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

The Warehouse of the Future

What are the technologies defining the warehouse of tomorrow?

Warehouses and distribution centers are increasingly playing a critical role in generating supply chain efficiencies across industries like pharmaceuticals, food and beverage, retail, and fashion, leading to companies such as Amazon and DHL to look for new ways to support their growing warehouse operations through solutions such as robotic picking systems and augmented reality. As such material handling, data capture, order fulfillment, and software technologies are evolving to align with organizations’ vision of the warehouse of the future.

Organizations today are facing a growing number of market pressures to optimize their warehouse. Pressures of faster order fulfillment, error costs, lack of space, and increasing labor costs are just some of the major hurdles organizations today have to cross in a fast evolving industry to remain competitive. Consumers’ access to non-traditional retail channels has transformed logistics, perhaps forever. Operations in the warehouse are transitioning from the traditional pallet level and going smaller into individual item level fulfillment and with it pressures of faster fulfillment and order accuracy. The cost of a single error and its negative impact on customer service is so much more elevated in today’s age of e-commerce and omni-channel retailing. If inaccuracy, delays, and other problems occur, it can lead to customer dissatisfaction, which can result in lost profits for the company.

Exhibit: Expanding Labor Force and Warehouse Establishments

The number of private warehouse establishments in the US alone has risen to 16,556 in 2015 and so has the labor force. As costs and competition continue to rise, decision-makers are constantly looking for new ways to reduce their expenses while addressing the changing needs of the consumer and market.

Technologies such as AR and Robotics have evolved immensely over the last decade and are seeing greater success and deployment in recent years. Below we highlight some of the major technologies which will be shaping the warehouse of the future:

• Material Handling Solutions: Warehouses are running out of space fast and require a more productive workforce than ever. Automation systems including ASRS and Order sortation systems are just some of solutions taking on more modular and flexible designs in order to address these growing concerns.
• Data Capture: Real-time visibility will be a key competitive differentiator and with greater deployments of data capture technologies such as imaging solutions for quality checks, barcode scanning, and dimensioning systems for cubing of the items for high density storage and transportation, decision makers can make better informed decisions and manage their resources.
• Wearables: Wearables are slowly gaining mainstream attention. Augmented reality and voice technology are seeing successful trials across warehouses supporting processes in order fulfillment and beyond.
• Robotics & AGV: Driven by a need for greater automation, solutions for palletizing, depalletizing, ASRS, and AGVs are being used to a greater extent today to support warehouse operations around the world. The introduction of individual item picking/packing robots could result in wider adoption in the warehouse space in the future especially as advanced capabilities are brought to market at relatively more affordable price points.

The warehouse of the future will be one that can support the fulfillment needs for multiple channels including brick and mortar, wholesale, home deliveries, and parcel shipments, often simultaneously. Organizations risk falling behind and losing the competitive edge if they do not look to solutions available today that can prepare them for future customer needs and market place.

VDC’s Warehouse of the Future report covers industry trends, market insights (leading applications, drivers, and barriers), and in-depth vendor analysis, and it highlights innovations in solutions across the warehouse and logistics industry.

For more information and insights on this report, please feel free to download the Executive Brief and contact us to learn how to gain access to the full report.

Written by Shahroze Husain and Richa Gupta. For more information, be sure to review our full Warehouse of the Future report or contact us at [email protected]. The author can be contacted directly at [email protected]

New Report: Mobile Barcode Scanners – Shaping the Future of the Data Capture Industry

(VDC recently published a report focused on Mobile Barcode Scanners. The following blog highlights some of our thoughts on this market and its potential.)

The data capture industry is constantly changing. Handheld barcode scanning is no longer restricted to traditional pistol grip form factors or rugged mobile devices as pairing or integrating scanners with consumer devices is increasingly becoming a popular option for organizations’ barcode scanning applications. Capitalizing on growing smartphone adoption in the enterprise space, new and emerging hardware vendors such as Infinite Peripherals & Koamtac and non-traditional ISV participants like Scandit and Manatee Works (now part of Cognex) are challenging AIDC incumbents by bringing data capture technology to a wider audience in new ways.

