The market for retail point-of-sale RFID systems is expected to grow by 35% per year through 2010, when the market will reach $400 million. This forecast comes from researchers at Venture Development Corp. (VDC), who say retailers spent about $88 million for point-of-sale RFID applications in 2005.

Results of the VDC survey show retailers hope to use RFID to better manage inventory. These hopes, however, rely on the availability of cheap, reliable and easy-to-use item-level tagging systems. VDC says the following are needed before item-level tagging can be successfully deployed: Software systems, collaboration among supply chain partners, extensive training, and reasonable cost of RFID technology.

Despite the high percentage growth rate, "item-level tagging will be rolled out slowly," says VDC's Michael Liard. "Current implementation costs-particularly tag prices-are simply too high for widespread adoption."