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Serving Retail Technology


Tell us about Wincor Nixdorf and its operations.

Wincor Nixdorf basically offers hardware, software and services solutions to the banking and retail sectors. Our core product in banking is the ATM and all that is required for any bank to run effi ciently, including disaster management services, maintenance, etc. In retail, our core product is the electronic POS (ePOS) system. But, there is much more in terms of what we offer. The retail store today is a small data centre in itself; so it is becoming more complex to operate. Our revenue is roughly 2.5 billion Euros annually, where retail contributes one-third and banking contributes two-third. The plan is to change this to a 50:50 share.

How does the company operate in india?

We entered India in 2003 with the banking sector. Soon, we found a strong partner in AGS Transact Technologies. Together with them, we entered the retail segment in 2005 and founded our legal entity in 2006 as a commitment to the market. We took our time to enter the Indian retail market since we needed a specific environment to come up in the country; we are not interested in mom-n-pop stores! What we wanted was a developed retail environment that would help us bring value with our products. India is defi nitely one of the growth engines in the Asian market, besides China, in terms of not only technology or retail as a driver but through society and development of the middle class who wants to shop in a different style and habit. Globally, India is being viewed as a favourable market. Global majors such as Metro, Carrefour, and Walmart are already vying for space here and local players like the Future Group and Reliance are already making heavy investments in the country. Wincor is excited about the Indian opportunity. With a population of 1.2 billion, even if 1 percent shops, it is a huge number for all of us. Numbers do count in such a market.

Tell us more about ags transact technologies.

AGS Transact Technologies represents Wincor specifi cally in India. It has a pan-India presence. Apart from offering Wincor’s retail and banking solutions, it has two other businesses. One is a colourdispensing unit, which is used by the top paint manufacturers and gives AGS Transact Technologies an 85 percent market share in the country. The other vertical is petroleum, where the company is involved in automating petrol pumps. However, the company’s main business comes from Wincor Nixdorf.

What are your product offerings for the retail sector?

We offer hardware, software and services solutions. In hardware, our core offering is the ePOS system. That’s where we come from and that’s where we spend a lot of R&D. It is also the most threatened technology with all the commodotising thatis happening with this product. However, for us ePOS is purely volume play and we increasingly invest in R&D to take it to the next level. We stand at number one in Europe with this technology and are number two globally. To maintain these positions, we invest in R&D in making the systems simpler, cheaper, and faster from generation to generation. Another part of our hardware solutions is more value driven such as self-checkout systems and reverse vending systems. Reverse vending systems are essentially automated systems that help retailers collect and destroy PET bottles returned by customers for a refund. And, our third hardware offering involves cash handling and management. For this, we leverage our banking technology solutions and bring it to the retail market. Such technologies are highly individual, complex, have highmargins and high potential growth. In terms of software, we offer an application suite, which can be applied to the front and back office and integrated into legacy systems on a global basis. A lot of global players such as Metro, Carrefour, IKEA and H&M are our clients along with local players like the Future Group. Linkedto this is a group of people integrating these softwares, localising them to specific markets in terms of the legal requirements, EFT requirements and adapted to specifi c customer needs. Our final offering is service, where we assist the store in maintenance and management of services. At the end of the day, we want to be seen as store experts with end-to-end retail and banking portfolios.

Do your products differ with customer needs? 

Some of them do. For instance, self-checkout systems differ with the culture and customer needs. But the ePOS systems are pretty much standard safe for the size, touch or no-touch option, screen size, etc. The software for these ePOS systems adhere to culture requirements. The US has strict rules about ADA compliance. So we have to design our self-checkout systems accordingly. However, no one in Europe would use it and Asians wouldn’t even know about it. We have to adapt to local markets. This is where we spend, since we see value in local adaptation. We don’t think that one fits all – this attitude gives us a higher product assortment, but we are customer oriented.

What’s the global scenario in terms of accepting wincor’s technology solutions?

The response differs with the need. In more mature markets such as France, UK, Germany or even the US, retailers aim at driving efficiency. So, we design our solutions – mainly around automation – to meet those needs. These solutions aid in self-checkout, self-payment, payment automation solutions, etc. Retailers have to be smart and adapt technology to the customer needs by giving it a funelement. Customer acceptance is key for these technologies to work. Another global trend is the effort by retailers to change the customer’s store experience. While the past decade saw investors focussing on their backbone systems like the common ERP systems and global logistics systems, the last few years have seen investments moving into the store. The store has to become the differentiator; it has to be a place that cannot be replicated on the Internet. Store experience has a lot to do with the layout but is increasingly becoming more relevant with technology. Mobile technologies,online channel approaches, and seamless integration of these are driving retailers at the moment. Besides effi ciency of staff, the customer experience is now a real topic. We’ve been talking about it since decades, but now it is becoming real because otherwise there is no need to go to the store; you can shop online.

How has the economic slowdown affected the retail business globally? 

Retail formats have been affected in Europe, while in the Asia-Pacifi c region, India and China don’t seem to have suffered a slowdown. In fact, that is where the growth is. The trend in Europe is quite bipolar. More discounted formats are coming up and being accepted. Take Ikea for instance. It is a furniture discount store that is making a mark globally and its success is there for all to see. H&M,too, is a fashion discount format, although it doesn’t like to be called one. On the other side, there is an increase in the number of high-nd, branded stores such as Boss, Laecoste or Apple. These manufacturers are entering the retail arena for more brand recognition and to drive it to an extreme. The really affected businesses are department stores that are neither discounted nor high end. They are currently struggling to find the right formats for the future. Hence, currently the focus is on fashion, home and consumer electronics.Overall, the economic slowdown drives the need to drive efficiency. And that works for us since more retailers approach us for our technologies. Our aim is to make our solutions simpler, easier and cheaper on a global basis.

What are your observations of the indian scenario?

The Indian retail market is developing in a direction where we can offer value through our portfolio. We know exactly how to treat the tier-I retail environment. But we have a bigger growth appetite and intend to spread into the tier II and III markets where we have to understand the local market, can’t have direct sales channels and have to establish local partnerships to build an ecosystem for our products. A lot of our global customers intend to enter India but the timing and speed with which they will is stillopen. It has to do with the overall environment, the companies’ own financial situation in their home markets, etc. Of course, the current view on FDI by the Indian government will speed it up, but there are still a lot of question marks. However, it is a step in the right direction.

What are the challenges here, especially with your intention to venture into our tier ii and iii cities?

The Indian market is huge. So scaling out across the country will be a big challenge and we need a strong partner with local knowledge. We also require service channels pan- India. That’s why AGS Solutions is the ideal partner since they invest in environments apart from the capital city. For our venture into tier II and III cities, we have to go one step ahead. We have to build packages from our portfolio that are simple and easy to implement through a channel-based organisation. So, we have to take out the complexity, which works for a tier I account and is useless for tier II and III accounts.

What is the way forward for wincor nixdorf globally and in india?

We want to grow faster than the market. We are also venturing into sectors related to banking and retail such as malls (like the recently opened LuLu Mall in Kochi), airports (Hyderabad and Delhi) and service stations.