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

A Preview of our Handheld Barcode Scanner Report

It is almost as if the Handheld Barcode Scanner Market is reinventing itself. Laser technology is rapidly losing share. As a percentage of overall revenues, laser scanners went from accounting for over 40% of overall revenues in 2011 to 35% in 2012 – a direct contrast to the 2D imager product category. The wide range of options available for these camera-based imaging solutions means no vendor has their customer-base locked in. Coupled with tough economic conditions to operate in, this development has vendors struggling to retain their existing accounts.

And then there is the very real threat of consumer devices being used in lieu of dedicated scanning devices. A growing number of enterprises today are considering, if not already undertaking, integration of consumer devices into their enterprise operations. With significant advancements in mobile technology, consumer handhelds are penetrating deeper into the enterprise, particularly in retail, passenger transportation and health care services. These devices are deployed in conjunction with purpose-built data and image capture solutions for now. Expect this to change as the developer community builds enterprise-worthy barcode scanning applications. Vendors and their solutions partners have to focus on application development to capitalize on market growth opportunities – and stave off the shift from purpose-built scanning solutions to multi-functional mobile devices.

To learn more about this forthcoming research report, click here.

DC Velocity Talks Item-Level RFID and Distribution Centers with VDC’s Mike Liard

More and more companies are turning to item-level RFID tagging to boost inventory accuracy throughout the supply chain. So, DC VELOCITY magazine asks: How will this affect distribution centers? To find out, Susan Lacefield, Associate Managing Editor of the publication, sought insights from industry experts.

To support an article published on May 14^th, Susan conducted interviews with me and others such as Avery Dennison’s Mark Hill and Intermec’s Kurt Mensch and Bruce Stubbs to discuss the progression of RFID at the item-level and the technology’s impact on distribution centers. She produced an excellent piece for DC VELOCITY and her interest in the topic was evident when we spoke.

In fact, Susan wanted to provide DC VELOCITY’s readership and audience with a deeper analysis of the subject, so she asked me to participate in a webcast to discuss how DCs can take advantage of RFID. Susan moderated a webcast on June 27^th, asking me a series of questions focused on item-level tagging and the current and future role of RFID in distribution center operations.  We had approximately 50 people attend the 45-minute webcast, with many attendees submitting questions that I was able to address at the end.

I would like to personally thank Susan Lacefield and DC VELOCITY for asking me to participate in the article and webcast.  I believe that as RFID adoption at the item level increases within the retail sector, it is critical to provide more education and awareness of the technology’s influence on supply chain and distribution center operations. Based on her great article and our webcast, I think Susan agrees.   

The RFID Application Invasion Marches On

The potential uses of RFID are limitless. As prices of RFID tags and readers decrease, some RFID applications continue to strengthen this view of boundlessness. Perusing through articles of recent RFID deployments, three stood out for their creativity: Taipei’s use of RFID to rid the streets of manhole covers; Fleye’s use of RFID to capture extreme sports video footage; and Friedrich Dick’s Knifeinspector solution to track and manage knives and other meat cutting equipment while enabling worker accountability and compliance with hygienic standards.

RFID Has Got You Covered

Motorized scooters are a widely used means of transportation in Taipei, Taiwan. In order to protect the riders of motorized scooters, other vehicles and bicycles, Taipei has undergone a massive project to replace all metal manhole covers with driver-friendly concrete slabs. A key component to this project is the ability to locate the concrete slabs when access is needed. To solve this problem Taipei looked to RFID. Using passive Ultra High Frequency (UHF) RFID tags and handheld readers, Taipei has devised a plan to be able to find these slabs when needed and protect the safety of the public.  So far, approximately 35,000 of Taipei's 175,000 manholes now have buried RFID-enabled covers.  The major challenge from a performance perspective has been the weather whereas reading tags on rainy days, when the road surface is wet, has proven difficult. As a result, workers typically do so only on dry days. While much progress has been made since 2009 when the program formally launched, we expect the road ahead for nation-wide deployment of this solution will be long (pun intended)