As retail, logistics, and health care organizations face growing pressures to support vital workforce operations, improve customer experiences and improve productivity, consumer smart device-based solutions such as companion scanners, sleds, and barcode scanning software platforms are being evaluated as viable solutions to replace or be deployed alongside traditional purpose-built devices. The following are short descriptions of mobile scanning form factors that are available in the market.

• Companion scanners: Small form-factor barcode scanners that pair with other devices via Bluetooth/Wi-Fi.
• Sleds: Peripherals that encase and enable consumer-grade smart devices for enterprise- grade scanning.
• Personal Shopping Solutions: Mobile computer solutions that are used by consumers for shopping in store.
• Software platforms: Software development kits that enable consumer-grade smart devices to use their built-in cameras for enterprise-grade barcode scanning

Exhibit: Respondents’ Plans to Replace Purpose-built Scanners with Mobile Scanning Devices

According to results from VDC’s recent survey of mobile scanner end users and evaluators, 63% of organizations are considering replacing their purpose-built scanner investments with mobile scanners for daily operations. Respondents surveyed across retail, logistics, and health care are currently evaluating the option to deploy mobile scanning solutions to support daily operations. Consumer smartphone-based scanning solutions are also gaining consideration in the enterprise space as companies evaluate BYOD policies and alternatives to traditional purpose-built scanners. However, while mobile scanners do make barcode scanning available to a wider audience and broader range of applications, concerns related to initial investments and deployment costs remain.

VDC believes that mobile scanners are just about starting to present growth potential; application development will play a major role in sustaining long-term business development for vendors in the mobile scanning ecosystem, creating apps for enterprise uses cases and extending vendors’ products to wider audiences. Distributors with vertical expertise and a strong application developer network will be key components to success, since vendors must differentiate themselves from competitors and establish strong brand images.

Mobile scanner vendors profiled as part of this report – Amazon.com, Code, Datalogic, Grabba International, Hiku, Honeywell, Infinite Peripherals, Koamtac, Opticon (OptoElectronics Co. Ltd.), Scandit, Socket Mobile, and Zebra Technologies

For more information and insights on this report, please feel free to download the Executive Brief and contact us to learn how to gain access to the full report.

Written by Shahroze Husain and Richa Gupta. For more information, be sure to review our full mobile scanning report- Mobile Barcode Scanners or contact us at [email protected].The author can be contacted directly at [email protected]

NFL Roundup: Zebra Technologies Makes a Big Play in Pro Sports with Embedded Sensors in Jerseys

With the 2015 NFL season underway, coaches, analysts, and fantasy football fans are hungry for the latest and most accurate stats for making vital decisions on and off the field. The NFL looks to have found an answer. Enter Motionworks by Zebra Technologies’ Sports Solutions Division. Created by the company’s Location Solutions group, Motionworks is a radio-frequency identification (RFID) tracking system which aims to bring better accuracy and insight into player performances than ever before. RFID systems have traditionally been used to track and trace items throughout the supply chain to enhance overall operational efficiencies but now the NFL and Zebra are tapping into this technology to create a better Football experience.

 

Image Source: Zebra Technologies

Zebra’s Motionworks system is an Active RFID Real Time Locate System (RTLS) which uses tags and receivers to track the players’ performances. Players have two tags embedded under their shoulder pads, which emit a unique electromagnetic wave frequency in order to differentiate each player on the field. The frequencies are collected by multiple receivers to triangulate each player position and then stored in datahubs. The data is instantly analyzed using an advanced algorithm and presented to users who are able to see player location and on-field performance in real time. NFL and Zebra present the data as Next Gen Stats, which includes performance analytics like player speed profiles, fitness graphs, play by play running routes, and more. Motionworks RFID player tracking system uses multiple unique RFID tags that are processed simultaneously and quickly by the receivers with very little energy and do not require tags to be in the line of sight allowing uninterrupted data collection. The system is used by all 32 NFL teams and is implemented across 31 stadiums, including London’s Wembley stadium, where six teams are set to play during the 2015 season.

