The market for Electronic Shelf Labels (ESL) is entering the next phase of its evolution thanks to a recent plot twist. Zebra Technologies, the global leader in barcode printing solutions, recently was part of a $25 million round of investment in ESL provider ZBD Displays. A disruptive alternative to traditional paper-based shelf edge labels, this technology is gaining increased consideration among the global retailer community, and now it seems leading AutoID vendors as well.
Over the past several months, we have seen Zebra ramp up their investments in and development of RF-based solutions for asset tracking and inventory management and control – enhancing visibility into global enterprises’ diverse supply chains. The company aims to capitalize on emerging opportunities in new application areas backed by a sustained focus on RFID and RTLS product development. From our vantage point here at VDC, this move points to a couple of very interesting trends:
Falling display prices and recent innovations around label readability, connectivity, and communication make ESL solution providers a particularly attractive investment target. For a billion-dollar (well, almost) organization like Zebra that is faced with lackluster sales growth in its core competency, it is important to seek out and survey potential competitive threats to their legacy business. VDC believes shelf-edge labeling is one such focus area for Zebra. This investment in ZBD Displays will enable the company to not only reap the benefits of the inevitable migration to store operations automation but also potentially influence future product design, development and deployment. Zebra’s concerted efforts to grow its retail business – both in the US as well as internationally – will also hold it in good stead as the company attempts to maximize its returns.
Will Zebra’s strategic retail end-user alliances help ramp up solution adoption here in the US? Will Zebra combine ESLs with NFC, payment and RTLS to provide holistic retail solutions? Will the company take traditional ESL solutions outside the four walls of the retail shop floor to complement its RF-based real-time location systems (RTLS) business in manufacturing or warehouse environments? We’ll know soon enough.