RFID Puts Sports in Motion

Many ski resorts, and action sports facilities, have mechanisms to take pictures of guests mid activity. Cam Miner, founder of Fleye, was not satisfied with simple still images. Miner established Fleye in order to provide action sports athletes the ability to view footage of their performances. In order to accomplish such a difficult task Miner looked to RFID. Using RFID-enabled wristbands for athletes (the type of RFID used depends on the necessary read range for the sport) the participants can tap wristbands on conveniently located readers to trigger motion activated cameras to begin filming. The footage is then sent, via Wi-Fi or Ethernet connectivity, to Fleye’s database and then is uploaded to Fleye’s website where users can view footage of themselves. Sports are not the only target of this solution as amusement parks, concerts and other participatory events are being targeted.  In a connected world supported by the rise social media and networking, RFID is gaining traction.  Additionally, Fleye is attempting to develop relationships with potential content sponsors, such as energy drink and automotive companies, camera equipment providers or other firms whose brand could be advertised using the video solution.

RFID Cuts through Knife Hygiene and Asset Visibility Issues for Meat Processors  

Many professional kitchens and processing plants have hundreds of knives and dozens of employees. The high throughput of the kitchen area leads to a high possibility of cross-contamination, a potentially life-threatening problem. In addition, the knives and cutting devices must be frequently replaced and sharpened daily. German cutlery manufacturer Friedrich Dick developed a solution, known as Knifeinspector, to solve the hygienic concern as well as asset and process management challenge.  Knifeinspector, using passive RFID, assigns each employee to a knife. Each time an employee enters a new area they must scan their knife to readers: the employee is only allowed into the area if the knife is registered clean in the system. The system is scalable and can support multiple applications and value propositions. Dick is integrating RFID tags in a wide range of the company's meat-processing products, including boning knives, sharpening steels, sharpening devices, chain-mail gloves and knife baskets. The system has yet to be fully deployed, but the installation has begun at a large meat processing plant in Germany. 

(A special thank you to Nicholas Reposa for his significant contributions to this posting. Mr. Reposa is currently a Researcher in VDC’s AutoID & Data Capture practice.)

What You See is Just Not What You Eat Anymore

China has evolved into one of the leading barcode technology deploying nations from Asia-Pacific over the past 2-3 years. That being said, however, vendors have consistently struggled to get their products to the Chinese mass market. This is due to a combination of factors including users’ preference for local suppliers and extreme price competition. The economic boom that the country has seen over the past two decades has propelled it to global superpower status, one that it evidently wants to protect.

China’s beleaguered food and dairy industries continue to be inundated with scandals. Where it was tainted milk powder five years ago, there is rat meat being sold as lamb today. The Chinese middle class, along with the large population of expatriates in the country, is sourcing their food internationally. The government seems to have finally taken notice. They recently announced a voluntary, barcode and RFID-based program that would help ensure the quality, authenticity and safety of fresh produce and meat moving from source to consumption. While this is a good beginning, an enforceable mandate would provide a true jump start.

There is an immediate need to “clean up” the supply chain to build back trust in domestic brands; and AutoID technologies can help them achieve this end. From the barcode vendor perspective, this potentially means a sizeable, near-term opportunity to help users maintain adherence to safety and quality standards regulations with the right solution investments. For local organizations, it should probably not stop here. For example, China is the largest smartphone market in the world. As a result, placing QR codes on meat, fresh produce and dairy packaging would only help home-grown food industry participants generate confidence in their consumer base and elevate brands’ interaction levels with them.

We talked about the European horsemeat scandal a few months ago on our blog. This Chinese debacle is, in our minds, not very different. The importance of traceability for the foods that we consume cannot be stressed enough. An emphasis on digitizing the product identification and authentication process can only serve to enhance supply chain visibility and help consumers make an intelligent purchasing decision. Here’s hoping.

