For Clothing Retailers, Item-level RFID on Upswing

By Claire Swedberg

Sept. 16, 2009—In the retail industry, apparel is expected to drive a deployment of item-level RFID tagging during the next five years, according to an ABI Research study entitled "RFID Item-Level Tagging in Fashion and Apparel." ABI anticipates the apparel industry worldwide will spend $44.8 million on item-level RFID solutions in 2009, tripling to $125 million spent on RFID systems for 2014.

The study was based on interviews conducted over the summer with approximately 20 manufacturers, systems integrators and end users. However, ABI's RFID practice director, Michael Liard, notes that the respondents—particularly the end users—were reluctant to share details regarding their use of RFID technology. "As we were doing interviews," he says, "we found that there are lots of nondisclosures, and that's a promising sign." End users, he adds, see their RFID use as a competitive advantage, and are thus unwilling to share their experience with the public.

Michael Liard, ABI Research

In the past, RFID adoption was hindered by the need for larger-volume purchases to drive down the cost of tags, but companies were reluctant to make high-volume purchases until tag prices dropped. Today, there is a new Catch-22. "Adoptions will increase as customers talk more about them," Liard explains, "but customers won't talk more about them" unless adoptions increase.

"We are very thankful for those who have been public about their use of RFID," Liard says, including American Apparel, Marks and Spencer and Charles Vögele (see American Apparel Expands RFID to Additional Stores, Conversation With Avery Dennison's James Stafford and Charles Vögele Group Finds RFID Helps It Stay Competitive, respectively).

These end users' adoptions, Liard indicates, have helped fuel the latest increase of deployments and pilots. It was on these deployments and pilots—which utilize EPC Gen 2 passive UHF RFID tags and interrogators—as well as on interest from end users, that ABI Research based its prediction of a three-fold increase in global sales of item-level RFID systems to apparel companies in five years.