all while reducing the CAPEX burden and providing a clear migration path to next generation technologies.  As the appetite for retail automation investments rebounds in 2010, these suppliers are reaping the benefits of investments made to broaden their software and managed service offerings:

• Access to new sources of revenue
• Increased customer retention
• A higher degree of insulation against competitive displacement

We’re seeing examples of this type of holistic innovation in many of the retail automation technical segments we cover including self check-out, kiosks, and digital signage, reflected in the revenue contribution many suppliers are attributing to software and services compared to previous years. 

We believe the viability of managed services as a growth strategy is strongest for those suppliers who have direct selling relationships with their key accounts, broad product portfolios, and the strategic alliances required to support new application development and commercialization.  As the retail automation markets rebound in 2010 and beyond, these suppliers will emerge better positioned to address the requirements of their key accounts with flexible and scalable managed services offerings, providing a viable source of differentiation against more hardware-centric suppliers of retail automation.

These themes and other trends will be expounded upon in many of the retail automation technology market analysis volumes being published in the weeks ahead.  Stay tuned.

Taking the Q2 2010 Pulse of the RFID End User

Today we hosted a webcast highlighting the results from our recent survey of RFID end users. Some high-level findings from the survey that were presented in the webcast were:

• RFID spend is expected to dramatically increase by 2011, largely in order to support scaling deployments and deeper integration.

• Although significant growth is expected for most applications, adoption of anti-counterfeiting, WIP/assembly, POS, contactless payment, shop-floor automation and people tracking/labor management applications is expected to triple by 2011.

• To help facilitate adoption and capitalize on opportunity, suppliers should focus on:

• Providing enhanced, measurable and reproducible efficiencies and business models;
• Error reduction / more automation and deeper integration; and,
• Increasing visibility in conjunction with an enhanced ability to port intelligence to key stakeholders.

• Interest in managed services deployment is brewing because it not only offers the benefits of RFID with less risk, but it also expands the technology’s serviceable available market.

To get an even more detailed look into the mind of the RFID end user, we hope you’ll scroll through the slides below or take the time to listen to the webcast recording.

Put Your Finger on the Pulse of the RFID End User

View more presentations from VDC Research Group.

Retail Automation Industry Expert Opinions Needed

VDC is conducting its semi-annual survey of companies deploying retail automation systems.  If you are involved in the selection of the retail automation systems deployed by your company, this is your chance to have your voice heard by the supplier community. 
 
Our research covers traditional retail automation solutions (POS terminals and peripheral technologies) self-service technologies (kiosks, SCO and more) and multi-channel marketing platforms (including digital signage and m-marketing and commerce platforms). Your perspective will improve the insights we deliver to the supplier community and help to influence next generation solutions.
 
Every respondent who completes the survey will receive:

• Instant access to a summary of the 2009 Customer Interaction Management (CIM) 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 survey, go to: http://vdcresearch.com/survey/10raps_user.html
 
Thank you very much for your assistance.
 
 
Best Regards,
 
The VDC AutoID and Transaction Automation Research Team

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

HIMSS 2010: Who Stands to Benefit from the Stimulus Package?

This year’s HIMSS conference was enormous.  With 888 exhibitors filling nearly all the space available at the Georgia World Congress Center, it’s impossible to understate the magnitude of healthcare’s largest tech event.  Everyone who wasn’t discussing the stimulus package was thinking about it.  With between $20B and $23B proposed for healthcare information technology (HIT), it’s easy to understand the all enthusiasm, particularly when you consider that the total HIT market was a meager $26B prior to the economic downturn.

But, this year’s exhibitors were cautiously enthusiastic, and justifiably so.  For years, market research firms have been touting healthcare as an industry ripe for technology investment.  After all, core enabling technologies including wireless networks, mobile devices, barcodes, RFID and RTLS are ideally suited to improve the efficiency and quality of healthcare delivery.  However, the adoption of sweeping reforms that would fuel these investments, e.g., EMR, CPOE, Unit of Use Packaging, etc., has been gradual, almost tectonic.  Some technology companies attracted to healthcare by the prospect of “full scale adoption” have since abandoned the market, while others have made measured investments in product development, strategic alliances and channel marketing that will likely pay dividends in the very near future.  What do these suppliers have to say about selling technology to healthcare providers?

