Enterprise Mobility Solutions

Transcription

1 Enterprise Mobility Solutions 2010 Market Intelligence Service, 7th Edition Track 4, Volume 6: Retail In-Store An Executive Brief Balca Korkut, Analyst David Krebs, Director

2 Executive Brief: Retail In-Store Following significant contraction in 2009, retail market rebounded strongly in 2010 and is poised for growth State of the Market: Overall spend for enterprise mobility solutions in the retail sector contracted by as much as 30-40% in The market turned around considerably during the first half of 2010, growing by over 10% (albeit over an already low base). Pent-up demand was the primary catalyst as large retail organizations freed up capital to apply to postponed projects. However, given the historical characteristics of the retail mobility market highly penetrated, highly mature this burst in growth is likely short lived unless vendors succeed at expanding their total available market end users react positively to some of their new value propositions. Given that outlook, the retail market is not expected to reach pre-recessionary levels (2008) until Enterprise mobility solutions hardware, software and professional services for retail service applications are expected to reach $1,807 million in 2010 based on VDC estimates. This market is expected to exceed $2.7 billion by Although much of the near term opportunity has been to satisfy pent-up demand for traditional systems i.e. upgrading existing retail shop floor management solutions a broader suite of mobile applications and services are emerging in the retail sector. These are in part being driven by internal workforce management mandates and also by increased focus on customer-facing applications. The use of mobile solutions by retailers, manufacturers, distributors and end-users continued to scale. With a tremendous amount of information at the consumers disposal today, retailers are increasingly feeling the need to better equip their employees with the right tools and adequate knowledge/ information to expand their customer base, while at the same time increase loyalty and reduce churn. Consequently one of the most critical success requirements for retailers today is to become more agile in recognizing and responding to changes in customer needs and trends in addition to more rapidly responding to changes in competitive discounting practices. In addition, retail organizations are increasingly focusing on merchandizing strategies and the use of mobile solutions to support these strategies as a key initiative looking into VDC Research Group, Inc.

3 The Evolution of Socialization & Impact on Enterprise Mobility Personal Productivity Knowledge Distribution Collective Intelligence Custom designed applications on purpose-built devices Silo approach to solution development Personal computing attachments, documents and personal repositories One-way knowledge distribution Team-based computing Mobile deployment of enterprise and social software Distributed learning and collaboration VDC Research Group, Inc.

4 Executive Brief: Retail In-Store Retail returning to growth in 2010 Technology & Application Trends: Some of the key mobility initiatives in retail have centered on key material and process management efficiencies, including: Reducing of out of stocks Improving product availability Reducing time to take inventory Speeding up transaction time at POS to improve throughput However, the strongest growth is expected to be around customer facing applications and merchandizing applications. In addition, retailers are seeing a lot of value in self service applications as another point of customer interaction. Workforce management improvement is another critical investment driver in retail. Today the ratio mobile store associates to mobile devices deployed in retail settings is approximately 6:1. This results in significant communication and collaboration inefficiencies. Retail organizations are looking not only to reduce this ration but also further converge various communications mediums data, voice, text, video to drive greater collaboration among the workforce who in turn can provide improved service quality to the customer. Suppliers are also future-proofing new product offerings by coupling them with managed services options allowing for updates and upgrades at a significantly lower overall cost to the retail end-user. B2C applications especially around mobile payment and mobile loyalty programs continue to gain traction. While technology and infrastructure investment remains a key challenge in certain regional markets (for example the limited deployment of NFC readers at the POS). However, initiatives such ISIS the recently established agreements between AT&T, Verizon, Visa, MasterCard and Barclays bode well for the future of this medium. Loyalty programs which enable mobile coupons through smartphone apps and represent new opportunities for the market. Vendors are revising their club/reward/loyalty cards to reflect the mobile developments VDC Research Group, Inc.

5 Summary Observations Retail market rebounding from the recession testing new mobile solution and support models Despite their budget-consciousness, consumers are more receptive to enterprise mobility solutions as the benefits associated with efficiency and productivity of the mobile workforce are realized. Growing interest in next generation mobile OS platforms to enable new mobile deployment and support models, including: Opportunity for cloud optimized devices that have more flexible/thinner OSes and more limited on-board computing and processing overhead yet can still operate in disconnected state Demand for retail organizations to gain greater control over their mobile application development and distribution for some next generation workflows and process. However, core (mobile) enterprise applications to remain on legacy platforms (Windows) for near/mid term. Positive ROI achieved through empowering field workers with real-time information is communicated to retailers so that enterprise mobility related investments gain higher priority. The increasing demand for mobile payment and loyalty programs are acting as a catalyst for investment growth in various B2C efforts along with further investment in hospitality segment. The bottom of the pyramid section of retail end-users remains a largely untapped market for leading suppliers in the retail automation technology space. In order to address the latent demand in this market, suppliers have started offering solutions with characteristics such as: Slimmer form factors and lower cost hardware solutions Bundled off-the-shelf solutions with Hardware, Software and Services, often offered under the auspices of a managed services contract. Scalable modular solutions, particularly for customer-facing technologies VDC Research Group, Inc.

6 About VDC Research Group VDC Research Group (VDC) provides exceptionally detailed direct-contact primary market research and consulting services to many of the world's largest technology suppliers, innovative start-ups and leading investors. The firm is organized around six practices, each with its own focused area of coverage. Our clients rely on us for highly segmented research and analysis which is derived from our unwavering commitment to the idea that all markets are collections of smaller market segments and that winning companies must develop and execute strategies that are segment-specific. Please visit our website at to learn more, or call: VDC Research Group, Inc.

7 Contact Us For further information about the Retail In-Store report, or the 2010 Enterprise Mobility Solutions Market Intelligence Service, contact: David Krebs, Director,, x136, Balca Korkut, Analyst, x134, Gerrald Smith, Account Director, x113, VDC Research Group, Inc.