Apparel retailers driving RFID ITL (Item-level tagging)

Apparel retailers driving RFID ITL (Item-level tagging)

A 47-page report issued by ABI Research this week confirmed our own industry forecasts and expectations: With RFID showing its value through positive pilots and research testing, Item-Level T

agging (ILT) is now being deployed very rapidly across apparel and footwear markets.

We’ve been advocating that the time for widespread implementation of RFID at the item level by apparel retailers is “now”—the future of retailing is today. To that point, the ABI report states that “Item-level passive UHF tags now make up an increasing share of the total world market for RFID tags”, forecasting that more than three quarters of a billion RFID tags will be used in global apparel markets in 2011.

Bill Arnold, the principal research analyst for ABI Research goes on to say, “RFID systems allow apparel retailers to get a better handle on inventory, reducing costs and preventing out of stock situations that result in loss of sales. The growth in retail item-level tagging is huge, both in shipments and in total spending. The average growth rate is close to 60 percent for the next three years. In fact, the number of tags that will be used for retail ILT in apparel alone is likely to exceed the total number consumed over the past five years for all RFID markets combined.”

Bill, this is the news we were waiting to hear.

When I first became involved with RFID for the apparel industry in 2007, I was amazed that more retailers were not standing in line

to harness the power of this technology. It’s encouraging to see that now, leading apparel retail chains such as Macy’s, JC Penney, Wal-Mart and America Apparel are setting the pace for establishing RFID systems as the new standard for retail operations.

As Director of RFID for American Apparel, in charge of item-level RFID implementation for this unique 300-store chain, I was on the front lines of the operational shift to ITL. I was fortunate to gain hands-on understanding of both the amazing tracking technology and the internal procedures and challenges of the retail industry. I used these insights to develop a RFID platform specifically for retail, answering the day-to-day problems of retailers and their staff.

With advanced technology, as with other disciplines, experience is everything. When managed correctly, deploying RFID is efficient, and quick. ROI periods for RFID deployments can be as compelling as three to six months. Certain platforms, such as the one I developed at Truecount, require little to no integration, making implementation relatively easy.

So why the hesitation?

According to ABI and Arnold, the economy continues to be a factor. Retail leaders across the globe are still worried about business stability and the flow of credit. While Item-level tagging systems are technically scalable right down to small businesses, the availability of credit can limit implementation by smaller independent retailers.

From my perspective, consumer expectation and demand will accelerate timelines for the widespread adoption of RFID. Consumers want everything to be faster, simpler and customer-concentric. They do not want to encounter “it’s out of stock” or wait while the retailer’s sales staff searches the back room for their size or color. They will support retailers who have what they want to buy when they want it. And with the increasing use of RFID for social applications that blend the real world with the virtual world, consumers know RFID technology is out there and has powerful capabilities. For these reasons and many others, it’s no surprise that RFID apparel and footwear retailers are at the forefront of RFID.

RFID systems provide a better way for retailers to manage inventory and keep customers happy. The visibility into inventory/replenishment activities reduces costs and out-of-stock situations, creating a more ‘complete’ showroom floor and increased sales revenues for stores.

To recap, in announcing their latest RFID findings, ABI Research set the average growth rate for Item-level RFID within the apparel industry at 60 percent through 2013. They project that tag use for ILT in apparel alone is likely to exceed the total number consumed

over the past five years for all RFID markets combined.

Glad to hear ABI say that. I’ve been anticipating this since my introduction to RFID in 2005.

For a look at the American Apparel roll out of item-level RFID under the direction of Zander Livingston, click the link below.

Case Study: Zander Livingston and American Apparel Item-level RFID Implementation