RFID Talk Blog

NXP: 1.7 billion apparel items will be tagged in 2012

It’s the time of year when research analysts update their growth projections for RFID technology. ABI Research came out with its market forecast earlier this week, calling for a total market value in excess of $70 billion by 2015.

RFID chip manufacturer NXP has also released some interesting research on what it considers to be the fastest growing segments of the RFID market.

According to NXP, retail fashion and apparel is clearly the fastest growing use case to date. The company projects that 1.7 billion pieces of apparel will be tagged in 2012, with a 42 percent growth rate through 2015. Aside from inventory accuracy benefits, NXP says that a better consumer experience is becoming a primary reason for deploying item level tagging.

NXP projects that 1.7 billion apparel items will be tagged in 2012.

Indeed, retail executives tell RFID 24-7 that C-level management is most interested in how RFID will improve the customer experience, and places more weight on that factor than improved operating efficiencies.

Another fast moving sector in the consumer products category is wine and alcohol, which is being driven by the need for product authentication in Asia, where counterfeit products are rampant. NXP’s forecast calls for 150 million bottles of wine and alcohol to be tagged in Asia this year, with an 88 percent growth rate through 2015.

NXP calls for near explosive growth in the fast moving consumer goods sector like coffee, where RFID is being used to make sure products are authentic. For example, RFID-enabled coffee pots and RFID-enabled coffee cartridges can prove that expensive specialty brands of coffee are authentic. In addition, commercial users of the product can utilize RFID similar to retailers, to make sure that they never run out of certain kinds of coffee, in effect increasing sales by reducing out of stocks.

NXP sees similar patterns emerging for other consumable categories like printer cartridges and vacuum bags.

“Users want to make sure you have the best consumer experience and preserve their brand reputation,” says Ralf Kodritsch, head of marketing tags and labels for NXP. “If you use a fake coffee capsule, it will taste differently. We don’t stop at the coffee capsule, because through the cloud, the machine also gives maintenance information back through the cloud, so operators know when a machine needs to be maintained.”

About 180 million bottles of alcohol will be tagged in 2012, mostly in the APAC region.

NXP also sees a strong uptick in the electronics sector, where it projects that up to 50 million units will be tagged in 2012, with continuing growth of 65 percent through 2015. The driving force behind tagging this product sector includes product configuration and customization, pairing, authentication, theft protection, and returns management.

By embedding an RFID chip and antenna into the printed circuit board of a laptop or tablet device, RFID can be used for several use cases, including disabling an item when it leaves the factory, and activating it at the store when a purchase is made, or at the home if a consumer orders the product online. This feature is seen as a major theft deterrent, since items snatched from the supply chain would be useless.

NXP says that livestock tagging and the animal ID market will see steady growth of 15 percent, with the potential for tagging 835 million livestock in 2012. Both LF and UHF tags are being used in the animal tagging market, although the UHF sector is gaining ground, mostly due to interest in the Chinese marketplace.

Although the library market remains slow in the U.S., NXP says it has enabled more than 4,000 libraries with RFID around the globe, and projects the potential for 500 million library media resources to be tagged this year. That equates to a 14 percent growth rate.

NXP also sees NFC enabled libraries catching on in Germany, where consumers can check out a book by simply scanning it with their mobile phone. The primary savings for libraries is in labor costs when it comes to book inventories.

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