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By Julian Goldsmith, 8 October 2007 11:21

COMMENT

Retail technology isn't exactly a green-field market. There are established vendors in pretty much every field where technology is used to support retail operations. In fact, the sector has just gone through a period of consolidation, with smaller players being gobbled up by bigger rivals, indicating the level of maturity.

On the customer side the big ticket spends seem to have dried up, with most multiples already implementing infrastructural projects and the little money left to invest being targeted on small-scale solutions that screw further efficiencies out of existing platforms.

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Given this background, it might seem strange that security specialist ADT is attempting to reposition itself as a business intelligence provider. It does fire alarms doesn't it? This is true but it also provides specialist retail security based around technologies such as CCTV and RF security-tagging (As apposed to RFID tagging, although it's heavily involved in that technology too, for obvious reasons).

It's a simple notion to integrate these surveillance systems to provide quality data about what customers and staff are doing in stores, and not just in respect of security. This information can be used to analyse in-store experience and staff resourcing, to name but two functions.

On top of this, ADT already has contacts with a number of global retailers, including Inditex, Karstadt and Tesco, that should be the envy of its rivals. Not only is its order book impressive but the point of contact is generally C-level and often outside the IT department, which is a terrific asset not shared by many other IT providers.

This trump card shouldn't be dismissed by retailers - and incumbent IT suppliers should be concerned.

ADT's main weakness has got to be its lack of IT expertise. It knows the hardware but this is a commodity market and the margins are in the data processing behind it these days. It has taken on a small project development staff but in the tech-savvy stakes the established players can easily accuse it of not knowing its onions.

The company knows it won't always be able to compete in the market on this level, and is seeking partnerships with other suppliers to plug the gaps. So, rather than using ADT's inexperience in the business intelligence field as a stick to beat it with, other suppliers should use this gap as an opportunity to piggyback on ADT's impeccable connections.

Whether ADT can penetrate the business intelligence market in the retail vertical sector is at best uncertain. However it's an interesting move from a player with a big brand identity for retailers and silicon.com will be watching its progress closely.