Image Source: Zebra Technologies

We would not be surprised to see Zebra extend its reach with the Motionworks solution to other major sports and leagues, with stat-intensive sports such as Soccer and Basketball likely targets. Current alternatives to this solution in the market include Opta and Matrics. Used by Barclays Premier League in England, the World Rugby Cup, the Copa America, and the T20 Cricket league, Opta relies on global collection centers where local experts analyze video footage and information to provide up-to date stats of players and games. Opta’s data is used by some of the biggest media, channels, betting sites, teams and brands. The other big analytics provider is Matrics which is officially used by FIFA. Matrics utilizes three HD cameras to recognize all the players, referees and soccer ball on the field. The system tracks the coordinates of the objects between the three cameras and the data is relayed to the work center where analysts analyze the data and footage. Both Opta and Matrics mainly provide halftime analysis and post-game analysis due to camera based solutions requiring analysts to view video footage first and then recording statistics. In contrast, for Motionworks there is no lag between the data collected from the tags and the stats being broadcast. Looking ahead, Zebra plans to release tags in 2015 that will contain both RFID and Bluetooth communication technology enabling the integration of physiological sensing technologies such as heart monitors with real-time data transmission.

Motionworks differs from these camera-based systems in that it does not require cameras for analysis and its software can be overlayed on video to show real-time stats. This RFID technology brings a new dimension to the game with instant data communication and accuracy. Currently Zebra Technologies offers potential Motionworks clients a number of additional services including implementation and optimization of all hardware, gameday operations and maintenance to ensure 100% system performance, and analytics using its Time-Difference of Arrival algorithm (TDOA) application. This algorithm records the time of arrival of a distinct RFID signal from a player’s tag at separate receivers around the stadium. It then uses the time references of the signals to calculate the location, speed and direction of travel of the player throughout plays in real-time.

VDC believes Zebra Technologies can work with solution partners and sports governing bodies to offer its data collection and analysis platform to a broad range of application environments including:

• Educational Institutions –Provide the Motionworks tracking solutions to schools, colleges and universities to be used by their respective sports teams and to organizations like the National Collegiate Athletic Association. Schools can use Motionworks like the NFL to track player performances in practice and in games and use the data for team and player improvement.   
• Media and Broadcasters –media outlets, print media and sporting magazines can approach Zebra for its analytics platform to gain access to data feed services and widgets.
• Gaming– with betting and the fantasy sports market growing, gaming organizations can use Zebra’s Motionworks analytics platforms to access accurate player stats and live data feed which they can use and integrate into their sites.

In addition, with its expertise in autoID and data capture solutions Zebra has the potential to engage the growing consumer market for fitness wearables and smart watches in the future by developing tracking sensors for athletic apparels and consumer devices such as the Fitbit and Jawbone Up. Consumer devices such as the Fitbit are popularly used for tracking health-related information such as sleep cycles, heart rate and steps travelled. Some models utilize NFC technology to communicate data quickly over to other NFC-enabled devices. NFC technology is a subset of RFID and operates via the same frequency as High Frequency RFID tags and readers. According to a recent interview by Zebra CEO Anders Gustaffson, the company has held discussions with athletic clothing manufacturers about potential partnerships to bring sensing and tracking technologies to their apparel lines. There is an opportunity for the company to partner with manufacturers such as Nike, Adidas, and Under Armor to produce smart clothing and wearables through the development of tracking technology which can measure movements and communicate between smart apparels and devices anywhere without the need for dedicated receivers. In its current iteration, Zebra's Motionworks technology is restricted to usage in a defined space (it requires both receivers and tags to measure movement), which it makes it unsuitable for consumer wearables that can measure movement anywhere and transmit data via Bluetooth and/or NFC. However, VDC believes this market represents a tremendous opportunity for Zebra going forward.

Ultimately, Motionworks looks to be the next big step in sports analytics and Zebra Technologies’ entrance into the sports industry displays the company’s versatility as a data capture solutions provider. The company has already expanded to sports beyond the NFL including Nascar and Soccer and has plans to add more to the mix.

(With Richa Gupta, Senior Analyst)

Can Scandit’s new Proof-of-Delivery (POD) system break through the rugged handheld-dominated logistics and delivery industry?

Zurich based mobile image processing and cloud computing software vendor Scandit recently announced the launch of its new mobile Proof-of-Delivery (POD) System for the logistics and transportation industry such as logistics providers, couriers and postal services. POD apps are designed to track the delivery of products through the delivery chain by scanning barcodes on packages and collecting signatures upon delivery. POD solutions are designed to improve efficiency, reduce paperwork, and eliminate errors.

