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

Despite limited current adoption, self-service’s future in health care remains attractive.

Within the highly fragmented health care vertical market, self-service penetration remains limited to select Tier I service providers (i.e., hospitals). In addition, the majority of these installations are still defined as being in the early phases of pilot or beta tests. Despite this limited adoption, suppliers and channel organizations are confident that such solutions are carving out their niche and will have bright futures within the vertical.    

In general, healthcare organizations are evaluating methods to improve patient service and security, improve accuracy of information and reduce operational costs. Self-service and customer interaction management solutions are in position to remain a top priority for health care providers as they address these and other issues.

Self-service’s future within the health care vertical market remains heavily dependent on increasing acceptance and preference for the solutions by medical professionals. In order for the market to achieve its projected success, vendors and enterprises must work together to effectively motivate and train employees on interaction with such solutions.

Currently, several self-service suppliers have been leveraging completed installations as educational platforms to ease adoption for other departments, practices or enterprises.  It is extremely important that while educating employees on the use of such solutions, they be positioned as supplements and not replacements. If deployed appropriately, health care service providers will improve their ability to track, manage, and react to patients across locations.

Another way for suppliers to ease adoption of self-service solutions would be to improve the next-generation of their solutions by focusing on its ‘ease of use’ and ‘reliability.’ The ability to improve these two criteria will correlate directly to the success of an individual deployment, and more broadly, the market as a whole.

These issues and more are explored in depth in VDC’s most recent Transaction Automation publication, Self-Service and Customer Interaction Management Solutions: Vol.3 Health Care. 

Jujitsu at the Point of Decision

The point of decision. In retail, it used to be the moment, on the retail floor, when the customer made their final commitment to buy, or to move on. It was at an aisle header, at a display, in the dressing room, at the check out counter. Often with an associate. Just as often without. 

During the past decade, the point of decision migrated from the retail floor to create a diaspora-like pattern of decision points. E-tailing produced nothing short of a seismic shift in b-to-c theory, strategy, reality. That story has been well documented … perhaps a thousand times. Retailers saw their web sites as a new point of decision equal to their centuries old, newly coined ‘bricks and mortar’ stores.

When consumers ‘returned’ to bricks and mortar, their expectations changed. They required more accurate information, in real time. They wanted to know what their options were. They had questions about how much customization was available to them. They demanded alternative payment terms and delivery options. Consumers learned a lot on the web. And they came into stores armed, and for the wrong retailer, dangerous. For retailers prepared for this, these informed consumers became better customers. 

Prepared retailers shared a number of common attributes – if not a thousand different tactics. One of the most powerful, common attributes, was the deft deployment of self-service solutions. These new internet age consumers – armed with so much real-time, accurate information were conditioned to help themselves. Especially after frustrating experiences with over-matched associates. The right kiosk implementation represented the bridge between consumers online and in-store experiences. 

And then, faster, cheaper network connections. And wireless. And the point of decision splintered into billions of intersections of space and time and location. At home on the phone. On PCs at home or at work. Cell phones in the car. PDAs on the street. The point of decision was wherever the consumer was. 

Retailers were learning this … some early, others late. Most with a fair amount of pain. And then … the recession. And every single retailer, except Wal-Mart, bled. Some profusely. Others to death. 

Consumers went into hiding. And when they returned – as they return – there are fewer. They have less disposable cash. Less credit. And yet, they still have extremely high expectations. They have even more access to information. They have more options. They have more leverage. 

The best retailers see this. They see the technical, financial and cultural changesthat have arrived them at a place where they no longer have leverage at the point of decision. Retailers do not want to regain point of decision leverage. They need to. It is not a matter of margin. It is a matter of survival.  And as b-to-c relations sort themselves out in this post-recession era, the smartest retailers are looking at strategies that synthesize the best elements of their traditional and information age operations. Some early success strategies involve the deployment of a wider range of next generation retail automation solutions. Think: self service solutions, interactive displays and digital signage or item-level inventory tracking solutions.  The objectives of these investments are many-fold – cost reduction, customer experience enhancement, revenue generation. 