1. Established processes are king.  Provide an investment roadmap that is evolutionary, not revolutionary.
2. Interoperability with existing IT infrastructure is essential (see the king with questions).  What does this mean?  Strategic alliances and co-development partnership agreements.
3. Every healthcare institution is unique. Reference accounts and ROI calculators only get you to the table.  The viability of technology investments must be proven in house.
4. Managed service offerings resonate.  The most effective managed service offerings provide the scale and flexibility required to justify ROI and extend core offerings to support new applications.
5. Healthcare practices within technology companies should be supported by dedicated key account management teams who provide accountability for installed systems and identify new business opportunities.

Whether a proposed $20B cash infusion represents a pay day for these suppliers remains to be seen.  But one thing is clear; those who have invested wisely in market development now have the market knowledge and relationships required to prosper, and the credibility required to fend off fast followers.

The 'New' Retail - Pursuing Balance Between Strategies & Tactics That Influence The Point of Decision Experience

What's new in the retail & transaction automation equipment market?  That question was the focus of a webcast we hosted yesterday.   If you missed it, don't worry, we recorded it.

To sum it all up:  The recession accelerated the pace of change in an already tumultuous consumer economy.  As a result, the pressure for retailers and other b-to-c operators increased exponentially.  Apparel retailers working on out of stock issues suddenly needed to radically reduce inventory carry cost.  Sporting goods retailers training 500 associates on merchandising, saw their trainee corps shrink by 30%, and the focus for those teams shift to customer greeting.  

In an earlier time, these companies might have been able to make the transition without much fallout.  Inventory reduction goals would be met with perhaps some marginal rise in out of stock.  Promotions effectiveness might dip marginally, but, customer satisfaction levels might have risen at the same time.  

Today, in 2010, retailers cannot afford to sacrifice one capability for another.  They need to find a way to balance these competing requirements or risk continued revenue decline, margin compression, and share loss.  

In order to make progress on one dimension, and not fall behind on another, retailers and b-to-c operators, need even smarter solutions from ever more agile retail technology and transaction automation suppliers.  

To get more than just the summary, scroll through the slides.

Retail & Transaction Automation Equipment - Market Update and 2010 Outlook

View more documents from VDC Research Group.

RFID Adoption Expected To Be Strong in 2010

The impacts of the recession were felt as early as late Q2 of 2008, with the first half of 2009 demonstrating some of the slowest growth the RFID industry has ever bore. Many end users cut their 2009 RFID budgets and either slowed or stopped evaluations, pilots and deployments; however, we are happy to say that recent data gathered during the second half of 2009 indicates that spending on RFID is on the rise and, in fact, many supplier opportunity pipelines and end user budgets are expanding once again. As the economy becomes more stable, end users are freeing up budgets and returning/reviewing their RFID adoption plans with increased vigor and a broader vision.

Why? Well, there are several reasons behind this, including but not limited to …

• The end user is expecting to do more with RFID and the supply community is more prepared to meet those expectations (see our previous blog).
• As the end user leverages the business intelligence available from RFID to gain operational, cost, and other efficiencies and advantages, the solution will continue to become more core to the enterprise and its supporting value chain.
• Adopting RFID has become simpler and less risky. For example:

RFID has increasingly been positioned as a complementary technology to a diversity of legacy solutions and infrastructure (i.e.: Barcode). This has not only enabled the end user to become acclimated to the technology at their own pace while limiting risk, but also has given the RFID supplier community a platform on which to build/strengthen and grow relationships, as well as help their clients fully understand the value of RFID and how this value can be extended throughout the enterprise.

New sales models (i.e.: Managed Services) are being introduced that enable more users – many of which would not consider RFID due to its high capital requirements – to obtain the benefits of the technology while mitigating risks associated with opportunity cost and obsolescence. These solutions are expected to make RFID accessible to new users, particularly small to mid-size businesses, who have limited access to capital for large scale investments.

RFID suppliers are more knowledgeable, savvy and experienced.

• Hardware continues to be commoditized while performance continues to improve, thus lowering the price/performance ratio and making it easier to justify adoption. For example, in the first half of 2008, most CPG firms could not justify tagging a product (with an EPC Gen2 UHF Label) valued at less than $25, but in the second half of 2009, these same companies have reassessed that value to be around $15 and expect it to drop to $10 within 12-18 months.

We know that there are more reasons behind the anticipated upswing in RFID adoption and look forward to identifying, validating, and discussing them here and in our reports throughout the year.