RFID comes of age in retail supply chain

2012 may be a watershed year for radio frequency identification (RFID) technology in the retail sector, according to a new study from the VICS Item-Level RFID Initiative (VILRI), a group of advocates for the use of EPC-enabled RFID in the retail supply chain.

The study, titled “RFID Nears a Tipping Point,” suggests that adoption of RFID is reaching a “tipping point,” with 80 percent of surveyed retailers having initiated pilots using RFID to track item sales in their stores.

The report, which includes input from Accenture and a survey of 58 suppliers and 56 retailers in North America, confirmed that item-level adoption of RFID is gaining traction. Highlights include:



•    Item-Level RFID may be creating a competitive advantage for early adopters by giving them better inventory accuracy, visibility and insight, enabling them to improve in-stock positions and increase sales.


•    For some processes, the technology can now drive improvements several orders of magnitude better than current standard methods. For example, completing a store inventory, once a project of days or weeks, can now be tallied lightning-fast and almost error free. 


•    Costs of RFID tags are falling, and will continue to fall as the rate of adoption increases.


•    Most major apparel and footwear retailers will adopt RFID technology in some part of their business within the next three to five years if recent momentum continues.



“Chain-wide item-level RFID rollouts by some of North America’s largest retailers shows that this technology may soon be broadly adopted by the industry, as businesses making relatively small investments reap benefits ranging from reduced out-of-stocks, increased sales, improved product distribution, access to more customer insights, labor cost reduction and less theft.

The research and business case in our report indicates this will be the future for the sector,” said Joseph Andraski, president & CEO, Voluntary Interindustry Commerce Solutions.