However, retailers managing the most successful implementations are realizing that, perhaps the most powerful ROI lever is how these technologies are enabling the redeployment of a better trained, albeit smaller, cadre of customer-facing associates. With fewer associate rolls, powerful ROI is accruing to retailers who deploy solutions aimed at freeing associates from non-customer-facing tasks such asinventory management, receiving, replenishment, supplier management. The freed time is invested in support, merchandising, selling … the entire customer experience.

The goal is to re-establish more leverage at the point(s) of decision on the retail floor, and perhaps, with exceptional execution, deliver an unforgettable in-store experience that can exert influence on all the ever-expanding point(s)-of-decision diaspora.  Retailers may never be able to exert as much control over the point-of-decision as they did 30 years ago -- even 10 years ago. But with the right technical investments, and sharper retraining and reapplication of their associates, they might have a chance to enhance their influence in the ever-broadening definition of the point-of-decision.

Consumables: Often Overlooked When Times Are Good, Critical When Times Are Bad

VDC recently published its barcode printer consumables supply-side analysis.  This research is attracting more interest among hardware suppliers and their channel partners than in previous years.  Why?  Because AIDC value chain participants are competing like never before to squeeze all the revenue they can from each and every project they undertake.  At the same time, deploying enterprises are looking for opportunities to do more with less.  While these objectives may seem diametrically opposed, they needn’t be…VDC’s most recent study of the barcode printer consumables market has identified some trends that will enable suppliers and prospective buyers to achieve their aspirations by deploying innovative solutions that look remarkably different from than those requested and delivered in the past.

Traditional consumables sourcing considerations have been driven by proximity and price.  Put another way, labels, tickets, tags and ribbons are heavy, and shipping costs have increased markedly in recent years, causing consumables purchase considerations to be driven by price and availability.  These primary purchase considerations, price and availability, have led many in the industry to bequeath the consumables product category with another unpleasant term: commodity.  Who in their right mind would line up to sell and support a commodity?  Where’s the fun in that?  Not to mention the margin?

Everyone familiar with VDC’s research understands that the consumables market opportunity is considerably larger than the market opportunity associated with most AIDC hardware components, but creating a compelling value proposition that justifies investment in branded consumables has proven an arduous task, and one that frankly few hardware suppliers have managed very successfully.

Together, the global recession and environmental concerns are placing increased emphasis and eyeballs on consumables, as a solution component that needs to carefully managed and better supported.  Users are looking for every opportunity to reduce their consumption of barcode printer consumables while deriving incremental operational benefits.  This, in-turn is causing forward thinking suppliers to invest in the development of solutions that provide benefits above and beyond those provided by more traditional offerings.  Seriously?   Does it really make sense to spend precious resources innovating around a solution component suffering from commodity status?  We think so, and our latest research suggests that suppliers are doing just that.  

Cases in point:

• NCR is licensing their dual sided printing technology to thermal printer manufacturers and supplies converters, enabling enterprises to do more with less.  A POS receipt printing solution with the capability to print coupons and advertisements on the reverse side of the slip will more likely resonate with the buyer when the coupons and advertisements are selected based on the CRM profile associated with that buyer, and printed on-demand.  Operational improvement will likely manifest itself in increased coupon utilization, fine tuning the CRM capabilities of deploying customers while enabling these customers to sharply reduce their annual consumption of paper products.
  
• But what about industrial applications?  Zebra Technologies has introduced a new method for shipping departments to save time when printing and applying packing slips. Their Z-Slip packing slip solution consists of a packing slip label with an integrated, peel-and-stick sleeve.  Printing and applying traditional packing slips is a labor-intensive process requiring shipping-department employees to print a slip, fold the slip in half at least twice, slide the slip into the sleeve, remove the liner and stick the sleeve onto the box.  With the all-in-one Z-Slip system, these employees can print, peel, and apply almost simultaneously, saving time-on-task and improving operational efficiency.
  
