Retail & Transaction Automation Equipment - Market Update and 2010 Outlook

Retail & Transaction Automation Equipment -

Market Update and 2010 OutlookMarket Update and 2010 Outlook

Chris RezendesExecutive Vice President

Recording Available

These slides are from a webcast presented on 01/19/10. p

A full audio recording is available for download at:

http://www.vdcresearch.com/market_research/autoid/freeresearch.aspx#

VDC Research

Complimentary insights & marketing data on the retail and transaction automation technology markets is available at:automation technology markets is available at:

www.vdcresearch.com

2 – 2009 VDC Research Group, Inc.Auto ID & Transaction Automation Practice

Today’s Speakers

• Chris Rezendes, Executive Vice President, Chris has 19 years experience in embedded, industrial, defense and other mission

critical and high available technology industries

He has more than 14 years experience in senior management and leadership positions at a number of IT systems and professional services organizations

During that time Chris has initiated or expanded coverage of a number of markets that VDC covers today

Ch i h d i d f h l d d h l i Chris has advised many of the largest and most respected technology companies in a number of technology segments worldwide

Chris is a graduate of Harvard University

3 – 2009 VDC Research Group, Inc.Auto ID & Transaction Automation Practice

Some retailers finally starting to see the light at the end of the tunnel … some …

• 2009 was a historically difficult year for the b-to-c business operatorsy y p

The consumer collapsed from exhaustion: lack of employment, cash and credit

Numerous closures, large scale layoffs and bankruptcy fillings

IT budgets seized were slashed and/or became highly scrutinizedIT budgets seized, were slashed and/or became highly scrutinized

• Technology suppliers to these businesses experienced a serious contractions in Q1/ Q2, flat Q2, positive Q4 – with very cautious/ neutral outlook for Q1 2010

• However budgets associated with retail automation technologies do exist for• However, budgets associated with retail automation technologies do exist for solutions that exhibit:

Proven technical performance

Demonstrated operational impactDemonstrated operational impact

Rapid ROI

• Specialty and SMB retail appears to be a bit healthier, if still challenged

4 – 2009 VDC Research Group, Inc.Auto ID & Transaction Automation Practice

Much of the growth will be in a ‘new’ retail

• Retail as we knew it no longer exists. Consumers are more powerful than ever g pbefore, forcing retailers to realign with a consistently changing customer base and ever expanding retail landscape

• The ‘Henry Ford Century’ – when modern consumer economies were defined –is over the recession and a few other demographic trends saw to thatis over … the recession, and a few other demographic trends saw to that

• The New Consumers require more accurate information, in real time. They want to know what their options were. They have questions about how much customization was available to them. They demand alternative payment terms and delivery options. Consumers have learned a lot on the web. And they come into stores armed, and for the wrong retailer, dangerous. For retailers prepared for this, these informed consumers have become better customers.

• We need strategies tactics and technologies to meet consumers where they are• We need strategies, tactics and technologies to meet consumers where they are, and where they are going, in the post-Ford century/ post-recession economy

5 – 2009 VDC Research Group, Inc.Auto ID & Transaction Automation Practice

De-leveraged point of decision, purchase, service

Point of Service:Delivery

Point ofDecision

Point of Service:

Selection

Point of Sale

Decision/ Service and Sale Merging Functionally

6 – 2009 VDC Research Group, Inc.Auto ID & Transaction Automation Practice

g g y

Fragmenting Physically

Fragmented points of decision, purchase, service

Point of Service:

S l ti

3rd Site

Selection

And it is fragmenting further … outside the facility: Mobile Marketing and Mobile Commerce

Auto

Home

g

Point of Service:Delivery

Point of Sale

Street

7 – 2009 VDC Research Group, Inc.Auto ID & Transaction Automation Practice

Delivery Point ofDecision

What are the tactical implications for retailers?

• In a word it means the aggressive pursuit of balance in those• In a word, it means the aggressive pursuit of balance in those strategies and tactics that influence the point of decision experience

Inventory management/ cost reduction OR out of stock mitigation?

Enhanced digital OR in-store experiences?

Bolder promotions OR more authentic customer experiences?

Value-based position OR premium branding?p p g

Enhanced training in customer management OR merchandising?

8 – 2009 VDC Research Group, Inc.Auto ID & Transaction Automation Practice

What are the tactical implications for retailers?

• In a word it means the aggressive pursuit of balance in those• In a word, it means the aggressive pursuit of balance in those strategies and tactics that influence the point of decision experience

Inventory management/ cost reduction AND out of stock mitigation?

Enhanced digital AND in-store experiences?

Bolder promotions AND more authentic customer experiences?

Value based position AND premium offering? Value-based position AND premium offering?

Enhanced training in customer management AND merchandising?

