RFID boom fails to materialise
Retail sector reports stalled growth
This year's expected rise in take-up of radio frequency identification (RFID) technology within the retail industry has failed to materialise, according to analyst IDTechEX.
Chief executive Raghu Das says its research into the progress of RFID in 2006 found limited pallet and case tagging due to technical problems and price issues.
But he says other sectors, including the airline industry and government institutions, expect to be among the biggest RFID users in the next few years.
Das says pallet and case purchases amounted to as little as 250 to 300 million tags in 2006, less than niche industries like mail and cow tagging.
‘Retail will eventually be the biggest market by far for RFID, but consumer goods companies are yet to see sustainable paybacks,’ he said. ‘The real opportunity for them is with item level tagging.
‘Retailers tag the pallets and cases of the highest volume products they sell (but these) tend to be those which are lower value and lower margin and therefore most don’t get a payback.’
Das says the airline industry expects to tag ever more of the two billion items of luggage it handles each year as well as tools and items during aircraft manufacturing.
Contactless smart cards will also be among the biggest markets, with the UK National ID card scheme likely to surpass the China National ID card scheme as the biggest RFID rollout in the world.
There is also continued growth in the use of financial cards, such as Visa, MasterCard and American Express, for contactless payment.
The US remains the largest adopter if RFID, but the UK has maintained second place in terms of recorded projects, ahead of China, Korea and Japan.
Das says RFID tag sales will likely rise from 100 million 2007 to 450 million in 2010.
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