May 17th, 2017

RFID Deployment is Overstated, Industry Exec Says

Many bullish assessments indicate US retailers, specifically soft goods retailers, are adopting item-level RFID in huge percentages, anywhere from 50-96%, depending on the source.

Not so, says RFID industry veteran Dean Frew, currently CTO and SVP RFID Solutions for SML Group, in a series of guest columns in trade magazines in recent weeks.

“While the aim among retailers to integrate RFID technology into their operations rates is near 100%, actual deployment of full RFID systems still hovers in the single digits,” Frew recently wrote.

SML’s analysis in fact finds that fully deployed RFID systems, including tags, readers and the supporting software, presently have been implemented at only 4-8% of retailers.

Why such inaccurate estimates? It comes down to the word “intent,” Frew says.

“So many retailers have it in mind to test and install RFID technology. But reality is firmly planted in the present and that goal is significantly different than permanent deployment numbers to date,” he observes.

So if a large retailer has a pilot in a single store, that indicates its interest in RFID (“check” on the survey”), but the sheer volume of tagged items is still low in absolute and percentage terms.

So this must be what is behind the differing estimates. For example, RFID standards and education group GS1 estimates the adoption percentage at more than half in retail, whereas the RFID Lab at Auburn University Retail Study puts the installed base closer to 4%.

That Auburn number is closer to the findings from SML after it worked directly with a number of retailers to assess their RFID status.

But from that small base, true adoption in terms of items being tagged and tracked is growing rapidly, Frew says. Much of that growth results from tagging to support omnichannel commerce, with retailers offering buy on-line and pick up at store, or store-based efullfillment services, both of which require the high levels of inventory accuracy item-level RFID can bring.

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