Analysts Evaluate Sensormatic/Vue Acquisition
By Alliston Ackerman
October 8, 2008 - Historically, retailers and consumer goods manufacturers have experienced challenges tracking in-store inventories. According to RIS News, out-of-stocks alone may contribute up to $93 billion of lost revenue for retailers, higher operational costs and an erosion of customer service. And ABI Research finds that promotional out-of-stocks can translate into $31 million in lost sales annually for a hypothetical $3-billion consumer goods manufacturer.
But item-level RFID tagging is coming of age, and the recent acquisition of Vue Technology, a provider of item-level RFID software and infrastructure solutions, by Sensormatic Electronics Corporation, a Tyco International company, pushes the concept even more into the mainstream.
Sensormatic is a provider of vital loss prevention and operational improvement technologies. Meanwhile, Vue's item-level RFID technology includes a full software platform, RFID readpoints and RF networking devices to track inventory on a real-time basis. While Vue has significant market traction with leading retailers worldwide, its smaller size presented challenges of scale. Post acquisition, Vue gains access to Sensormatic's product development resources and Tyco's global delivery capabilities. Additionally, Vue expects to benefit from the growing Sensormatic portfolio of smart sensor technologies.
"The acquisition of Vue Technology marks the next phase of Sensormatic's strategy for providing layered technology at the retail selling floor, which includes EAS, RFID and more. The products, software and services offered by Vue Technology are complementary and will provide Sensormatic and ADT a more comprehensive solution set to maximize retail store operations," says Michael Laird, research director, RFID & Contactless, ABI Research.
Bill C. Hardgrave, Ph. D., director, RFID Research Center for the University of Arkansas, agrees: "RFID is promising to be a great technology for loss prevention, either as a complementary technology to EAS or as a standalone technology. As we have seen recently with similar acquisitions, Sensormatic is now poised to be a total solution provider."
According to John Fontanella, vice president, Research for AMR Research, Sensormatic had been exploring an acquisition like this even before Checkpoint Systems acquired OATSystems earlier this year. "It makes sense. This acquisition represents a step up in RFID technology's evolution. Sensormatic is not looking to make massive process changes or force retailers to do business in a different way, but instead, use RFID to enhance the protection already provided through EAS technology."
Laird elaborates, "By bridging the gap between the sales floor and the stockroom, this acquisition is positioned to help accelerate the adoption of RFID technology to manage in-store operations, enhance the overall customer shopping experience, and promote the enhanced retail supply chain visibility."
October 8, 2008 - Historically, retailers and consumer goods manufacturers have experienced challenges tracking in-store inventories. According to RIS News, out-of-stocks alone may contribute up to $93 billion of lost revenue for retailers, higher operational costs and an erosion of customer service. And ABI Research finds that promotional out-of-stocks can translate into $31 million in lost sales annually for a hypothetical $3-billion consumer goods manufacturer.
But item-level RFID tagging is coming of age, and the recent acquisition of Vue Technology, a provider of item-level RFID software and infrastructure solutions, by Sensormatic Electronics Corporation, a Tyco International company, pushes the concept even more into the mainstream.
Sensormatic is a provider of vital loss prevention and operational improvement technologies. Meanwhile, Vue's item-level RFID technology includes a full software platform, RFID readpoints and RF networking devices to track inventory on a real-time basis. While Vue has significant market traction with leading retailers worldwide, its smaller size presented challenges of scale. Post acquisition, Vue gains access to Sensormatic's product development resources and Tyco's global delivery capabilities. Additionally, Vue expects to benefit from the growing Sensormatic portfolio of smart sensor technologies.
"The acquisition of Vue Technology marks the next phase of Sensormatic's strategy for providing layered technology at the retail selling floor, which includes EAS, RFID and more. The products, software and services offered by Vue Technology are complementary and will provide Sensormatic and ADT a more comprehensive solution set to maximize retail store operations," says Michael Laird, research director, RFID & Contactless, ABI Research.
Bill C. Hardgrave, Ph. D., director, RFID Research Center for the University of Arkansas, agrees: "RFID is promising to be a great technology for loss prevention, either as a complementary technology to EAS or as a standalone technology. As we have seen recently with similar acquisitions, Sensormatic is now poised to be a total solution provider."
According to John Fontanella, vice president, Research for AMR Research, Sensormatic had been exploring an acquisition like this even before Checkpoint Systems acquired OATSystems earlier this year. "It makes sense. This acquisition represents a step up in RFID technology's evolution. Sensormatic is not looking to make massive process changes or force retailers to do business in a different way, but instead, use RFID to enhance the protection already provided through EAS technology."
Laird elaborates, "By bridging the gap between the sales floor and the stockroom, this acquisition is positioned to help accelerate the adoption of RFID technology to manage in-store operations, enhance the overall customer shopping experience, and promote the enhanced retail supply chain visibility."
How will this affect consumer goods manufacturers? It's too early to tell, but with this acquisition CGT expects more retailers to get onboard with item-level RFID tagging.