Frost: Handheld Terminals Change Retail Environment
July 21, 2008 // Published as a news service by IHS
Retailers are under constant pressure to differentiate themselves by providing personalized, responsive customer service and deploying technology that enables real-time communication and inventory management, while improving productivity.
According to Frost & Sullivan, handheld terminals are helping ensure this differentiation by bringing mobility and real-time ability into the retail environment.
Recent analysis from Frost & Sullivan of the handheld terminals and tablet PC markets found a combined revenue exceeding $4.5 billion in 2007.
"Handheld terminals have played a significant role in introducing mobility and real-time ability into the retail enterprise," said Frost & Sullivan research analyst Prasanna Prakash.
"They have enabled retailers to focus more valuable time on their customers, thereby boosting in-store productivity and efficiency, as well as customer satisfaction.
"They further aid in a wide range of functions, such as inventory and promotions management, competitive pricing, cross-selling, up-selling and better networking of stores across the world."
Analysts said an increasing number of retailers alter their business models to provide an innovative experience to their customers and improve their bottom line growth. They also focus on forming strategic partnerships with solution providers to offer unique customer experiences within the store.
Advanced wireless networks combined with handhelds allow store associates to manage the store from any location, thereby providing greater ease and reduced stock-outs. Analysts said this multifunctional aspect of handhelds has resulted in its increasing demand.
However, growing competition as a result of industry consolidation, flexibility in usage, continued downward pressure on prices and margins, security issues and application stability are some of the challenges that vendors need to overcome in order to improve their bottom line growth, analysts said.
"Furthermore, technologies such as radio frequency identification (RFID) have not had the expected success ratio in the retail scenario," said Prakash. "In addition to its high costs of deployment, there is still a lot of instability involved in the technology."
Technology vendors in the point of sale (POS), handheld terminals and tablet PC space focus on providing multifunctional device architectures capable of forward and backward integration into the retail value chain, analysts said.
A strategic partnership between technology vendors and retailers is key to address operational and profitability challenges and adapt to changing customer demands. Analysts said technology vendors also focus their sales efforts on small and medium enterprises, which is a largely untapped market.
Source: Frost & Sullivan.