Designed to enable mobile workers to use consumer grade smartphones and wearables in logistics applications, the POD solution is an all-in-one logistics suite. The system includes Scandit’s proof-of-delivery app, along with its Enterprise Mobility and Data Capture Cloud software. The app which is both Android and iOS compatible, carries features including navigation, geotagging, signature capture, and barcode scanning, supporting both 1D and 2D symbologies.

Scandit is leveraging its barcode scanner SDK and has created an app suite for transportation and logistics (T&L) around it. In addition to its Proof-of-Delivery solution, Scandit also has customizable apps for Shipping & Receiving and Asset Management in its suite of logistics solutions. The customizable apps can be leveraged by the development community to create end-to-end solutions for T&L enterprises that can customize these apps to fit their needs.

 

Image Source: Scandit.com

The image above highlights Scandit’s POD solution architecture. It works through an interconnected system where the customizable POD app, integrated with Scandit’s barcode scanner SDK installed on a smartphone, is connected to Scandit’s Enterprise Mobility and Data Capture Cloud service, which in turn is connected to clients’ current IT infrastructure with existing data sources. Scandit’s POD solution integrates with existing IT infrastructure in place for logistic providers, couriers and postal services and can connect client’s Enterprise Resource Planning, Transportation Management Systems and Warehouse Management Systems to the mobile workforce. It can also be downloaded to corporate devices or by third party contractors, allowing transparency to the full delivery chain to track progress and location in real time. Scandit’s Enterprise Mobility and Data Capture Cloud software offers device management of devices on the field, a built-in analytics dashboard, and additional configuration and management options while deliveries are being made.

Currently, the T&L industry’s primary solution for field operations is rugged devices with major companies such as FedEx, UPS, USPS, and Royal Mail all employing rugged handheld devices for their product tracking and delivery needs. The decision to go with rugged devices such as Zebra’s MC9500 (FedEx) or TC75 (Royal Mail), and the custom Mobile Delivery Device by Honeywell (USPS) is based on these devices’ usage scenarios – for making more than 100 stops per day, and the need to withstand drops, dust, water, and other outdoor conditions. Due to concerns surrounding ruggedness, companies like FedEx have traditionally stayed away from deploying consumer-grade devices for field operations but have considered using consumer grade devices with rugged cases for applications in hubs and stations. Companies in the T&L space carry out refreshes for these solutions every 4-5 years.

Scandit’s new solution may break this traditional mold as its platform uses a device’s built–in camera to capture barcode information from any angle, with high read rates and offering the same level of scanning efficiency as dedicated barcode scanners (or mobile computers with integrated scan engines) while decreasing the overall TCO as compared to dedicated solutions. Adoption rates will depend on acceptance of and investments by major logistic providers and courier services as they evaluate ROI implications.

Innovations in smartphone design and improved ruggedized casing for protecting consumer grade devices in harsh environments will play a role in the adoption of Scandit’s POD solution in the market. Scandit will likely have to wait but the company has already taken a step towards maybe bringing a big change to the T&L industry. As a result, we may soon see such solutions leveraging consumer grade devices being used beyond the hubs and stations of delivery companies in this vertical.

VDC will explore this and other mobile scanning solutions further in an upcoming VDC Report on Mobile Scanning Solutions. Stay tuned!

Revisiting Our Annual Barcode Predictions with One Quarter Remaining in 2013

With three quarters of 2013 already behind us, the VDC AutoID team thought it would be interesting to revisit the 2013 predictions we made at the start of the year. In this blog post we examine our barcode predictions and offer an update as we head into the final stretch of 2013.    

Prediction #1:

More barcode market aggregation ahead – Expect continued consolidation of the barcode hardware landscape, particularly to achieve growth across product categories, verticals and regions.

Update:  It may not even be over but 2013 will be remembered as another year in which we witnessed a large amount of vendor consolidation. The major acquisition of Intermec by Honeywell will likely be the big story of 2013. That transaction's impact and significance dwarfs all other M&A activities announced to date and more than likely any others that may be completed before year’s end.  Somewhat surprising, however, is that our prediction proved true before the Honeywell/Intermec deal closed as at least five acquisitions were announced by the end of May.

