It’s hard to pin down where RFID apparel retailer penetration is when news coverage cites 96 percent of retailers that plan to deploy, while another source says 96 percent are in some stage of deployment.
Dallas, TX (PRWEB) March 01, 2017
Has RFID really conquered the retail apparel world? It depends on whom you ask. While RFID tag usage is growing by double digits annually, the numbers quoted about how many apparel and footwear retailers presently use RFID systems vary. Dramatically.
Statistics reported by retail reporters, academia, and retailers themselves range from 50 percent to 96 percent with provisos of those using the technology versus those who plan to, or are in the preliminary planning stages.
The reality? Actual deployed systems including tags, readers and the supporting software -- where retailers are experiencing measurable results and ROI -- realistically range from four percent to eight percent. This highlights that the market is just starting the rapid adoption cycle.
So, why is the gap so sizeable?
“There is no single industry-accepted set of metrics yet,” says Dean Frew, CTO and SVP RFID Solutions, SML RFID. “It’s hard to pin down where RFID apparel retailer penetration is when news coverage cites 96 percent of retailers that plan to deploy, while another source says 96 percent are in some stage of deployment. So many cookie-cutter numbers are meaningless without more context. The ecosystem structure likely leads to double and triple counting in some cases.”
Discounting the intent and extent of RFID deployment, the numbers drop dramatically -- but still diverge -- when non-profit organizations weigh in. GS1, the international supply chain standards organization, reports RFID penetration for retailers at 57 percent, whereas the RFID Lab at Auburn University Retail study, the retail RFID performance and testing group, puts the installed base closer to four percent.
SML estimates 8 percent
SML places RFID apparel retail penetration closer to 8 percent. It arrives at that number by dissecting public information and mentions of units sold among apparel and footwear retailers with 40 or more stores located in the U.S. and Europe. SML is currently collecting data on apparel retailers in Asia.
SML also examines RFID tag volumes sold by it and other global tag suppliers. SML estimates that the total apparel tag market is between 35 billion to 37 billion tags at the end of 2016. It also calculates there are approximately 200,000 stores in the apparel and footwear market in the US and Europe that will adopt RFID over time. “The percentage of tags consumed by retailers is actually a bit higher than stores deploying RFID, so we took the median number and arrived at 8 percent RFID retail penetration,” says Frew.
A Decade of Growth
The growing installed base of RFID, across a wide spectrum of apparel retailers, shows that inventory accuracy is a broad problem. With the drive toward Omnichannel models, RFID item-level inventory management and the inventory accuracy that it provides will be essential for competing for the future.
“The trajectory in tag growth shows the technology is delivering the desired results, which reinforces the positive demand curve the industry is predicting. A total solutions approach that includes software, tags, fixed and handheld readers, and expert services are delivering tangible and measurable ROI,” says Frew.
“Even with the current demand curve we and other suppliers are experiencing, we estimate it’s going to take at least a decade for RFID to become omnipresent. In the meantime, we are already seeing winners and losers coming out of this early adoption cycle,” adds Frew.
“RFID integration with existing systems can create great value and extend the life of some of these older enterprise systems,” says Frew. “Retailers that deploy the right technology are discovering RFID solutions deliver sales lift and inventory reduction even with the most modest investment. These are big ROI levers that keep industry interest high and adoption numbers growing.”