RFID: Setting Fashion on a “Fast Forward” Trajectory

Recently, I participated in the “RFID Gets Fashion Fast Forward” panel at MIT Enterprise Forum. This high-energy, thought-provoking event brought together a diverse group of individuals from the academic and business world, including professors, entrepreneurs and creative thinkers. The common thread was an interest in RFID technology and application. Based on the types of questions asked—many directed at me—one key take away from the event is that RFID is entering the mainstream. The forum attendees all seemed to understand how RFID works to improve inventory accuracy and supply chain visibility. The questions were not focused on what RFID can do. The rapid counting and near perfect accuracy are now taken for granted. Instead, our audience wanted to know more about the practical aspects of implementation. How much does it cost, and what’s involved, to deploy a pilot? How are tags priced? What are the next retail applications, what are the limitations of the technology, and how do you manage the large amounts of data captured by RFID?

I can’t cover all the answers here, but it was agreed that it’s becoming less expensive to get started with RFID. Tag prices have dropped to roughly a dime, depending on volumes. With the cost for tags, readers and other hardware components coming down, there has never been a more compelling or more opportune time to launch a pilot.

Housewares and consumer electronics are thought to be the next hot items for tagging. It was also interesting to me to hear some of the applications people are looking to use more widely with RFID, such as locking mechanisms, electric powered city transportation vehicles, bikes, cars and other vehicles.

One of the most difficult questions asked was how will businesses merge RFID with NFC. A dual tag was mentioned, however, high costs and compatibility concerns suggest that a single tag/single platform might be better. I will address this issue more fully in a future blog.

My fellow panelists were Paul Arguin, senior director of RFID development for r-pac and Jerry Glinnen, compliance manager for Lifetime Brands. Jerry spoke about the mandates issued by big box retailers and about bringing the tagging upstream to the source. Jerry is a supplier for hundreds of retailers, including JCPenny, Macy’s and Kohls. Although JCPenny has temporarily withdrawn from the RFID arena, Jerry’s group is still tagging for Macy’s and starting to ramp up in a major way for Kohls. His observation is that retailers are increasing the number of SKUs set to be tagged each year—a fact supported by data from the field and what we are seeing at Truecount as more and more leads and requests for proposals come through to us.

The lower cost of deployment plus advances in software like Truecount’s RFID Essentials are heating up the RFID market even more. We are seeing a new understanding of RFID as a strategic business tool as well as a new urgency to capture the bottom line benefits RFID delivers.

Up and down the supply chain, RFID continues to be a hot topic. Retailers of every size are already onboard with large scale deployments. Still some retailers, including category leaders, are lagging behind, taking a wait and see approach. What I experienced at the MIT forum was a sense of collaboration with store owners looking to their peers for validation of RFID performance. We have been documenting results from testing, in-store pilots and case studies for over a decade, and the facts completely support RFID as a tool for gaining maximum inventory efficiencies. There is no refuting the evidence showing significant savings in time and labor when RFID is applied to inventory management. Everyone concurs that compared to bar codes, RFID demonstrates a 96 percent reduction in time required for inventory counts.

Michael Liard, vice president Auto-ID & Data Collection, VDC Research, who moderated the event and directed the flow of questions, has been researching RFID and many of my projects over the past 10 years. Although, he said he would never try to predict when RFID will cross the chasm, his work reveals a steady upswing in applications, most specifically within the retail industry. Listening to the lively discussions at the MIT forum indicates to me that we may already be on the other side. Do you agree? We invite your feedback on where RFID is heading next, or if we have reached the tipping point. Have a question, post it here or email success@truecount.com.