Automatic Identification and Data Capture Market Size [2031]

Report Description

Automatic Identification and Data Capture Market Outlook 2031

The global automatic identification and data capture market size was USD 52.5 Bn in 2022 and is likely to reach USD 134.3 Bn by 2031, expanding at a CAGR of 11% during 2023–2031. The market growth is attributed to the advancements in technology and the rising need for enhanced operational efficiency & productivity.

Growing e-commerce and online retail is anticipated to significantly boost the automatic identification and data capture (AIDC) market. Rising global supply chain complexities and accurate & timely data capture are essential for tracking products from manufacturing to the delivery process, leading to increased demand for AIDC technologies for transparency in the supply chain.

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Automatic Identification and Data Capture (AIDC) is the automated process of identifying and gathering information about objects, individuals, and transactions. This is achieved using technologies, such as barcodes, radio frequency identification (RFID), biometrics, optical character recognition (OCR), and magnetic stripes.

AIDC has extensive applications in various industrial sectors, including transportation and logistics, chemical production, pharmaceuticals, food and beverage, automotive, consumer goods, retail, warehousing, and distribution, among others.

The market report finds that the COVID-19 pandemic boosted the automatic identification and data capture market. The pandemic accelerated the adoption of contactless technologies, which minimize physical contact in various industries, particularly in retail, healthcare, and transportation. Lockdowns and restrictions on physical retail to prevent the spread of the virus increased the demand for e-commerce platforms.

This led to a surge in demand for AIDC technologies, especially barcodes and QR codes for efficient order fulfillment, inventory management, and contactless payments.

Impact of Artificial Intelligence (AI) Automatic Identification and Data Capture Market

Artificial Intelligence (AI) is expected to boost the revenue of the market players in the automatic identification and data capture market. This technology is capable of processing large volumes of data at high speeds. AI algorithms analyze historical data to predict future demand patterns. This helps in optimizing inventory levels, reducing carrying costs, and minimizing stockouts or overstocking situations.

Automatic Identification and Data Capture Market Dynamics

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Major Drivers

Rising demand for improved accuracy and precision drives the market. AIDC technologies such as barcoding, RFID, and biometrics reduce human error in data capture. This is especially critical in industries where precision is paramount, such as healthcare and manufacturing. Accurate data is crucial for making informed business decisions. AIDC ensures that the data collected is of high quality, which leads to improved insights and decision-making processes.

Existing Restraints

High installation cost of AIDC solutions hampers the automatic identification and data capture market. Small and medium-sized enterprises often have limited capital resources. High costs associated with installing AIDC solutions, such as smart cards or RFID systems, hamper the demand for these solutions, thereby restraining the market growth.

Emerging Opportunities

Rising government initiatives and regulations create lucrative opportunities for the market growth. Governments often apply regulations mandating the use of AIDC technologies, such as RFID and barcodes, in various sectors, such as healthcare for patient identification, transportation for tracking & safety, and finance for secure transactions.

Governments are increasingly embracing digital transformation initiatives that involve the use of AIDC technologies for services, such as e-passports, e-voting, and digital IDs. Accuracy of information and mandates create high demand for AIDC solutions. For instance,

• In January 2023, Avery Dennison made a significant investment of USD 100 million in a manufacturing facility of RFID tags. This strategic move aligns with the company's vision of providing a distinct digital identity for every item, further solidifying its position as a major provider of RFID technology.

Scope of the Automatic Identification and Data Capture Market Report

The market report includes an assessment of the market trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Automatic Identification and Data Capture Market Segment Insights

Technology Segment Analysis

Based on technology, the automatic identification and data capture market is divided into smart cards, optical character recognition (OCR) systems, barcodes, biometric systems, and radio frequency identification (RFID). The barcodes segment is expected to hold a dominant share of the market during the projection period, as it aids in capturing data efficiently.

Barcodes are quickly scanned using a barcode scanner or a smartphone camera, which significantly speeds up processes, including inventory management, point-of-sale transactions, and order processing. This translates to time and cost savings for businesses.

The smart cards segment is projected to expand at a significant growth rate in the coming years, due to its enhanced security features and rising adoption of contactless payment. Smart cards offer advanced security features, such as encryption and authentication, which makes them a preferred choice for applications that require high levels of security, such as access control, payment systems, and identity verification.

Smart cards played a crucial role in the widespread adoption of contactless payment methods, which is driving the market. This trend is especially prevalent in sectors such as finance, retail, and transportation.

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Component Segment Analysis

On the basis of component, the global market is segregated into software, hardware, and services. The hardware segment is projected to expand at a high CAGR during the forecast period, due to its diverse applications in industries and rising demand for automation.

AIDC hardware has applications in a wide range of industries, including retail, healthcare, logistics, and manufacturing. Industries are recognizing the value of AIDC hardware in streamlining operations, improving inventory management, and enhancing overall productivity.

Rising need of automation and increasing demand for real-time data capture and processing are driving the adoption of advanced hardware solutions. This leads to high operational efficiency and accuracy, making them essential tools for modern businesses.

End-User Segment Analysis

On the basis of end-user, the automatic identification and data capture market is segmented into banking, financial services, and insurance (BFSI), manufacturing, transportation & logistics, retail, healthcare, government, energy & power, and others.

The banking, financial services, and insurance (BFSI) segment is anticipated to expand at a robust growth rate during the forecast period, due to the rising demand for smart card technology, revolutionized workflow management, and supply chain operations. Smart cards are a type of AIDC technology that store and process data. They have a wide range of applications in the BFSI sector, including credit and debit cards, access control cards, and electronic ID cards.

The BFSI sector relies heavily on secure and efficient data management, which makes smart cards an essential tool. They provide a secure and convenient method of authentication that enables secure transactions. Growing adoption of smart card technology in banking and financial services is expected to drive the demand for AIDC solutions.

The retail segment is projected to expand at a significant growth rate in the coming years, as it provides efficient inventory management and enhanced customer experience. The retail sector relies heavily on effective inventory management to meet customer demands and optimize sales. Automatic identification and data capture technologies, such as barcode scanning and RFID, play a pivotal role in accurately tracking and managing inventory levels.

This leads to reduced out-of-stock situations and ensures that products are readily available for customers.

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Regional Outlook

In terms of region, the global automatic identification and data capture market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is expected to dominate the market during the projection period, due to advanced technological infrastructure in the region.

North America provides a solid foundation for the adoption and implementation of AIDC solutions. It has a substantial retail sector, which is a key adopter of AIDC technologies for inventory management, point-of-sale transactions, and customer engagement. Presence of major retail chains and e-commerce giants in the region further fuels the demand for AIDC solutions. For instance,

• In August 2022, OmniQ Inc., an IT firm specializing in AI-based computer vision solutions, secured an additional USD 1 million project for a supply chain initiative involving a Fortune 100 retailer with a vast network of over 2300 locations across North America.

The market in Asia Pacific is projected to grow rapidly during the forecast period, owing to the booming retail and e-commerce sectors and growing manufacturing industries. The retail and e-commerce sectors in Asia Pacific are registering remarkable growth, due to the increasing preference for online shopping and the proliferation of mobile devices in the region.

The region is a powerhouse for production across various industries, including electronics, automotive, and consumer goods. AIDC technologies play a critical role in supply chain management, inventory tracking, and quality control processes, further driving the adoption of these solutions in Asia Pacific.

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