Expect growth for RFID in 2007, expert says

RFID technology moved slowly, but steadily, forward in 2006, says ABI Research’s Mike Liard. Expect more of the same in 2007.

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 12/27/2006

RFID technology made some important strides forward in 2006, according to Mike Liard, research director for RFID and contactless technologies at ABI Research.

“We saw a number of partner-based solutions come available in 2006, with vendors who provide different pieces of the puzzle partnering to provide a total compliance solution,” says Liard.

According to Liard we’ve seen:

• An improvement upon on the performance of tags and readers
• With Gen II, we’ve figured out how to capture the data

Now, “we have to figure out what to do with it,” he adds.

How companies leverage the data they are collecting from RFID – whether it’s data collected in their own operations or data about their product in the retail supply chain provided by a retailer like Wal-Mart – will be at the top of companies’ to-do lists in 2007, Liard says.

“We are seeing a sprinkling of Wal-Mart suppliers talking about the value of RFID,” Liard says. “But we’re still seeing more who are just doing the minimum to comply with the mandate. And we’re still seeing a relatively limited number of stock keeping units (SKUs) being tagged and a limited number of participating distribution centers.”

Still, Liard expects to see healthy growth in the market next year. In part that’s because the industry is building on a relatively low sales base, but in part it’s also the result of interest in closed loop asset management applications.

“The media coverage has all been about Wal-Mart and the Department of Defense (DoD),” says Liard. “But there are pockets of activity around asset management in closed loops, item-level tracking in pharmaceuticals and consumer electronics, and even baggage handling. That’s where I think the growth is going to come from. It’s not from tagging cases and pallets for Wal-Mart.”

Finally, Liard believes the industry will need to pay more attention to issues related to privacy and RFID in 2007.

“As manufacturers and retailers move towards item-level tagging, RFID gets closer to getting into the hands of consumers,” says Liard. “And everything the consumer knows about RFID they saw in the movie ‘Minority Report.’ That’s a potential roadblock to adoption that needs to be cut off at the pass.”