RFID Grows Up

For years, businesses have adopted RFID for niche applications and tasks, including inventory controls, supply chain management and retail security. However, legacy systems and infrastructure?along with relatively high per unit costs for RFID tags?have prevented the technology from going mainstream and replacing bar codes and other lower-tech solutions.

The situation may be about to change. RFID technology is maturing and wireless networking and connectivity are advancing rapidly. In many cases, RFID is evolving from a standalone solution to a larger integrated solution that fits more organically into enterprise operations. No less important: prices for passive and active tags are dropping to the point where organizations can quickly recoup investments.

Retail and healthcare are among the hottest areas for RFID. Healthcare providers are increasingly turning to RFID to track equipment, tag patients and safeguard infants, and monitor where employees are and whether they?re complying with hygiene requirements and other tasks.

Retailers, lead by Wal-Mart and Banana Republic, are now tracking clothing in stores. Macy?s has announced that it will roll out item level tagging in 2012 and expects to use it in its 850 stores to better manage inventory. American Apparel, which deployed RFID in approximately 100 stores at the end of 2011, has realized significant improvements in inventory accuracy and lowered ?shrinkage? in warehouses and at stores.

Research firm IDTechEx reports that the entire RFID market grew about 3.6 percent in 2011. ABI Research reported that about one-fifth of organizations spent more than $1 million each on RFID in 2010.

However, the emergence of standards and industry consortiums, including Voluntary Commerce Interindustry Solutions (VICS), may provide the boost needed to push RFID across the business spectrum. Not only are participating companies working to develop systems that could function across a wide range of industries, they?re developing a roadmap for future development and identifying best practices.

RFID Journal editor Mark Roberti recently noted that the apparel industry, retailers and others might be approaching critical mass with RFID deployment. ?Once apparel tracking is widely adopted, mass-merchandise stores such as Wal-Mart, as well as department stores such as Macy’s and JC Penney, will move on to other categories. And retailers that sell sporting goods, electronics, books and other products will likely begin adopting the technology as well,? he notes.