RFID Talk Blog

RFID retail apparel tagging set for explosive growth

Tremendous global demand for apparel tagging is expected to continue for many years as US retailers like Walmart, Macy’s and JCPenney ramp up item level tagging efforts. The technology received a noted boost this week when JC Penney officials confirmed that the chain is pushing tagged denim products, bras and shoes out to all of its 1,100 stores. Previously, Penney had only discussed a small 33-store trial.

(Click here to read RFID 24-7′s previous coverage on the retail RFID market.

Patrick Javick, vice president of Industry Engagement at GS1 US, says that GS1 is seeing increased activity in all the countries that the organization represents. “We’re starting to see massive growth in apparel,” Javick said at this week’s RFID Forum held at the University of Arkansas. “There is a lot of activity that we know about that we are just not authorized to speak about. The interest in apparel from other countries has skyrocketed.”

During a recent trip through Germany and France, Javick said that it has become apparent that vendors in the EU are now the driving force behind RFID. “In Europe it is the brands driving the activity, looking at it from within their own four walls as well as their own retail stores,” he said.

Research firm IDTechEx recently predicted that apparel tagging alone will consume approximately 20 billion RFID tags annually within the decade, creating a market of $1 billion for tags annually in 2021. In addition, $670 million per year will be spent on RFID infrastructure for apparel in 2021, up from $80 million this year.

During the final panel discussion at the RFID Forum, JC Penney vice president of operations Frank Cassara took the group by surprise when he confirmed the rollout to all 1,100 stores and relayed his goal of reaching full deployment within four years. Speaking as a member of the audience, Cassara said that the JC Penney stores that have deployed RFID have not seen double digit sales gains from the technology, but said that RFID is still well worth the investment. Cassara confirmed those remarks with RFID 24-7 following the meeting.

That revelation could lead to increased adoption, as retailers that are still on the fence about deploying re-consider their business cases that called for larger sales uplifts to achieve ROI.

“There is this fallacy out there in the marketplace that you need to hit 15 points, but you don’t need all these huge revenue numbers that people are talking about,” said one attendee at the RFID Forum. “Even with a five percent sales uplift, you have about a seven or eight month payback. This can pay for itself with relatively small revenue uplift. For me, that point is lost with a lot of people in that they have these lofty expectations of 15 percent sales gains.”

Retail item level tagging isn’t stopping at apparel goods. Javick noted a high level of interest in a diversity of applications, from automotive in Germany, to oil and gas in Finland, to farmers in New Zealand using EPC to track items from field to the store shelf.

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