The total market for RFID goods and services will climb to $9.2 billion this year and will approach $20 billion by 2018, according to new data produced by market research firm IDTechEx. Those figures include all frequency tags, readers, software and services.
In a webcast this week, IDTechEx CEO Raghu Das outlined the top four segments driving growth — retail apparel item level tagging, asset tracking/inventory, transit ticketing and animal tracking.
Retailers deploying RFID generally see sales gains between 4-20 percent without increasing stock levels. Despite major rollouts by Macy’s, Kohl’s and Marks & Spencer, (which will use 400 million tags alone this year) item level apparel tagging has barely scratched the surface.
Retailers will consume about three billion tags in 2014. The total apparel market represents about 40 billion clothing and accessory items annually.
By 2024, IDTechEx says that the retail market will be worth $8 billion, representing 27 percent of the total market. By comparison, retailers spent about $400 million on RFID technology last year.
“It’s a healthy sign that there will not be any one major dominant market,” says Das. “The use of RFID will be fairly well spread out throughout a number of markets.”
Asset tracking applications will consume 500 million UHF tags this year as enterprises leverage the high performance now available from low priced UHF tags. Applications are diverse, ranging from 10,000 up to a million tags per location. ROI for asset tracking usually occurs in less than 12 months.
The IDTechEx research predicts that the transit sector will consume 700 million HF tags in 2014. The Moscow rail system is one of the largest users in the world, accounting for between 25 and 30 million tags each month. The research firm also expects strong growth in animal tracking as government mandates for trace and track continue to expand.
IDTechEx says that 26 billion RFID tags have been sold since RFID first became commercially available in 1943. Of that number, 25 billion have been passive tags, with another one billion in the active/RTLS category.
Six billion passive tags were sold in 2013, and another four billion in 2012, providing a strong indication of the ramp up of the technology over the last two years.