The Power of Datalogic's Magellan 9800i - Now Available

This past week, Datalogic announced the availability of the much anticipated Magellan 9800i scanner-scale. Boasting the title of the world’s first full digital imaging multi-plane retail checkout solution, the Magellan 9800i provides several value upgrades over traditional laser based checkout systems. The two primary value propositions of the Magellan 9800i are: enhanced customer data acquisition capability and improved scan capacity. Both of these advantages stem from the use of image-based scanning.

In retail, two keys to success are speed of checkout and customer engagement: the Magellan 9800i provides both. Using multi-plane camera based scanners the Magellan 9800i boosts performance by easier reading of barcodes. Because of the multi-plane capacity, this scanner minimizes the need to reorient items and minimizes no-reads. Also, an optional feature, the top-down reader is able to scan codes on the top and leading edge of products. These will expedite retail traffic tremendously.

Customer data acquisition and engagement is just as important. The Magellan 9800i stimulates this with its camera-based scanning capabilities. With an increasing number of coupons and barcodes being found on mobile phones, it is important to have a technology that can handle said technologies. The product interface allows customers to swiftly and effortlessly self-scan codes from smart devices, ordinary coupons, and loyalty cards. Soon, retailers will need a device with such functionality: the 9800i eliminates the need to buy handheld barcode scanning devices to supplement fixed-position scanners at the checkout.

Full digital imaging checkout solutions stand to change the way high throughput retailers do business. Although price is only speculative at this juncture, it is safe to predict that, for the time being, these technologies will be more expensive than traditional, bioptic laser-based solutions. VDC, despite the price, views the enhanced value propositions of the Magellan 9800i as a worthwhile investment consideration for large tier 1 retailers at this time.

(A special thank you to Nicholas Reposa for his significant contributions to this posting. Mr. Reposa is currently a Researcher in VDC’s AutoID & Data Capture practice.)

The Magic of Macy’s Omni-Channel Retailing Strategy Becoming More Potent with RFID

In the world we live in today, having options is everything. When someone mulls over a purchase, two common considerations are: when do I need this by and where can I get it? In this day and age, if the answer to the former is “not for some time,” then online research or purchases are common.  If, however, the answer is “as soon as possible” or “tomorrow,” brick-and-mortar stores are still the choice. Either answer prompts the significant follow up question, “where can I make my purchase?” Research, typically online or in a catalog, occurs until the informed consumer finds the product he or she wants.

So, what if the consumer needs her product immediately and recognizes the product is on a retailer’s website and she heads to the store only to discover it to be out-of-stock? Is there an in-store kiosk available from which a shopper can order the product from another store and have it deliver to her local store or doorstep? In addition, consumers are increasingly “buying with a click” or simply buying on a whim; therefore, retailers need a strong online and mobile presence to service these consumers, especially in today’s connected world. By not having inventory available in store or affording customers alternative purchasing option, a retailer may not only miss out on a sale, but may also endanger that customer’s loyalty or brand perception.

How are retailers able to avoid lost sales, disappointed customers or diminished loyalty? The answer is omni-channel retailing. Omni-channel retail is a concept of interconnectedness. A retailer needs to combine all the heterogeneous parts of the supply chain, into one smooth, completely connected framework.  Put another way, omni-channel retailing means connected customers can shop for and purchase the same items across many channels.

Many retailers have embraced omni-channel retailing and its advantages, but unlike most other retailers, Macy’s has a not-so-secret weapon in RFID technology which affords more accurate, real-time inventory visibility. As highlighted during its recent investor meeting, Macy’s is enhancing its omni-channel retail strategy by broadening its overall RFID strategy. While the technology is already deployed in US stores (select apparel items and display shoes are tagged), the company is expanding store-based fulfillment to 500 locations and working with 50% of its suppliers to stock RFID-tagged goods for improved inventory counts.

