Vdc 2010 kiosk report excerpts
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Transcript of Vdc 2010 kiosk report excerpts
Kiosks
2010 Retail Automation Equipment Planning ServiceTrack 1, Volume 6
AutoID & Transaction Automation PracticeNed Daubney, Senior AnalystTom Wimmer, Director Chris Rezendes, Executive Vice President
Retail Self-Service Kiosks
Petroleum Payment Station
Customer Loyalty
Endless Aisle Guided
Selling
Self-services addresses the need to provide targeted campaigns and information to in-store customers
Gift Registry
VDC defines a self-service kiosk for the retail (including hospitality) market as a freestanding, interactive, multimedia system used to provide information, or enable a transaction.
Self-service is defined as the capacity for consumers to fully serve themselves without assistance, or interaction from the retail staff.
VDC’s self-service kiosks are customer-facing and exclude ATMs, photo, self-ticketing, HR, self-checkout, basic price checkers, and gas pump
kiosks, each of which offer their own market dynamics.
Retail Self-Service Kiosks Defined
2 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
E-Commerce Bill-PaymentFood
Ordering
Product Vending
(e.g.DVDs)
Self-Checkout
HR Applications
ATMs
Self-TicketingMultifunctional Price Checkers
PhotoKiosks
Basic Price
Checkers
Executive Summary – Market Size & Growth
• Retail and hospitality self-service kiosk suppliers realized nearly $474.6 million during calendar year 2009, with the average supplier signaling a dramatic market (nearly 20%) decline from 2008.
• The market is expected to grow at 9.3% CAGR over the next five years to $740.4 million in 2014.
• In 2010, most vendors are seeing significant return to normal or better as dead 2009 projects sprang back to life, with increased retailer conviction for kiosks.
• The few major vendors that did see revenue growth in 2009 characterized this growth as projects just too far along to cancel.
• But the big story for self-service kiosks is future expectations. Accelerated global adoption of retail self-service kiosk solutions is expected for the coming years. A stream of new applications mature involving mobility, iPad / tablets, product vending, motion sensors,
biometrics and analytics. As kiosk technologies continue to converge, integration with other in-store technologies will be critical.
• The value propositions associated with self-service kiosk solutions, coupled with the rapidly changing cultural demand for self-service by global consumers, will appropriately position these solutions as a center of convergence for a retailer’s customer service, transaction automation, and branding over the next five years.
What 2009 took, 2010 gave back – postponed 2009 projects revived in 2010
3 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
Executive Summary – Trends – New Technologies
Trends – New Technologies
• Disruptive Opportunities: Potentially disruptive technologies including: interactive digital signage, mobile applications and iPads
are generally not mentioned as threats by kiosk suppliers. Instead, these retail automation technologies are seen as complementary and integrate-able tools that can be deployed to meet application specific requirements. However, clearly there are risks associated with each new development.
• Strong Interest in Mobile Applications, but not yet any large scale demand: The highly anticipated demand for mobile applications has come much slower than expected. For
many, this market is still in the “buzz phase”, with no large-scale roll-outs. Technology challenges remain, but we expect to hear about many mobile solutions sometime within the next year or two, as mobile standards evolve.
• The iPad is Making its Mark: Strong retailer interest in, but conflicting supplier opinions on iPad kiosk solutions – a large number
of national pilot programs currently underway suggest a potentially large market impact, despite the tool’s fragility and novelty state.
• Interactive Digital Signage blurring with kiosks: Digital signage, and most notably interactive digital signage, is growing fast globally and often blurs
with interactive kiosks. The big question going forward is how kiosks will integrate or otherwise co-exist with digital signs.
Kiosk vendors face a barrage of new technologies – but are they friend or foe?
4 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
Executive Summary – Trends – New Applications
Trends – New Applications
• Product Vending converging with traditional self-service kiosk solutions. Redbox’s DVD kiosk success replicable and being tested for multiple other wide-ranging applications. Sleeker, pedestal-form vending kiosks will soon (within 2 years) noticeably alter the image of product vending. DVD rental kiosk business likely to transform into digital download kiosks – and into sleeker kiosk form factors.
Product vending kiosks seek to bridge the gap between traditional stores and online shopping Other parts of the world are less hesitant. In Europe and Asia, consumers buy anything from underwear to
prescription drugs from kiosks. Japan has one vending machine for about every 23 people, according to one source. The country’s fascination with technology have made it a vending paradise.
Also contributing to the proliferation of this “automated retailing” is the new capacity to remotely monitor and service the machines. Remote device management technology actually provides both technical support and marketing data.
