It’s hard to believe that it’s been five years since RFID 24-7 launched just after Labor Day in 2008. The industry has come a long way since then, as has our website, which has developed a strong and loyal global following.
Glancing through the RFID 24-7 archives, a lot has changed over the past 60 months. At the outset, much was written about standards development, privacy concerns, pilots, and what was in store for companies brave enough to deploy RFID. As the technology matured, our coverage changed drastically. Standards are mature, although still evolving. The term “pilot” is passé; most companies now refer to deployments and full scale rollouts.
“Looking back five years, I’m not sure I’d have predicted how far down the road we are right now,” says Dr. Bill Hardgrave, Dean of the College of Business at Auburn University and the founder of the RFID Research Center. “We were well into Gen 2 technology, but I’m not sure we’d have predicted how widespread RFID has become.”
Another big change has to do with how and where RFID is being used. Retailers were just discovering that case and pallet tagging wasn’t the pot of gold they once perceived it to be, and that item-level tagging was the real sweet spot.
“We were coming out of this mindset that it’s not pallet and case tagging but item level, but can we really do this and how is it going to work,” Hardgrave recalls.
What’s in store?
Item-level tagging with passive UHF tags at the retail level has clearly driven RFID adoption over the past several years. Other industries have begun to adopt after seeing the inventory visibility success story in retail. That holds especially true in the healthcare sector, where applications like patient tracking, asset tracking, hand washing monitoring and automating the pharmaceutical supply chain are saving hospitals tens of millions.
Clearly, the days of RFID as an expensive science experiment are gone. What’s in store for the next five years? Only a crystal ball can answer that question with 100 percent accuracy (or even 98 percent). Consider that new use cases for RFID are unveiled almost every day, many of which were not even on the business development radar six months ago.
When RFID 24-7 launched in 2008, most businesses were still trying to figure out how to use Facebook effectively as a marketing tool. Now, RFID is deeply integrated into social media apps, greatly enhancing consumer engagement and brand awareness. Looking forward, most professional teams will have RFID-enabled tickets within several years, allowing seamless entry into the park, an easier method to purchase items, and enhanced social media apps. When the staff photographer at Fenway Park snaps your photo during a Red Sox game, RFID-enabled tickets or lanyards will give fans an opportunity to purchase the photo and post it to social media channels instantaneously. Major league baseball is already looking into this option.
When RFID 24-7 celebrates 10 years of publishing in 2018, RFID will be embedded in all retail locations. Omnichannel retailing, quickly growing out of the infancy stage, will be commonplace, allowing consumers to purchase goods online and specifying their mode of delivery – same day service or pickup at a nearby retail outlet. In fact, omnichannel will be so prevalent that the term will follow others in the RFID dictionary, like “pilots,” into the graveyard.
By 2018, the retail inventory accuracy provided by RFID will be commonplace. Gone will be the days of knowing only two-thirds of the inventory in a certain store. Other apps, like self checkout, RFID enabled fitting rooms and mirrors will enable consumers to shop more conveniently while driving sales for retailers. It’s also a safe bet that RFID will put a major dent into shrink, especially internal theft. Retailers like American Apparel are already seeing gains in this area, and a major French sports retailer just deployed RFID with loss prevention are the primary business case.
10 billion passive UHF tags
Retail will drive much of the growth expected in passive RFID over the next five years. According to VDC Research, passive UHF RFID systems (tags, readers, printer/encoders, software and services) are expected grow at a 19.7 percent clip between 2012 and 2017. The passive UHF RFID market will likely surpass $1 billion in 2015 or 2016.
Mike Liard, vice president of auto-ID at VDC, expects nearly 10 billion passive UHF RFID tags will ship by the end of 2017, driven mostly by retail apparel and other high-volume applications such as anti-counterfeiting and other non-apparel item-level tagging in retail, like electronics and cosmetics.
“Within the RFID ecosystem, the passive UHF market, in particular, has made much progress over the last five years,” says Liard. “Technology performance and price points have become more attractive, new applications and use cases have and will emerge, and product innovation continues unabated. The future market will be shaped by increased adoption, total solution development, Internet of Things enablement, and a strong focus on leveraging the data being captured by passive UHF RFID systems.”
While RFID-enabled driver’s licenses were recently rejected in California, they will become more commonplace once privacy concerns are ironed out and the benefits to consumers are more clearly understood.
Healthcare could be the biggest adopter over the next five years. If retailers are able get a fair ROI from placing a 10 cent tags on a $100 pair of jeans, just imagine how healthcare providers and suppliers can benefit from tagging critical assets and implantable devices that cost $1,000 or more.
According to research firm TechNavio, the global RFID market in healthcare is expected to grow just under 30 percent per year between 2011 and 2015, driven by continued adoption in the pharmaceutical segment. Hospitals are reaping huge savings by deploying RFID to track assets and to streamline the supply chain process, in many cases eliminating costly inventory in favor of a consignment approach.
Research firm IDTechEx says that the entire value of the RFID market in 2012 was $7.67 billion, up from $6.51 billion in 2011. This includes tags (passive and active), readers and software/services for RFID cards, labels, fobs and all other form factors.
“Five years ago the trajectory of and vision for the RFID market could be described by using the Dr. Seuss book title Oh, the Places You Will Go,” says Liard. “Today, it is more fitting to talk about how far we have come. And, in looking ahead, I believe the market holds much promise as the technology will become a critical success factor for many enterprises, governments, and retailers looking to improve their operations, shape the lives of citizens and consumers, and compete effectively in their industries.”