June 22nd, 2017

How fast are Retailers adopting RFID?

According to recent news, statistics and insight from industry experts about the apparel business and omnichannel retailing, universal RFID adoption is a done deal within the industry. Or is it?

Recent statistics reported by retail analysts, industry groups and retailers themselves state that RFID usage numbers range from 50 percent to 96 percent. However, these numbers are inaccurate and overly optimistic as the actual pace of RFID adoption is far slower and more methodical than previously thought.

While the aim among retailers to integrate RFID technology into their operations is almost 100 percent, actual deployment of full RFID systems, including tags, readers and supporting software, still lingers in the single digits between just four and eight percent.

With the industry predicting a minimum 50 percent adoption and the reality presenting just four percent, where does this 46 percent gap arise? Firstly, the figures show an inaccuracy of the industry’s estimations and comes down to the word “intent”.

Whilst many retailers have in mind to test and implement RFID technology, the reality is most organisations are planted in the present and the targeted goal remains a complete contrast to current deployment rates.

This is where the statistical confusion of RFID adoption comes from. The statistics broadly adopted by retailers, take into account those in the planning stages of adopting RFID or in the initial trial stage but often in reality only have a few items that are tagged and in circulation within the supply chain. Compare this with the true figure of 4 to 8 percent, which only takes into account the retailers who are fully using the technology and have finished rolling it out.

Mass adoption of RFID systems in retail are still in the very early steps, as actual apparel market penetration is considerably lower than reported by some of those in the industry. For example, GS1 estimates the adoption percentage at more than half, whereas the RFID Lab at Auburn University Retail Study, the retail RFID performance and testing group, puts the installed base closer to four percent.

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