• Loyalty Programs make a comeback Suppliers characterize this comeback in part due to higher-end retailers, who needed to cut prices during the
recession, pushing loyalty programs to satisfy long-time loyal customers, as they reel-back their price-cuts and raise them back to normal levels.
• Green Movement growing Some leading kiosk suppliers actively tapping into the growing global interest for cleaner solutions – which
to them spells an opportunity for new applications, and a competitive differentiator.
• Biometrics & Motion Sensors Hearing a lot of buzz about, and some small rollouts with, these, but little demand on any significant scale.
Product vending kiosks, green solutions gaining steam; While loyalty making a comeback
5 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
Retail Automation SolutionsALL Infrastructure: Hardware, Software and Services
TRADITIONAL DELIVERY PLATFORMSPOS Terminals / Workstations
POS Receipt PrintersPayment / Transaction Terminals
Emerging Delivery PlatformsImaging Solutions
Self-Checkout SolutionsKiosks
Personal Shopping SystemsElectronic Shelf Labels
Interactive Displays & Digital Signage
EM
EA
Retail & Hospitality Vertical Markets
Regional Markets
Technical Dimensions
Groce
ry / S
uperm
arke
t
Depar
tmen
t Sto
res
This study covers demand for a number of technologies in a range of retail and hospitality segments worldwide
AP
AC
Am
eric
as
Gas &
Conve
nience
Drug
Store
s / Pha
rmac
y
Specia
lty S
tore
Mas
s M
erch
ants
DIY
Primary Segmentation Parameters
6 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
Hospita
lity
Deployers versus Developers
• We count revenues earned from the manufacturing and sales of self-service kiosks. These revenues pertain only to shipments from kiosk manufactures and do not include companies such as Redbox,
Kodak or Blockbuster. In addition, these values reflect solely the movement of product from the point of manufacture to the first point of distribution and do not include any channel markup.
• A deployer installs kiosks as their own; earning revenues from transactions, not from the sales, or lease of the kiosk (e.g. Redbox, Blockbuster) As Redbox does not sell kiosks, nor does it produce any revenues from the actual design, or construction of kiosks,
they are not included in the study – Their revenues more simply come from DVD rentals.
• A developer is a firm that, on an OEM basis, designs and / or produces partial or complete kiosks. Some firms such as Flextronics builds kiosk for other kiosk developers (IBM) or deployers (Redbox).
Flextronics is thus a critical part of the kiosk production supply chain – their revenues come from building kiosks, and so their kiosk revenues are included in this study, while RedBox’s are not.
Why kiosk deployers (e.g.Coinstar’s Redbox, Kodak and Blockbuster) are not included in this study
Type Supplier Examples
Deployer – installs kiosks to earn transaction revenue Coinstar / Redbox, Kodak, Blockbuster
Branded Developer – Sells part / complete kiosks with its name on the kiosk
NCR, IBM, Fujitsu, Vigix, Wincor Nixdorf
Unbranded Developer – Sells part / complete kiosks as OEM / PLP Flextronics, Oleo
Hybrid Developer – Sells both direct and to branded developers Meridian, KIS, Frank Mayer
We highlight this distinction to make
clear just who is making money from the building
and selling of kiosks.
7 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
Tablet PCs
Product Vending
Machines
Digital Signage
Price Scanner
KIOSK MARKET
Kiosk Market Boundaries Blurring
Interactive Digital Signage
Product Vending Kiosks
TabletKiosks
Multi-functional
Price Scanners
Self-service kiosk market continues to mix with other retail automation technologies
Is the kiosk market expanding, or are modified
comparable solutions encroaching kiosk territory?
It may all be semantics as even the leading suppliers admit
this “blur” is indefinable.
8 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
Self-Service Kiosk Market Commercial Value Chain
• The commercial value chain for Kiosks is comprised of a number of direct and indirect selling relationships.
• Direct-to-end-user and OEM / private label partnerships are the most common distribution routes.
• Tier 1 retail organizations most often seek a direct relationship with the self-service kiosk supplier, who assumes project management responsibilities.
• For these accounts, VARs and system integrators
often play a key supporting role, ensuring that local post sale commitments are met.
• VDC expects partnerships with ISVs (independent software vendors) to increase as hardware suppliers look to provide their customers with best-of-breed customizable kiosk software solutions aiding in seamless integration with digital signage, mobile applications, POS and other in-store technologies.
End-UserEnd-User
OEMOEM
VADVAD
Sys. Int.
Sys. Int.