M&A announcements of note during the first three quarters in the barcode market include:

• Honeywell completed the acquisition of Intermec after receiving final FTC approval, adding new or augmenting existing solutions in voice, barcode printing, RFID and mobile computing (September).
• OCR Canada acquired Aurora Bar Code Technologies Ltd. in order to increase its presence in Western Canada and expand its enterprise mobile computers, barcode scanner, RFID and wireless network capabilities (May).
• Barcoding Inc bought Miles Technologies Inc. for an undisclosed amount in a move to increase its presence in the central US (May).
• General Data Company, a leading manufacturer and provider of barcode identification, tracking and data management products and solutions sought to expand its healthcare solutions offerings and acquired Triangle Biomedical Sciences Inc. (TBS), a leading manufacturer and supplier of instrumentation, reagents and consumables for the clinical and research pathology market (May).
• Datamax-O’Neil acquired the thermal printer assets of Source Technologies, a leading provider in specialized printing solutions (May).
• Telenor acquired Liquid Barcodes, the largest provider of mobile coupons in Norway, to strengthen its focus on coupons, value codes and loyalty solutions. Along with the company Valuecodes, in which Telenor has a controlling 51% stake, Telenor will become the leading mobile coupon player in Norway and have a strong foundation for further expansion (March).

Prediction #2:

Barcode vendors will learn to “accessorize” – More barcode hardware players will actively look to enter [or further entrench themselves in] the “accessories” market – developing sleds and/or sleeves with barcode scanner,  payment acceptance or other features that support consumer-grade device usage in retail, healthcare and enterprise environments.

Update: Starting with a large number of vendor products announced and on display at NRF, it was clear in January that “accessorizing with AutoID” was central to many product development strategies. Buoyed by the expanding BYOD trend and focus on lowering total cost of ownership (TCO), several vendors such as Griffin Technology and Honeywell have released new sleeves and sleds suited for enterprise, retail and/or healthcare environments.  

Prediction #3

Future with mobility, not without in [barcode label generation software] market – An increasing number of barcode printing software providers will extend label printing support to portable devices (both purpose-built and consumer-grade) – facilitating mobile applications such as field sales, field service and direct store delivery (DSD).

Update: We give ourselves partial credit on this prediction as the products and capabilities to support mobile printing are available, however, end-user usage of mobile print commands managed and sent from consumer devices remains in the nascent stage. At this point in the year, most barcode label generation software and barcode printer vendors have announced support (i.e., drivers, firmware) for leading mobile operating systems such as iOS and Android.  In our 2013 conversations so far, remote print management and mobile device support remain key software development areas. In fact, expect a leading barcode label generation software vendor to announce enhanced mobile device support as part of a major new product launch in early October.

Prediction #4:

Embracing the tech-savvy consumer – Scanning with and displaying barcodes on mobile device screens will continue to grow significantly among consumers. We predict more QSRs (quick service restaurants), convenience stores, restaurants, theme parks/ entertainment venues and other consumer-facing enterprises will invest in and deploy barcode imagers and consumer-grade mobile devices to interact with consumers (e.g., coupon redemption, payment, loyalty/rewards programs).

Update: This prediction was likely going to come true; however, the quick pace of adoption and strategy migration has taken vendors (and us) by surprise. For example, 2D imager adoption remains strong through three quarters with growth outpacing all other barcode product categories, especially in retail sectors. Providing examples of business strategies focused on targeting and serving  consumers armed with smartphones are supermarket chain Giant and Stop and Shop, drugstore chain CVS, and Australia’s eRX to name a few. In addition, according to their Q2 2013 Trend Report, ScanLife processed over 7 million scans in consecutive months for the first time ever, users tend to scan over 3x per month on average (a 22% increase from a year ago) and scanning from tablets has increased by a whopping 1300% from Q2 2012.

Revisiting Our Annual RFID &RTLS Predictions with One Quarter Remaining in 2013

With three quarters of 2013 already behind us, the VDC AutoID team thought it would be interesting to revisit the 2013 predictions we made at the start of the year. In this blog post we examine our RFID &RTLS predictions and offer an update with just three months left.    

