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IDC: Western European RFID Market Just Starting

Research firm IDC has released a report about RFID adoption in Western Europe that indicates a market in only the earliest stages of adoption. This article recaps the key findings.
Jan 17, 2006This article was originally published by RFID Update.

January 17, 2006—Research firm IDC of Framingham, Massachusetts, has released a report about RFID adoption in Western Europe entitled The Status of RFID in Western European Verticals. The study's key conclusions reveal a market that is only in the earliest stages of adoption.

In the manufacturing, retail/wholesale, and logistics sectors, 12.4% of companies are piloting or planning to pilot RFID. A scant 5.1% are implementing or planning to implement. These numbers are expected to increase, however. According to Giuliana Folco, IDC's research director of European vertical markets, "Over 17.5% of companies in manufacturing, retail/wholesale, and logistics are piloting/implementing RFID projects and more are to come, not only in these sectors, but also in several other industries." The report cites warehousing, logistics management, and distribution activities as the areas most likely to feel an impact from RFID. RFID-compliant applications and servers were named by more than half of the companies interviewed as the "key IT areas" requiring investment with respect to RFID adoption.

Additional findings by IDC show that in Western Europe, as in North America, companies recognize that to truly leverage RFID will require the creation of new business processes and the modification of existing ones. "A rethinking of the entire value chain is essential for the success of RFID projects," says IDC. Second, as in North America, cost is a nagging thorn in the side of Western European adoption, making return on investment elusive. Lacking ROI was cited by a third of the Western European companies IDC interviewed as the "main reason not to adopt RFID."

The IDC report's findings about RFID adoption in Western Europe indirectly validate a trend that ABI Research noted in its 2006 predictions for the technology: the US market's significance will continue despite the increasing internationalization of RFID.

Read the press release
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