The rise of omni-channel retailing is driving fast growth for RFID technology within the retail sector. A new report from Frost & Sullivan predicts that omni-channel and other factors will push the market for RFID in retail to $5.4 billion by 2020.
Ram Ravi, the author of the report, says that RFID in retail was valued at just over $540 million in 2014, as major retailers like Macy’s, Kohl’s and now Target unveil tagging strategies. The Frost & Sullivan report covers middleware, hardware and tags.
“RFID’s ability to increase transparency across the whole supply chain has been one of the key reasons behind its strong adoption among retailers globally,” says Ravi.
“By using this technology, retailers can track and trace goods as well as identify any bottleneck in the supply chain and address it immediately.”
Last month Target unveiled its long awaited plans for RFID, which call for it to have all 1,795 stores up and running with RFID by the end of next year. Target’s massive deployment will start with women’s and children’s apparel and home décor items. Industry analysts estimate that the rollout will consume a minimum of one billion tags in its first year.
While improvements in RFID technology drives the likelihood of adoption among retailers, Ravi says that the lack of knowledge about some RFID products and the fear of compromising customer-related information pose a challenge to market progress. Also, issues pertaining to consumer data privacy and security can slow down the pace of market development.
“As the market for RFID in retail is still nascent, participants need to showcase the benefits of their products to customers through training and tradeshows,” noted Ravi. “Additionally, emphasis on offering a wide range of RFID products and strategic services to gain a competitive edge in the market is important.”