These slides were originally presented in a VDC Research Group Webcast on 1/19/2010. In this webcast, Chris Rezendes, EVP of VDC Research Group discusses the opportunities – and challenges – facing retail & transaction automation equipment providers in 2010.

1. Retail & Transaction Automation Equipment -
Market Update and 2010 Outlook
Chris Rezendes
Executive Vice President

2. Recording Available
These slides are from a webcast presented on 01/19/10.
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A full audio recording is available for download at:
http://www.vdcresearch.com/market_research/
autoid/freeresearch.aspx#

3. VDC Research
Complimentary insights & marketing data on the retail and transaction
automation technology markets is available at:
www.vdcresearch.com
2 –  2009 VDC Research Group, Inc.
Auto ID & Transaction Automation Practice

4. 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 advised many of the llargest and most respected technology companies
Chris has d i d f h d d h l i
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

5. Some retailers finally starting to see the light at the
end of the tunnel … some …
• 2009 was a historically difficult y
y year for the b-to-c business operators
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 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 scrutinized
seized
• 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,
solutions that exhibit:
 Proven technical performance
 Demonstrated 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

6. Much of the growth will be in a ‘new’ retail
• Retail as we knew it no longer exists. Consumers are more powerful than ever
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before, 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 that
recession,
• 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
strategies 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

7. De-leveraged point of decision, purchase, service
Point of Point of Point of Point of
Service: Decision Service: Sale
Delivery Selection
Decision/ Service and Sale Merging Functionally
g g y
Fragmenting Physically
6 –  2009 VDC Research Group, Inc.
Auto ID & Transaction Automation Practice

8. Fragmented points of decision, purchase, service
3rd Site
Point of
Service:
Selection
S l ti
And it is fragmenting further … outside the facility:
Mobile Marketing and Mobile Commerce
g
Home
Auto
Street
Point of
Point of Sale
Service:
Delivery
Point of
Decision
7 –  2009 VDC Research Group, Inc.
Auto ID & Transaction Automation Practice

9. What are the tactical implications for retailers?
• In a word, it means the aggressive pursuit of balance in those
word
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 p
p premium branding?
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 Enhanced training in customer management OR merchandising?
8 –  2009 VDC Research Group, Inc.
Auto ID & Transaction Automation Practice

10. What are the tactical implications for retailers?
• In a word, it means the aggressive pursuit of balance in those
word
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
 Enhanced training in customer management AND merchandising?
9 –  2009 VDC Research Group, Inc.
Auto ID & Transaction Automation Practice

11. It is not just about data at the point of decision
• It is about the TARGETED data points ...
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• 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

12. Traditional retail becomes new retail
• The economic pressures felt in 2008 and 2009 have set in motion a shift from
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“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

13. 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 & 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

14. This will translate into slower growth for traditional
solutions
Estimated Global Shipments of POS Receipt Printers
950
850
Millions of Dollars
D
750
650
550
2006 2007 2008 2009 2010 2011 2012
13 –  2009 VDC Research Group, Inc.
Auto ID & Transaction Automation Practice

15. More rapid growth for other solutions …
Total Self-Service Kiosk Spend of North American
Based Retail Organizations
600
500
Millions of Dollars
D
400
300
200
2008 2009 2010 2011 2012 2013
14 –  2009 VDC Research Group, Inc.
Auto ID & Transaction Automation Practice

16. And the BHG (big hairy goal)?
• Individual 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.
 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.
devices but customers
 Unit serialization for inventory (check) … customer serialization for loyalty
programs … how about transaction serialization for key interactions, not just
pu c ases
purchases …
15 –  2009 VDC Research Group, Inc.
Auto ID & Transaction Automation Practice

17. Retail/ Transaction Automation Equipment Planning Service
• Three Tracks
Track 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 Volume
 Volume 12: Distribution Analysis
• Service Architecture
 Technology Supply-Side Reports (Track 1) or Vertical Market Reports (Track 2)
 Quarterly B ll ti (i l d d ith
Q t l Bulletin (included with purchase of at l
h f t least one f ll T k)
t full Track)
 Customized Executive Summary (included with purchase of entire Service)
 Real-time Analyst Access
16 –  2009 VDC Research Group, Inc.
Auto ID & Transaction Automation Practice

18. Primary research and market model highlights
Approximate Sample
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Target Communities
Size
Phone Interviews Retail automation equipment suppliers N = 100
Web-based End users, retailers, VARs/integrators,
N > 500
Interviews distributors
Actual Market Size/Supplier Forecast Market Size
Study Publication Date Share
Service Year 2010 2009 2010-2014
17 –  2009 VDC Research Group, Inc.
Auto ID & Transaction Automation Practice

19. 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
post-publication
 Executive presentation that walks your team through the research sponsored
18 –  2009 VDC Research Group, Inc.
Auto ID & Transaction Automation Practice

20. 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:
Tom Wimmer
Director, Auto ID and Transaction Automation Technologies Practice
twimmer@vdcresearch.com | 630-279-7959
t i @ d h 630 279 7959
Peter Doran
Account Executive
pdoran@vdcresearch.com | 508-653-9000 ext.139
d @ d h 508 653 9000 t 139
Chris Rezendes
Executive Vice President
cjr@vdcresearch.com | 508-653-9000 ext.120
j@ d h 508 653 9000 t 120
19 –  2009 VDC Research Group, Inc.
Auto ID & Transaction Automation Practice