Checkpoint Makes a Bold Move

The company's purchase of OATSystems is a smart strategic play that bodes well for the RFID industry.
Published: June 24, 2008

June 24, 2007—Every now and then, something happens in the radio frequency identification industry that just makes me smile. The recent announcement that Checkpoint Systems is buying software firm OATSystems was just such a moment, because it makes good sense and was a smart strategic move by Checkpoint.

Checkpoint is, of course, best known for its electronic article surveillance (EAS) systems. The company has been a player in the RFID industry for several years, but not too long ago, some publications were reporting that it was pulling out of the RFID business, when, in fact, it was simply refocusing its efforts. Now Checkpoint is positioning itself at the center of the industry.

Here’s why the move makes sense: Checkpoint has a large installed base of retail customers, as well as a services organization that installs and maintains its EAS systems. By purchasing OATSystems, whose software turns RFID data into actionable information, Checkpoint has given itself the opportunity to help its retail customers take advantage of RFID quickly and cost-effectively.

Consider just one of OAT’s products—its promotions management application. Checkpoint could provide this to retailers and offer to install the hardware necessary to read tags on promotional displays, enabling those retailers to better manage promotions without a huge upfront investment or a lot of guesswork.

Checkpoint could even include, as part of the licensing deal, free “seats” (one-person licenses) for the retailer’s top-10 suppliers, enabling the suppliers to benefit from better promotions tracking as well. This would be a package deal that could make promotions tracking the first common RFID application in the retail space, and the foundation on which stores and their suppliers could build other successful applications.

This might not be what Checkpoint has in mind, of course, but the purchase of OATSystems clearly gives it the opportunity to help its customers leverage RFID, and that is likely to expand the use of RFID beyond the few retailers that currently have sizeable rollouts.

It could even give Checkpoint an opportunity to reach new retail markets. And with its knowledge of EAS source tagging, the company could show manufacturers how to meet RFID mandates, and how to turn the data they get back from retailers into information they can then use to improve the way they manage their supply chains. All in all, it seems like a great move by Checkpoint—one that could propel RFID adoption forward.