by Rowan Litter | 05/23/2024

 

Zebra Technologies held its 2024 Innovation Day on May 14th, giving partners and analysts a dive into the company’s latest innovation roadmap and goals for the future. The event began with a highlight of key ‘megatrends’ that Zebra believes will support long-term growth, including IoT, automation, mobile/cloud computing, rising eCommerce demand, and of course, Artificial Intelligence. As digitalization initiatives continue to take over in enterprises across the world, automation capabilities are becoming increasingly apparent, enabling workers and robots to work together, and providing more opportunities for Zebra’s diverse portfolio of mobile, data capture, and robotics automation solutions and services.

Zebra’s success in serving 80% of Fortune 500 companies is highly attributed to a robust got-to-market strategy and the company’s 10,000 reseller partners. A major component to this strategy is investments and acquisitions of companies in adjacent product-defined markets, such as machine vision and robotics. As the company’s venture capital arm, Zebra Ventures currently has investments in 14 companies centered around software, robotics, machine vision, and RFID technology; some of Zebra’s investments in industrial automation technology companies include: Fetch Robotics, Matrox Imaging, Adaptive Vision, and Cortexica for machine vision, and Antuit AI for omnichannel demand forecasting. Given the company’s goals to serve evolving enterprise use cases, including warehousing automation, rising eCommerce demand, and sustainability initiatives, VDC Research expects Zebra to make long-term product expansion via acquisitions.

Source: VDC Research’s 2023 Buyer Behavior Guide amongst Warehousing Decision-Makers

As emerging technologies are integrated into enterprise operations, operational workflows are rapidly changing, especially in frontline worker environments. During CTO Tom Bianculli presentation on changing technology, he identified 3 key industry dynamics that are evolving: the cost of labor shortage is estimated to result in $8.5 trillion unrealized economic output by 2030 (due to a labor shortage of 85 million workers); there are shorter lead times and greater variability for order fulfillments (i.e. visibility into inventory and predicting demand), resulting in costs to retail enterprise due to out-of-stocks and overstocks of around $1.8 trillion in 2023; the rise of eCommerce and last-mile-delivery business models from changing customer expectations that are resulting in 3,240 combinations of routes to the customer on-demand. In VDC Research’s 2023 Buyer Behavior Survey amongst warehousing decision-makers, increasing on-time shipments/shipping speed (41.7%), reducing labor costs (40.0%), and improving perfect order rate (38.3%) were noted as the top operational initiatives for 2024. To adapt to these new industry dynamics, OEMs such as Zebra need to invest in advancing technologies to serve this on-demand economy. AI-powered automation is a big component that will enable asset visibility, connect frontline workers with the information they need, and automate tasks for greater operational efficiency.

Source: VDC Research’s 2023 Buyer Behavior Guide amongst Retail Decision-Makers

Some of the top inefficiencies that exist in the enterprise today can be tackled through investment and solution development. Amongst retail enterprises, only about 65% have accurate inventory management. Through RFID technology, retailers can achieve almost 100% visibility and create a smart, sensor-enabled store. According to VDC’s Buyer Behavior Survey amongst retail decision-makers, improved loss detection or prevention (30.0%), and greater control over stock (28.3%) were noted as the top two perceived benefits of deploying RFID in a retail environment. Amongst food manufacturers, about one-third of the food manufactured goes to waste. Condition-monitoring technology that is powered by AI can alert shippers when a shipment is undergoing suboptimal conditions and then automatically mark down the good’s price to sell faster. The last example presented by Zebra was a staggering 95% turnover rate for retail workers. The top priority driving enterprises’ investments in mobile device solutions to retail store associates was to improve staff responsiveness (43.3%). AI digital assistants for employees can ease the training process and result in a better experience for employees in their day-to-day workflows.

One of Zebra’s core market segments, Enterprise Mobile Computing, includes rugged tablets and handheld computers. In 2023, the global rugged tablet market saw around a 10% contraction YoY, while the rugged handheld market declined by almost 30% YoY. Despite these recent market struggles, Zebra anticipates 5-7% long-term organic sales growth with additional upside through investments in adjacent and complementing technologies such as, RFID, machine vision, robotics, advanced software, and managed services.