Prediction #1:

Vendors – especially RTLS solution providers – will develop the “healthcare stare” – The use of RFID and RTLS is on the rise in healthcare, most notably in the US thanks to the VA’s announced $540M+ contract to track equipment and supplies at 21 of its Veteran Integrated Service Networks (VISNs)…This spark to the market (and sizeable contract) drew a lot of attention in 2012 and we expect the RFID and RTLS frenzy to continue in healthcare in 2013. However, we caution vendors (especially RTLS providers) to not focus solely on healthcare and to seek opportunities and market development in other vertical markets where the competitive field may be less crowded.

Update: This prediction has come true in that healthcare has been the star vertical for AutoID in 2013, but those with a healthcare-centric focus are actively seeking opportunities in other verticals. Successful, high-profile applications for RFID and RTLS in healthcare include asset management, sample tracking, temperature control in sample fridges and hygiene control. While there is strong growth to be realized in healthcare, the sector is challenge with long sales cycles and tight IT budgets. Over the last nine months I have fielded several inquiries about how to target and penetrate this emerging vertical – from both non-RFID/RTLS solution providers and larger consultancies looking for expansion opportunities. Perhaps more interesting is that I have also had a fair number of exchanges with healthcare-centric RFID and RTLS solution providers seeking market opportunities where their products and services may be leveraged outside of healthcare (i.e., industrial, retail enterprises).  

Prediction #2:

Passive UHF EPC item-level tagging (ILT) in the apparel sector will pick up the pace after a somewhat slow 2012 – This past year was a mild disappointment in terms of retailer deployment of RFID for ILT of apparel. For example, no major reader or printer/encoder orders were delivered, several large retailers remain behind originally announced plans (e.g., Wal-Mart, JC Penney) and some newer programs were pushed to or will start in 2013.  So what to expect in the year ahead? Even more American Apparel stores will go live with RFID (a bright spot for 2012 as well), Wal-Mart will reassess its RFID plans but remain committed, Macy’s will make its anticipated move, JC Penney has bigger worries than RFID, international retailer Zara will play a key role in increasing tag volumes and RFID EAS will become a more critical part of the ILT in apparel conversation.

Update: Retail continues to take strides in advancing item level tagging on a global scale. Numerous companies such as Mersmann and Borsheims are using RFID for solutions against theft of high-priced goods. Kohl’s, on the other hand, is implementing a full item level tagging solution that includes non-apparel items. The successes of many pilot programs have proven the value of RFID in retail and new retailers are joining the fray as a result. The number of RFID-enabled stores and annual tag volumes among existing users are rapidly expanding. RFID EAS solutions are under broader investigation this year as tagging techniques and the cost of tagging comes down.      

Prediction #3:

Embedded RFID keeps the forward momentum – At the end of 2011 we noted the rise of “RFID inside,” or embedded RFID, as a key trend to watch for in 2012.  We are keeping it on the list in 2013 after seeing a great deal of progress in 2012. With price points declining and form factors shrinking, we expect to see solutions and applications such as these expand and new innovations to be introduced in 2013.

Update: As the capability and power of RFID expands, RFID tags are producible thinner than paper, so does the ability to embed. Uses have sprung up for video games, clothing personalization, and even fiber composites. In addition, reader chipset shipments to support embedded RFID applications have grown sharply over the last two years, with 2013 volumes for embedded chipsets likely to outpace those for dedicated, finished readers. Reader module vendors such as ThingMagic continue to innovate and develop new solutions such as RFID-enabling consumer devices such as tablets. Embedded RFID seems to be the future of RFID usage.

Prediction #4:

Honeywell Scanning & Mobility will get strategic on RFID – and quickly – after announcing its first RFID product and the acquisition of Intermec in 2012 – After some exploration of RFID while acquiring several barcode scanner and mobile computing companies over the last few years, Honeywell made some eye-catching RFID moves in 2012. They made a subtle move in introducing an RFID reader and then made a major move in announcing the acquisition of Intermec (a major RFID IP holder and RFID equipment manufacturer). We predict Honeywell will aggressively develop its RFID strategy in 2013, becoming a strong competitor in select verticals and applications that play to the combined strengths of Honeywell and Intermec.  What’s next for Honeywell – RTLS in 2013 or 2014?