• Taking a page from the play book of successful inkjet and laser printer manufacturers, Brady Corporation introduced its IP series printers in 2008.  These printers deploy sensing technology that interrogates supplies as they are loaded into the printer, enabling the printer to optimize its performance without a costly, time consuming calibration process that can eat through consumables unnecessarily.  With the IP series, Brady Corporation has a platform for innovation that can pave the way for device management and print management solutions, and ultimately less margin constrained service and software offerings.

So the consumables market is changing.  The days of dumb devices and commodity status consumables are waning, with increased energy being spent where it should be, on providing more value while simultaneously driving down costs and the unnecessary consumption of precious resources.  Based on our most recent research, we encourage enterprises and suppliers alike to rethink their consumables objectives and to invest in smarter solutions.

Consumer redefinition is forcing hospitality operators to adapt.

As hospitality operators continue to struggle through the current recession, an increased focus is being placed on their relationships with their consumers. Each and every interaction/transaction has become absolutely critical to an enterprise’s ability to survive during this challenging time.

Simply stated, hospitality customers are redefining themselves and their lifestyles. The purchasing processes and leisure activities that have been defining characteristics of this community have been drastically altered. In attempts to safeguard themselves, hospitality operators across North America must ensure they develop and deploy the ‘best in breed’ customer service, acquisition and retention strategies.

In order to achieve such a daunting objective, hospitality operators are continuously evaluating and integrating new automation technology capable of engaging their customers on multiple dimensions. One type of automation technology that helping realign the hospitality vertical market is self-service. Self-service solutions, such as interactive kiosks, digital signage, at-table/in-room terminals, and mobile devices, are allowing hospitality organizations to interact with their consumers via new and exciting applications (i.e., mobile ordering, virtual concierge, etc.).   

When evaluating their current self-service strategies, hospitality operators continue to focus the majority of their delivery platforms and applications toward serving their customers. The deployment of self-service solutions allows operators to address their customers in real time, presenting them with the opportunity to improve experiences and entice future interactions/transactions.

These issues and more are explored in depth in VDC’s most recent Transaction Automation publication, Self-Service and Customer Interaction Management Solutions: Vol.2 Hospitality.  

Retailers seek balance between cost reduction strategies and customer service.

Hit hard by the current recession, retailers across North America are continuing to chart their course across the vertical market’s ‘turbulent waters’. At the heart storm remains an overextended and demoralized consumer community and an increasing need for retailers to improve cost management. Although the Consumer Confidence Index continues to indicate monthly improvements since March of this year, retailers and suppliers of self-service solutions remain ‘cautiously optimistic’ regarding the vertical’s immediate future.     

As consumer confidence continues to make a comeback, customer retention and growth strategies are quickly moving their way up the list of objectives for retailers. Across all sub-segments and tiers, retailers find themselves under overwhelming pressure to improve experiences/interactions, while reducing costs. 

Similar to other vertical markets, one way that retailers are attempting to do this is through continued investment and deployment of self-service technologies. Self-service technologies within retail are allowing customers to take complete control of their interaction by leveraging multiple delivery platforms (i.e., interactive kiosks, self-checkout solutions, and personal shopping solutions). Retailers are evaluating and integrating such a diverse set of platforms in order to take advantage of emerging applications such as: assisted shopping, coupon dispensing/validation, loyalty programs and self-service ordering. 
 
The key for retailers during this troubling economic climate is to empower their customers and then tie that to acquisition and retention strategies. That being stated, it is of the utmost importance that retailers do not cut too hard or too deep in to their customer service, specifically self-service, budgets while improving operations via cost reduction strategies. 

Input from retailers has identified ‘enhancement of customer experience’ and ‘retention and growth of customer base’ as the two most import objectives when deploying self-service solutions.  As illustrated below, the same respondents are only partially satisfied with their ability fulfill these objectives with their current self-service strategy. These discrepancies depict potential opportunities for self-service suppliers and channels active within the retail vertical market to enhance their next generation solutions.

These issues and more are explored in depth in VDC’s most recent Transaction Automation publication, Self-Service and Customer Interaction Management Solutions: Vol.1 Retail.