Impinj, Inc. Common Stock Piper Sandler 5th Annual Growth Frontiers Conference

Yeah. So our opportunity starts everywhere you see a barcode. You might ask, why are you revolutionizing the barcode? Barcodes are free to add, but barcodes are expensive to read. You need to have line of sight, you need to have proximity to the item, and you're reading one at a time. With our ICs, you're reading up to 3 feet away, without line of sight, thousands of items a second. The IC is literally smaller than a grain of sand. It's energy harvesting, which means it's battery-free and has effectively an unlimited lifetime.

Yeah. Rough and tough, we see the market opportunity at 10 trillion units, to which we're less than half a percent penetrated today. The four verticals that we focus on primarily are apparel, which is 80 billion units a year, general merchandise, 325 billion units a year, supply chain and logistics, 400 billion units a year, and food, which is multiples larger than all three of those other verticals combined. The industry has been growing since 2010 at a unit CAGR of around 20%-25%. Impinj's CAGR over that time has been 26%.

Yeah. Apparel is the most mature market for us today. By volume, we're probably 40% penetrated to that 80 billion units. In supply chain and logistics and general merchandise, we're low single digits penetrated, but we have the largest players in those respective categories moving forward first. In general merchandise, it's led by Walmart. In supply chain and logistics, it's led by UPS. Food is no penetration to speak of today. We're delivering modest volumes into those opportunities with big players, but it's still early days in food.

Every timeline across customers is different, but they all share some commonalities. Typically, they start with a single use case. They get that deployed, they get a base ROI earned, and then they start asking, where else can I deploy this RAIN RFID to extract even more ROI? So in apparel, it typically starts with handheld readers checking inventory at the store level. Then once those retailers reach 100% tagged, they unlock a whole bunch of new use cases. They can then go to loss prevention, to self-checkout, to front-store/backstore management, to smart fitting rooms. As they move to those different use cases, they're extracting even more ROI.

The sales cycles are typically long. They will start out with a single store pilot just to prove out the use case. Then when they have the use case proved out, they go to what we call the controlled deployment. It is a small portion of their overall footprint, where they are proving out the ROI at scale, and they are working out any kinks that they see. Then once they prove out that ROI at scale, they work out the kinks, then they go to a broad rollout, which is typically measured in multiple years. While it is a long sales cycle, what we see is once a customer, any customer, makes a move forward, they never turn back.

Yeah, for sure. Back in the early days, Macy's had an apparel deployment and a handful of other categories. Macy's was able to take out $1 billion from the inventory because they were able to see down to every item on the store floor. They were also able to achieve nearly 10% same store sales lift because they knew what was on the shelf, and more importantly, what was not on the shelf. That is a pattern we typically see. The base ROI always starts out with labor savings, and then it quickly translates to sales uplift because of the visibility that the RAIN RFID tags provide.