RFID tagging has been so successful that Macy’s CEO Terry Lundgren expects it to reduce the need for distribution centers whereas stores will serve as distribution centers and closest-to-the-customer fulfillment locations.  RFID will play an essential role in achieving the vision of omni-channel retail by ensuring that merchandise is replenished in a timely manner and regular automated cycle counts on inventory are enabled. VDC believes item-level RFID will continue to elevate and evolve the omni-channel retail concept and the technology will play a transformational role in the omni-channel retailing experience.

(A special thank you to Nicholas Reposa for his significant contributions to this posting. Mr. Reposa is currently a Researcher in VDC’s AutoID & Data Capture practice.)

Is this the end of barcode labels as we know it?

The barcode label printer market is fairly mature. Purpose-built barcode printers are largely based on the relatively lower cost thermal technology. Laser, inkjet and dot-matrix (impact) printers are all, however, part of the market equation to a certain degree. Regardless of the underlying print technology, one aspect of barcode label printing that has not changed much in the mass market adoption of barcode labels is the look itself. A significant majority of labels in circulation today – on products, packages and other assets – are black-and-white. This has, in some ways, limited the features and functionalities of barcode printers. Let’s take a look at a couple of ways in which vendors are bringing in a new age of barcode labeling. On one hand there are other color barcode labels and on the other, no labels at all.

To print color labels, for example, users have had to either buy pre-printed color stock or make investments in inkjet printers because of a lack of options on the thermal side. Thermal barcode printer vendors typically refrain from allocating R&D dollars toward color printing because it is highly cost prohibitive. Over the past several months, GHS labeling compliance regulations have opened up the use of color thermal barcode printers in chemical manufacturing environments. Their use, though, is restricted to niche applications today, primarily as a result of high costs.

Digital watermarking, the process of embedding information into printed materials that can be “viewed” using camera-based solutions, is making waves in the media and publishing industry. The value propositions offered by watermarks (also known as invisible barcodes) are well-suited to support critical authentication, product information and traceability initiatives. These are a viable alternative to QR codes on marketing collateral and product packaging. Here’s the big question, however.

Can on-demand color barcode label printing use grow beyond these highly specific functions? Can digital watermarks ever replace the conventional barcode label format for tagging and asset identification? Can this be the beginning of the end of barcode labels as we know it? Well, the answer is just not so black-and-white anymore.

VDC's AutoID & Data Capture Practice's Summer Intern Gets Enamored by RFID

As my academic year was coming to close at Boston College this spring, I began to look for a summer internship focused on technology market research and consulting. After noticing a posting by VDC Research that had these keywords, I eagerly applied.  Eager to impress in my interview with the VP of AutoID & Data Capture, I ventured towards Wikipedia to help me understand what AIDC meant and what I was getting myself into. I was instantly overwhelmed by all the acronyms appearing on the page: I thought, what are RFID, RTLS, NFC, 2D, etc.?  So, I read and prepared for the interview. I secured the internship and was eager to start.

I headed into my first day thinking about all of the technologies to which I would be exposed. After all, AutoID & Data Capture encompasses many disparate technologies.  I received a crash course in AutoID from the practice’s VP. But, after the first day, I was immediately intrigued by RFID. I went home to my roommates that night and explained to them how their EZ-Passes and Charlie Cards worked. I felt enlightened understanding this technology and the applications it enables – many of which I’ve taken for granted for so long in my day-to-day life.

Having worked for VDC for nearly a month now, I’m enamored by the world of RFID. The numerous, often innovative applications of RFID, ranging from enabling automatic filming of action sports, to enabling self-serve beer and wine taps, and even the creation of “Real World Mario Kart”, make RFID technology compelling. Now I find myself going on Facebook just so that I can post cool articles about RFID on my friends’ walls. A multitude of exciting uses, combined with the cost saving benefits and value propositions RFID offers to many industries, will keep me intrigued by RFID for some time.   

(This blog post was written by Nicholas Reposa. He is currently a Researcher in VDC’s AutoID & Data Capture practice.)