TRADITIONAL LASER SCANNERS LOSING GROUND TO IMAGES

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TRADITIONAL LASER SCANNERS LOSING GROUND TO IMAGES
28 December 2004 - Venture Development Corporation

New research by Venture Development Corporation, the 2004 Retail Automation Equipment Vertical Market Analysis, estimates that the North American and European markets for in-store retail technology in 2004 exceeded $2.4 and $2.1 billion, respectively.

The market for traditional retail technologies including POS terminals, bar code scanners, and receipt printers is heavily saturated. Therefore, the majority of growth is expected for emerging technologies such as radio-frequency identification, electronic shelf labels, and self-checkout stations - all of which are expected to grow at an annual rate above 10%.

High-level trends specific to the illustrated technologies include:

ESL suppliers experience the most success with Tier 1 European retailers such as Casino, Leclerc, and Carrefour. While North American counterparts have not invested nearly the same resources in evaluating, developing, or installing these systems, a number of North American Tier 1 retailers are in the middle of system evaluations/pilots.

RFID is primarily limited to automated payment applications for in-store use. While RFID is the center of conversation when it comes to the retail supply chain, very little is done at the store-level (i.e., POS, stock replenishment, shelf inventory), leaving automated payment the number one application. The approaching deadline of Europe's Chip & PIN initiative has bolstered the sale of smartcards to the region, as well as RF-enabled payment terminals.

Self-checkout station shipments are expected to rebound after a sluggish two years (2002-2003). Since the heavy investment at the turn of the millennia from key retailers such as The Home Depot, Kmart, and Kroger, the market has not experienced similar sales. As a result, specialized suppliers of self-checkout systems became vulnerable as evident in Fujitsu Transaction Solutions' and IBM's acquisition of Optimal Robotics and PSI Inc., respectively.

According to VDC analyst Taylor Smith, 'As the weakened economies of 2000-2002 strengthen and retailers experience rejuvenated sales, the market has increased technology spending for upgrades, installations, and trials that were previously delayed due to budget constraints. At the top of the list is updating outdated traditional POS systems and scanners. Once the main systems are updated, leading retailers will turn to the evaluation and implementation of technologies such as electronic shelf labels, radio-frequency identification, and self-checkout stations.'

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About: Venture Development Corporation
Venture Development Corporation (VDC) is an independent technology market research and strategy consulting firm that specializes in a number of industrial, embedded, defense and niche enterprise IT markets. VDC has been operating since 1971, when graduates of the Harvard Business School and Massachusetts Institute of Technology founded the firm. Today, we employ a talented collection of analysts and consultants who offer a rare combination of expertise in the market research process; experience in technology product and program management, and formal training in engineering and marketing. VDC's clients include thousands of the largest and fastest growing tech suppliers in the world and the most successful investors participating in the markets we cover.

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