2014 AutoID & Data Capture Executive Brief The Global Market for Stationary POS Barcode Scanners Part of the Strategic Insights 2014 Barcode Solutions Research Program: Track 2, Topic 2 By Richa Gupta, Senior Analyst, with David Krebs, Executive Vice President
Inside this Report This research analyzes the key strategic issues, trends, and market drivers for stationary pointof-sale scanners. Market sizing and forecasts for scan engines are also provided. Market analysis (historical, prior year, and forecast revenues and unit shipments), vendor considerations, and growth opportunities are offered across the following dimensions: technology types, end-user industries, distribution channels, and geographies. What questions are addressed? Unlike the handheld scanner market, laser technology still dominates stationary scanning, but for how much longer? How should vendor strategies evolve to meet changing market requirements for application development and multi-functional solutions? Given vendors heavy reliance on their partners for solution sales, installation, and integration, what is VDC s vision for channel evolution? How should vendors differentiate, remain competitive, and pursue new market opportunities? Who should read this report? This annual research program has been carefully designed for senior decision-makers at barcode technology and solution provider companies, including those individuals with the following roles: CEO and other C-level positions Corporate development and M&A Marketing Business development and sales Product development, management, and strategy Channel development, management, and strategy VDC Research, 2014 Page 1
Contents Executive Summary Key Findings Global Market Overview and Forecast Exhibit 1: Forecasted Global Shipments by Region of Stationary POS Scanners (US $M) Exhibit 2: Forecasted Global Shipments by Form Factor of Stationary POS Scanners (US $M) Global Market Five-Year Forecast: Imagers fast encroaching upon laser scanner territory Regional Forecasts The Americas Exhibit 3: Americas Forecasted Shipments by Form Factor of Stationary POS Scanners (US $M) Europe, the Middle East, and Africa (EMEA) Exhibit 4: EMEA Forecasted Shipments by Form Factor of Stationary POS Scanners (US $M) Asia-Pacific (APAC) Exhibit 5: APAC Forecasted Stationary POS Scanner Shipments by Form Factor (US $M) Comparative Vertical Forecast Exhibit 6: Global Shipments of Stationary POS Scanners by Economic Sector (US $M) Competitive Landscape Exhibit 7: Global Vendor Shares of Stationary POS Scanners Vendor Insights Distribution Channel Insights Exhibit 8: Five Year Forecast: Global Shipments of Stationary POS Scanners by Distribution Channel (US $M) About this Report VDC Research, 2014 Page 2
Executive Summary [Data available in full report.] 2013 was a rough year for stationary point-of-sale scanner vendors. The market contracted XX% from 2012 to $XXX million. VDC forecasts global revenues to grow X% in 2014 to $XXX million and increase to $XXX million by 2018. Presentation scanners will lead growth with a CAGR just under X% through 2018 while mini-slot (single window) scanner sales will remain relatively flat with modest growth in Asia-Pacific offsetting a decline in the Americas. Imagers will gain favor given their ability to facilitate multiple applications with a single device. However, large form-factor, high-performance imagers will have a tougher run. Their contribution will depend on vendors ability to communicate productivity enhancements at the retail POS checkout. Challenges including price sensitivity due to hardware commoditization and availability of a broad range of alternative technology investment options to choose from deter retailers from directing investments toward upgrading to more expensive fixed-position scanning solutions. Options include multi-functionality supporting mobile devices, cloud-based applications, and both online and offline payment security initiatives. Vendors that focus on application development, in collaboration with their solution partners, as well as value creation will be most successful in ramping up stationary POS scanner investment and implementation. A one-size-fits-all strategy will not help capitalize on opportunities in new verticals and regions. Instead, altering product designs to meet specific application requirements while also being cost competitive and leveraging newer channels will enable market leaders to see their growth strategies pay off. Key Findings The high-volume retail landscape continues to be dominated by laser technology. This will begin to change as high-performance imagers gain favor especially with big-name retailers. At the same time, presentation scanners that experienced decline in 2013 will be deployed in non-retail environments including quick service restaurant chains. Recent data breaches at large retail chains have made organizations acutely aware of the need for enhanced payment security. Coupled with growing interest in NFC, low energy Bluetooth and mobile payment options like Apple Pay, these initiatives will prompt retailers to realign their technology investments, shifting them away from scanners. Meeting technology needs of underserviced, lower-revenue-tier organizations is largely an afterthought. Companies like mobile payments enabler Square (with its ios-centric product offering) are looking to change that, offering more palatable investment options to small business owners. POS scanner vendors need to embrace this trend and introduce products that serve the growing small business or small-store-format retail community. Companies like Infinite Peripherals, Re-Vision, and Scandit are all working to facilitate enterprise-grade barcode scanning in retail store environments via ios and Android VDC Research, 2014 Page 3
devices. Retailers investments toward developing self-shopping applications will impact usage of and investments in large format fixed-position scanner sales in the long run. Global Market Overview and Forecast Exhibit 1: Forecasted Global Shipments by Region of Stationary POS Scanners (US $M) VDC Research, 2014 Page 4
Global Market Five-Year Forecast: Imagers fast encroaching upon laser scanner territory VDC forecasts the global stationary point-of-sale scanner market to grow to $XXX million by 2018 from $XXX million in 2013, a CAGR of X%. 2013 was a rough year for stationary POS scanner vendors; the market saw overall revenues decline almost XX% from 2012. Estimates indicate that 2014 is shaping up to be a marginally better year overall, with VDC forecasting a X% year-over-year growth. Vendors have seen a small pickup in presentation scanner sales through the first half of the year, which will contribute to overall market growth. Following a stellar 2012, presentation scanner shipments dropped a staggering XX%, contributing significantly to the overall segment decline. Retailers and other such commercial, customer-facing establishments have been experiencing a revolutionary change in the way they communicate with their target market in the past 18-24 months. Businesses want to capitalize on the pervasiveness of mobility to generate and cultivate consumer loyalty and interactivity in support of their omni-channel objectives. VDC believes this emphasis on mobile investments has negatively impacted the market for general-purpose POS scanners, particularly in the US and Western Europe. Despite this recent sales decline, VDC expects smaller form factor presentation scanners to gain in popularity for customer-facing applications in non-retail environments. Low adoption and deployment costs, plug-and-play connectivity, and minimal device integration and maintenance requirements will particularly appeal to small- and medium-sized businesses as well as hospitality establishments like cafes and entertainment centers. This will drive the overall segment CAGR to X.X% through 2018. Laser scanners are the technology of choice in high-volume retail environments with highthroughput requirements. These come in the form of omni-directional bioptic scanners sold by Datalogic, Honeywell, and NCR. VDC finds tier-1 retailers show general apathy toward camerabased alternatives to laser bioptic scanners (by Datalogic and Motorola Solutions), which is somewhat surprising considering their general interest and heightened investments in nextgeneration solutions. This potentially speaks to the continued efficacy of laser scanners in largeformat retail establishments like supermarkets and discount stores, where consumers typically have large market baskets. VDC Research, 2014 Page 5
About this Report VDC Research s i2: ideas & insights reports provide clients with deep insights into product, market, channel, and competitive strategies and tactics. Using deep and rich datasets based on extensive primary research, the i2 reports provide clients with the insights they need to make strategic decisions for their business about the markets they are in and the markets they want to be in. Coverage includes a combination of market sizing, segmentation, forecasting, end-user requirements analysis, competitive analysis, and more. For more information contact us at info@vdcresearch.com and visit our website at www.vdcresearch.com. VDC Research, 2014 Page 6