9 – 2009 VDC Research Group, Inc.Auto ID & Transaction Automation Practice

It is not just about data at the point of decision

• It is about the TARGETED data points ... p

• Tied to the RIGHT analytics …

• Distributed at the PRECISE time …

• To a SPECIFIC resource …

• Supporting KEY customer moments …

10 – 2009 VDC Research Group, Inc.Auto ID & Transaction Automation Practice

Traditional retail becomes new retail

• The economic pressures felt in 2008 and 2009 have set in motion a shift from p“traditional retail” to “new retail”

Investments that occur will be focused on replacement or upgrading legacy solutions in order to streamline infrastructure with lower-cost, more flexible solutions

Purchasing preferences will continue to migrate toward a ‘managed service’ or extended warranty approach – safeguarding installations and bottom lines

Solutions will be required to manage a diversity of interactions (i.e., application sets) with multiple stakeholders communities (i.e., consumers, employees, partners)

• Financially stable retailers are being given a unique opportunity to leverage the current economic climate to catch-up with or establish ‘new’ industry standards for sourcing and installation of automation technology

11 – 2009 VDC Research Group, Inc.Auto ID & Transaction Automation Practice

The ‘bright lights’ in new retail solution demand

• Retailer’s across the globe continue to report that there are several ‘bright lights’ within retail’s gloomy landscape: Self-Service

• Self-Service Kiosks• Self-Checkout Solutions

Multi-Channel Marketing • Mobility• IDDS • E-Commerce

Operations Enhancement • Analytics• Inventory Management

Tier II & IIITier II & III

• As the market continues to stabilize, conservative frameworks regarding investment decisions will resonate and be implemented by leading retailers

12 – 2009 VDC Research Group, Inc.Auto ID & Transaction Automation Practice

This will translate into slower growth for traditional solutions

950

Estimated Global Shipments of POS Receipt Printers

850

Dolla

rs

650

750

Mill

ions

of D

5502006 2007 2008 2009 2010 2011 2012

13 – 2009 VDC Research Group, Inc.Auto ID & Transaction Automation Practice

More rapid growth for other solutions …

600

Total Self-Service Kiosk Spend of North AmericanBased Retail Organizations

500

Dolla

rs

300

400

Mill

ions

of D

2002008 2009 2010 2011 2012 2013

14 – 2009 VDC Research Group, Inc.Auto ID & Transaction Automation Practice

And the BHG (big hairy goal)?

• Individual relationships anywhere remember the conceptIndividual relationships anywhere… remember the concept of one-to-one enterprise that was such a critical component of our web strategies? Take that, expand it, apply it to the physical world. Automate it.Automate it.

Appropriate integration of existing databases … POS, CRM, inventory control, promotions, customer service … you have some data, what can you do with it?

Mobilization not just on your devices but your suppliers and your customers Mobilization … not just on your devices, but, your suppliers … and your customers.

Unit serialization for inventory (check) … customer serialization for loyalty programs … how about transaction serialization for key interactions, not just purchases … pu c ases

15 – 2009 VDC Research Group, Inc.Auto ID & Transaction Automation Practice

Retail/ Transaction Automation Equipment Planning Service

• Three TracksTrack 1: Technology Market Analysis Volumes Volume 1: POS Terminals/Workstations Volume 2: POS Receipt Printers Volume 3: Payment/Transaction Terminals Volume 4: Imaging Solutions Volume 5: Self-Checkout Solutions Volume 6: Kiosks Volume 7: Personal Shopping Systems Volume 8: Electronic Shelf Labels (ESL) Volume 9: Interactive Displays and Digital Signage

Track 2: Vertical Market Analysis Volumes Volume 10: Retail Volume 11: Hospitality

Track 3: Distribution Channel Analysis VolumeTrack 3: Distribution Channel Analysis Volume Volume 12: Distribution Analysis

• Service Architecture Technology Supply-Side Reports (Track 1) or Vertical Market Reports (Track 2)

Q t l B ll ti (i l d d ith h f t l t f ll T k)

16 – 2009 VDC Research Group, Inc.Auto ID & Transaction Automation Practice

Quarterly Bulletin (included with purchase of at least one full Track) Customized Executive Summary (included with purchase of entire Service) Real-time Analyst Access

Primary research and market model highlights

Target Communities Approximate Sample Target Communities pp pSize

Phone Interviews Retail automation equipment suppliers N = 100

Web-based Interviews

End users, retailers, VARs/integrators, distributors N > 500

Study Publication DateActual Market Size/Supplier

ShareForecast Market Size

Service Year 2010 2009 2010-2014

17 – 2009 VDC Research Group, Inc.Auto ID & Transaction Automation Practice

Founding Sponsor Benefits and Schedule

• Service Schedule: Founding Sponsor enrollment: through January 29, 2010 Deliverables begin with Q1 Bulletin, with major reports: April thru September 2010 Planning discussions with early subscribers: through February 2010 Monthly status reports: begin January 2010 Interim findings by volume one month prior to publication of each final report volume

• Founding sponsors receive the following benefits: Opportunity to provide input on the study architecture, scope, direction Monthly updates and real-time qualitative findings of interest at each major milestone

throughout the execution phase of the study Discounts from standard post publication prices Discounts from standard post-publication prices Executive presentation that walks your team through the research sponsored

18 – 2009 VDC Research Group, Inc.Auto ID & Transaction Automation Practice

Q&A Session

Thank You for Attending this VDC Webinar

For more information about VDC Research coverage of the global markets for retail and transaction automation technologies – including the 2010 Retail Automation Market Intelligence Service please contact:Retail Automation Market Intelligence Service – please contact:

Tom WimmerDirector, Auto ID and Transaction Automation Technologies Practicet i @ d h | 630 279 [email protected] | 630-279-7959

Peter Doran Account Executived @ d h | 508 653 9000 t [email protected] | 508-653-9000 ext.139

Chris RezendesExecutive Vice Presidentj @ d h | 508 653 9000 t 120

19 – 2009 VDC Research Group, Inc.Auto ID & Transaction Automation Practice

[email protected] | 508-653-9000 ext.120