ISVISV
Self-Service Kiosk SupplierSelf-Service Kiosk Supplier
VARVAR
9 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
Self-Service Kiosk Market Regional Shipment Models
201420
13201220
11201020
092008
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
Amer
icas
EMEA
Asia-P
acific
Regional Demand for Self-Service Kiosk Solutions
2009 = $474.6 Million
(Mill
ion
s o
f Do
llars
)
• In 2009, the global retail market for self-service reached $474.6 million with unit shipments surpassing $203 million, down roughly 20% from 2008. VDC anticipates that revenue shipments for Self-Service kiosk will grow at a CAGR of 9.3%, approaching $740 billion by 2014.
• Sales in the Americas region continue to be driven by Tier 1 retailers, although large-scale kiosk rollouts appear few and far between. Retailers in 2009 were extremely cautious with spending, but have clearly spiked up demand for self-service kiosk applications.
• The Asia-Pacific market is expected to be the fastest growing region over the next 5 years as retail in China and India continues to scale. This demand will be fueled by: Multinational corporations expanding their foot print in the region; and Tier 1-2 retailers continuing to make initial investments in kiosks.
Slow and steady growth will be fueled by pent-up demand for self-service solutions and new applications
10 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
Self-Service Kiosk Average Factory Selling Price
2014201320122011201020092008
1,800
1,900
2,000
2,100
2,200
2,300
2,400
2,500
Amer
icas
EMEA
Asia-P
acific
Global AFSP for Self-Service Kiosk
2009 = $2321.8
Americas EMEA Asia-Pacific
(Do
llars)
11 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
• The AFSP (price from the factory to the first point of distribution) varies with the system components integrated.
• The AFSP in each region will continue to fall as display prices decline, cheaper I / O components enter the market, and smaller form factors win favor.
• Another major downward pricing influence will be the movement of the larger, global suppliers to provide more standardized solutions for large-scale deployments of the most popular kiosk applications.
• The upfront capital investment required has been a barrier to adoption for many retailers, particularly in the current environment. Some suppliers have responded with managed services and SaaS models that enable retailers to invest for less.
AFSPs vary widely depending upon the application, form factor, component makeup and quality
Competitive Landscape
• The kiosk market ecosystem consists of hundreds of relatively small and several large companies providing various parts of the complete kiosk solution.
IBM, NCR, Frank Mayer, Fujitsu and Kiosk Information Systems (KIS) continue to be the market leaders regarding self-service kiosk solutions within North America. KIS’s position within the North American market is a direct result of extensive product portfolio and their advanced level of customization and engineering regarding application / vertical market solutions.
IBM and NCR continue to leverage their easily customizable product portfolio and strategic partnerships to secure their market-leading positions across several vertical markets.
• The global market for self-service kiosk solutions remains highly fragmented. Characterized by distribution channels that lend themselves to an increased level rebranding due to the multiple OEM and supplier organizations that interact via strategic and short-term partnering agreements, the kiosk market continues to be extremely convoluted.
• Kiosks still lack that killer application that warrants multiple Tier 1 retailers to order large-scale kiosk rollouts. While several applications currently enjoy widespread adoption, most orders are of the size that niche vendors can fulfill. Regional top vendors such as KIS and Meridian thrive in this market.
• In the projected market environment, VDC expects certain market consolidation as larger, global suppliers seek to standardize products and compete more successfully on price and global support.
• VDC projects strong near-future demand for more standardized, off-the shelf solutions for these most popular applications, enabling the global solutions providers (IBM, NCR, Fujitsu, Motorola) to more capably build in their economies of scale. The world doesn’t need 500 variations of a product guide kiosk. Standardization, for popular kiosk applications, will likely rearrange the industry structure soon.
Under this scenario, global vendors will dominate large-scale Tier 1 rollouts, high-end niche vendors will remain the industry thought leaders and dominate the lucrative, customized kiosk demand, while low-middle-end kiosk developers will serve lower-tier retailers, while needing to tighten their market niches to grow.
12 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
Niche marketplace has changed little, but that may change
Competitive Positioning
KioskSophistication
RegionalSupplier
Global Capabilities & Presence
Established leaders, many niche players, little vertical integration
NeoProducts
AdFlow Networks
IBM
Kiosk Info Systems
Fujitsu
Wincor
SeePoint
Meridian
Frank Mayer
NCR
Flextronics
Olea
ZoomSystems
Ultimedia
Radiant
High-end customizers – flourishing in current market.
PFU
Global giants – poised to see economies of scale provide price/support advantages.
Low-middle market players need to
consolidate or find tight niches to compete with global leaders.
LiveWire
HashkioskPartech
friendlyway Motorola
13 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
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The entire contents of VDC’s 2010 Retail Automation Planning Service, Track 1, Volume 6: Kiosks are proprietary to VDC Research Group, Inc. (VDC), and may not be distributed in either original or reproduced form to anyone outside the client’s internal organization within five (5) years of the report date without prior written permission of VDC.
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2010 VDC Research Group, Inc.