We generate the majority of our demand with our sales force working together with our partners. So we’re working with them to generate that sales out demand. As soon as they see that tick up again, we’re pretty confident that they will follow with stocking in lockstep to achieve those DIO or days of inventory outstanding targets that we have now really good visibility to and a clear understanding with them as well as incentives in place for them to reach those. So it’s really generating that demand and seeing it. We think the inventory will just follow.
Andrew Buscaglia: Okay. Very clear. And your two biggest markets, e-commerce and retail versus transportation and logistics, are you seeing any difference in the demand trends and dynamics driving those two areas. I guess, what is the key difference for you? Is one starter than the other, is one more likely to come back faster than the other. Yes, I guess could you parse that out?
Nathan Winters: Yes, Andrew, I would say they’re tied a couple pretty tightly together, especially when you consider e-commerce versus buy online and pick up in store or brick-and-mortar retail. So I’d say e-commerce and trans logistics tied together because of really parcel delivery. And I think in that case, both had built out e-commerce providers and transportation logistics built out significant network capacity across everything they did, their networks, their capacity around logistics and others to be able to meet the demands during COVID, which now kind of reset to pre-COVID levels and are going to grow from there. And I think you’ve seen moderating demand across e-commerce overall. So I think those two are tied together.
I think brick-and-mortar retail, think of in-store, I think that’s really more tied to the goods economy. So goods versus service-based economy, which is still relatively challenged. So I’d say e-commerce and translation districts tied hand-in-hand, brick-and-mortar retail, a little bit more goods economy focused. I wouldn’t see much difference in those two. The recovery really is going to be driven by using up this excess capacity we talked about or and a recovery from more positive signs in from an economic perspective overall for those markets to come back.
Joachim Heel: Maybe there’s one area that you could see a slight additional opportunity on the retail front. And that is, of course, the one area where they don’t overlap, which is the store. Retailers have been itching for some time, and we have had this vision that you can significantly improve the productivity of a retail store by having all of the workers in the store connected and collaborating. And they haven’t yet realized that vision. That’s been part of what’s been deferred as they’re going through the current phase of pausing and spending and scrutinizing their budgets. But they really do want to do that. I hear that from retailers all the time that they believe that there’s a big productivity improvement to be had there, in particular, because some of their peers have done it, and they have seen those improvements.
So that part of spending is still out there and it I’m convinced it will come our way, and that will create an additional demand on the part of retailers with stores that transportation companies don’t have.
Operator: And our next question comes from Rob Mason from Baird. Rob, please go ahead.
Robert Mason: Yes, good morning all. I wanted to maybe just probe again, your thoughts as we get into ’24 and not the put a stake into the ground at midyear ’24. But I’m just curious, as you think about normal replacement cycles, how would your average age of your installed base look midyear next year? Would it be at an average level or below average, above average?
Bill Burns: Yes, I’d say that, Rob, what we said is we’re not guiding to 24% as we’ve talked about before. I would say, again, from a color perspective, that on average, I guess, it would be the same. What we’re seeing today is our customers sweating some of their assets longer than they normally would. They can only do that so long. Devices get older, they want to use more applications requiring faster processor speeds, more memory, you see OSs moving forward, so security and others. So there’s reasons for them to upgrade those devices over time. Could they sweat them for a certain amount of time, yes. But then eventually, that kind of comes our way, and they go ahead and upgrade. So I would say average life cycle of demand in second half, nothing changing there.
We’re working closely with our customers to make sure we understand their refresh cycles. And I think that while there’s very little visibility in the second half of the year, I think the biggest thing to remember is we’re going to cycle compares that are easier and this destocking moves away. So I think that’s positive. But I would say average number of refreshes out their average length of the devices in service and today, customer sweating assets.
Joachim Heel: Maybe I’ll give you a two data points to support that. One is in Q2, the pushouts that we had in Q1 tripled. And in Q3, the pushouts were about the same as they were in Q2 which was almost the same as what we had in the entire year of 2020. So you can see that there’s a lot of demand being pushed out, and those are all refreshes that should be happening now to maintain the average life of our estate out there. And so the average life of our estate is likely going up. And at some point, and that’s what we said a couple of times already, sorry to repeat it, is that at some point, they will have to buy and refresh those devices.
Robert Mason: Understood. That’s good color. Bill, I wanted to go back to one of your earlier comments in the opening remarks. I thought I heard you mentioned a shift in go-to-market resources. And I was hoping you could put a little more color around that. And maybe just jointly, you talked about also accelerating growth in some of these underpenetrated markets, and I’m just curious if there’s a connection there. And how are those underpenetrated markets performing right now relative to some of your more traditional markets?
Bill Burns: Yes, I would say that manufacturing is a good example of that. It’s has been less impacted, still down significantly year-on-year, but less than other markets. That is an opportunity we’ve talked about earlier in the call. I think there’s other markets. Japan is an area that we’re investing additional resources as well. And we’ve won a large postal opportunity there and the largest retailer in Japan most recently, and we’re leveraging those wins and larger partners within Japan to do more business within Japan. Government is another area that we haven’t had a lot of focus on in the past, but there remains opportunities for us to grow our business within government. I think from a product perspective, we talked a bit about RFID and machine vision as fixed industrial scanning and machine vision around inspection, but also RFID around automation and digitizing and automating customers’ environments.
