The retail industry will consume about 13 billion UHF RFID tags by 2018 as strong growth continues, fueled mostly by apparel tagging. According to a new report by ChainLink Research, about 6.5 billion UHF tags will be sold in 2015, two-thirds of them for use in retail. That’s up from 4.9 billion in 2014, representing a 27 percent growth rate.
The ChainLink report expects retail RFID tag consumption to grow 34 annually over the next three years as additional stores deploy the technology and existing users like Macy’s and Target expand tagging to more product lines.
“There are now dozens of examples of retailers generating revenue and gross margin improvements by using RFID to improve inventory visibility,” the report states. “With only a small percentage of suitable apparel items being tagged, we expect growth to accelerate as these use cases move into the steep part of the growth curve with new retailers joining the ranks of users, as well as current customers tagging more apparel.”
The report predicts that the industry will exceed 10 billion UHF chips sold annually within two years, and will ship just under 100 billion chips cumulatively during this decade (2011–2020). In March, Impinj announced that it had sold its 10 billionth UHF, or RAIN RFID Monza chip.
About 4.2 billion retail items will be tagged this year, less than 10 percent of the global total of apparel items for which RFID makes economic sense (estimated at about 50 billion units). Depending on adoption in other retail categories and in non-retail, the total addressable market for tags should easily exceed 100 billion units.
The report also says that the next big use case for RFID remains to be seen.
“Many want to know what the next use case will be that will create the type of growth in UHF tag consumption that retail is currently experiencing,” the report says. “As of now, there are some candidates (such as healthcare), but nothing appears to be imminently about to take off at that same pace that retail has.”