RFID Talk Blog

Footwear & apparel sectors will combine to use more than 750 million item level tags in 2011

Item-level tagging continues to accelerate in the apparel and footwear markets, with those industries now making up an increased share of the total world market for RFID tags. According to a study just released by ABI Research, more than 750 million RFID tags will be used in global apparel markets in 2011.

(Click here to view RFID 24-7’s previous coverage on item level apparel tagging.)

“RFID systems allow apparel retailers to get a better handle on inventory, reducing costs and preventing out of stock situations that result in loss of sales,” says ABI Research principal analyst Bill Arnold. “The growth in retail item-level tagging is huge, both in shipments and in total spending. The average growth rate is close to 60 percent for the next three years. In fact, the number of tags that will be used for retail ILT in apparel alone is likely to exceed the total number consumed over the past five years for all RFID markets combined.”

Major retailers such as Macy’s, JC Penney, and Walmart are leading the charge to make RFID systems commonplace in the retail environment.

Arnold says that the typical ROI times for such RFID deployments are only three to six months, representing a very compelling business case for retailers. However, Arnold says that the global economy is still causing delays in deployments. And a major supplier of RFID systems to the apparel sector recently told RFID 24-7 that a large retailer recently pushed back its deployment schedule by six months.

“The state of the global economy is still creating serious delays in getting money allocated to retail RFID,” says Arnold. “Executives are still very uneasy about business conditions and availability of credit, and while ILT systems are technically scalable right down to small businesses, credit will be the big limiting factor for smaller independent stores.”

A related use of RFID in retail is in EAS (Electronic Article Surveillance) systems: loss prevention tags containing only one bit of data. This segment is led by Checkpoint and Tyco Retail Solutions.

Research director Michael Liard adds, “Retail adoption of RFID at the item level parallels the course barcodes took about 30 years ago. The main difference this time is that retail department stores, not grocers, are leading the charge.”

ABI Research’s new study The Retail Apparel RFID Item-Level Tagging Market” provides current analysis and a five-year forecast of UHF adoption at the item-level in the retail apparel market. It discusses market drivers and inhibitors, along with a summary of the key RFID solution providers and product suppliers.

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