Update: Although the EU had approved the acquisition in 2012, the progress had been slow moving through much of 2013 due to challenges by the FTC. In mid-September the acquisition was approved after a decision by the FTC around 2D image engine competition. With the elongated inquiry period, Honeywell’s RFID strategy remains to be seen and we may gain some insight before the year ends. VDC will keep a close eye on the process of integrating Intermec, especially Intermec’s RFID business (and IP portfolio). It may be far too soon to look ahead, but if Honeywell’s vision is to become the true, sole total AutoID solutions provider, then they would need to think about adding RTLS to the mix in my opinion. I am sure, however, that Honeywell is much more focused on making Intermec part of their operations and determining their strategies for new-to-them solutions like thermal barcode printing before they would consider pursuing another new technology such as RTLS.

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.)

What makes a smart city smart? It must be AutoID.

What makes a smart city smart?  That is a key question as our team researches smart cities and how AutoID technologies are enabling them. Although the term smart city means different things to different people and is used inconsistently to define various projects, I believe RFID, RTLS, contactless and NFC are critical elements of the smart city of tomorrow. The formal definition of a smart city generally includes variations of the following elements: a smart economy; smart mobility; smart environment; smart living; smart governance and smart technology. Enter RFID, RTLS, contactless and NFC technologies. In small towns and major cities throughout the world, these AutoID solutions are already being used to support a host of applications, including:

• Internet of Things
• Bike rentals
• Citizen ID
• Customer loyalty
• Electronic Vehicle Registration (EVR)
• Energy (e.g., smart meters)
• Library management
• Public transport (e.g., contactless ticketing, mobile payment)
• Risk prevention (e.g., public works, nuclear energy)
• Urban planning (e.g., smart building, intelligent traffic)
• Vehicle fleet
• Waste management

The concept of the smart city is increasingly being adopted by both cities (municipalities/localities) and enterprises,reflecting the growing importance of information and communication technologies
(in addition to social and environmental factors) in defining the competitiveness of cities and improving the quality of life of individual citizens through the management of natural resources and responsible participatory governments.

Not surprisingly, smart cities are notbuilt in day. They take time, money, awareness and most often government involvement (e.g., funding, mandates, recommendations, program development) to
build the foundation and then scale. As a result, municipalities/localities must think big (a vision for a smart city) but start small (one project/deployment/application at a time). Albeit slowly, smart cities are emerging with RFID, NFC, RTLS, and contactless payment, ticketing and ID technologies often part of the “construction.” According to one local official with whom I recently spoke under NDA, “The value propositions and benefits of RFID [and increasingly NFC] will be found around every corner – literally – and the application possibilities are limitless.”

Major RFID and contactless industry conferences are also recognizing the importance of RFID, NFC and related technologies to the development of a smart city. For example, in October, The 4^th Annual International RFID Congress event will be dedicated to applications RFID/NFC for a smart city and habitat. 

Smart cities will leverage many technologies, but most of them can be grouped into
five main categories:

• Authentication (RFID, NFC, mobile payment, etc.)
• Cloud Computing (remote back-up, wireless communication, etc.)
• Control (monitored data analyzed in real time to drive actions, alerts, controls)
• Monitoring (sensors, RTLS, RFID, etc.)
• Sensing (RFID, wireless sensor networks, video, biometrics, etc.)

As part of our 2013 research programs, the AutoID & Data Capture team will study the use of RFID, NFC and related technologies by municipalities/localities and determine how these solutions fit into the concept and vision of a smart city. Stay tuned for more on this topic and the impact of AutoID in creating these cities of the future.

NRF 2013: The Big Show Day 2 in Review

The VDC AutoID team’s second day at NRF was just as busy as the first, and was packed with vendor meetings, new product briefings and walking the show floor. Since our previous post focused on broader trends and observations gleaned from NRF 2013, this blog is dedicated to sharing some of the key vendor announcements and product introductions made during the event:

• NCR and PayPal announced a partnership whereby NCR will leverage PayPal’s leading cloud-based payment technology to augment the functionality of its mobile solutions targeted at hospitality enterprises, particularly restaurant/dining operators. Initially, NCR will integrate PayPal with its NCR Mobile Pay and NCR Aloha Online Ordering applications, giving customers an alternative to using credit/debit cards via enabling smartphone-based online (i.e., PayPal) payment. Besides the convenience and security benefits, PayPal will also bring social commerce features to the apps, including online check-in and reviews. Eventually, NCR also plans to integrate PayPal into its Convenience-Go (C-Go) and Endless Aisle applications. The NCR-PayPal partnership demonstrates NCR’s commitment to “making everyday transactions easier” for the consumer and merchant as well as PayPal’s leadership in the digital payment ecosystem.
• Zebra announced a new line of mobile receipt printers targeted at retailers and other B2C merchants that increasingly leverage consumer grade i-Devices (i.e., iPhone, iPad and iPod touch) as mPOS platforms. The new iMZ220 and iMZ320 are designed for easy integration with mPOS devices (including consumer grade offerings, such as those from Apple) and are among the first Link-OS-enabled products the Company plans to launch during 2013. Link-OS is a new operating system designed for use with Zebra devices which includes a SDK and core software applications that the company believes will make its hardware easier to integrate, manage and maintain from any location.
• HP debuted several new retail-focused POS products that address merchants’ increasingly strong interest in sleek, aesthetically-pleasing stationary terminals and rapidly growing demand for tablet-based mPOS solutions. For retailers seeking a more attractive alternative to clunky, traditional stationary POS terminals, HP introduced its RP7 and RP3 Retail Systems, both of which combine a sleek, modern appearance with the robust connectivity and build quality retail and hospitality operators require. HP also showed its new ElitePad along with a line of peripherals designed specifically for use with the tablet.

As usual, NRF delivered again in 2013 with many great exhibitors, vendor briefings and new product announcements. We look forward to attending next year’s edition, but until then, stay tuned to this blog for more AutoID-related news and opinions. Also be sure to listen to our upcoming NRF Quickcast, in which we will further discuss key takeaways from this year’s Big Show.

NRF 2013: The Big Show Day 1 Recap

The VDC AutoID team attended this year’s NRF in full force. With vendors representing all of the core AutoID markets, including MCET, RFID and Barcode, there were many new and innovative retail-targeted products to see relevant to each of the practice’s coverage areas. The following are a few broader observations from day 1 in the Big Apple:

• Hardware is becoming increasingly less important, and more vendors realize it. Conversely, software, and, more importantly, the functionality it enables, is the critical issue for retailers. Some hardware and solution vendors have been aware of this dynamic for some time now. Others, we think, have only recently awakened to this reality. This is more often (but not always) true in the case of large-scale, enterprise-focused vendors of retail automation and customer engagement solutions that have historically pursued differentiation via hardware ruggedness, lifecycle, and so forth rather than ease-of-use, intuitive functionality and application innovation. During conversations throughout the show, it was evident that several large-scale, traditionally hardware-focused vendors have pivoted to a broader focused strategy—one that seeks to differentiate on innovative software and functionality in addition to hardware.
• Traditional POS terminal refreshes contribute to mPOS growth. The common strategic drivers behind the recent explosion in retailers’ mPOS investment are well documented, and include improved labor utilization and efficiency, better customer service and employee empowerment. However, during our time at NRF 2013, we validated another, more pragmatic factor playing a role in mPOS’ rapid growth: stationary POS terminal refreshes. As merchants update traditional POS systems, vendors indicated that mobile terminals are usually included in their next-generation solution evaluation process. The stationary vs. mobile conversation is different for every retailer, and depends on variables including store format, sub-vertical and strategic/operational objectives, but increasingly the final solution is comprised at least in part by mPOS. While we expect this trend to continue throughout 2013 and well into the future, at the same time we believe stationary POS will remain relevant for many types of retailers as well. 
• The m.Wallet war rages on with no end in sight: The struggle to establish broader adoption in the m.Wallet and contactless payment ecosystem is as highly contested as ever, both in the context of which stakeholder(s) own the m.Wallet (a single retailer, a multi-retailer consortium, the MNOs, etc.) and in regards to enabling technology (mobile barcode, NFC, cloud-based). At this point in time, there is no certainty as to which of these entities and enabling technologies will be successful in the long term. Valid arguments exist both for and against these prospective m.Wallet owners as well as each enabling technology, and all were represented on the NRF show floor. Ultimately, consumers have the final say as to which stakeholders and enabling technologies win. Without consumers’ approval—i.e., their adoption and ongoing use—no m.Wallet or contactless payment technology will be successful in the long term. 

That concludes our recap from the first day at NRF. Stay tuned to this blog for another post highlighting some of the key vendor announcements and observations from day two.