Survey Shows Half of U.S. Retailers Have Already Adopted Item-Level RFID
The survey, conducted by Accenture on behalf of the VICS Item Level RFID Initiative, finds that if tag prices continue to drop and adoption momentum remains steady, most retailers will be using RFID technology within five years.
Jan 27, 2012—Most major apparel and footwear retailers will adopt item-level radio frequency identification within some part of their business over the next three to five years, according to data derived from a new survey sponsored by the VICS Item Level RFID Initiative (VILRI), as well as adoption rates to date, the survey's authors report. The survey, conducted by technology services consulting firm Accenture, asked 116 retailers and their suppliers a series of questions regarding their use of item-level RFID tagging. The results, published in a report titled "Item-Level RFID: A Competitive Differentiator," indicate that the industry is nearing a "tipping point" in which the technology will be broadly adopted, according to the Accenture analysts who wrote the report.
VILRI is the creation of the Voluntary Interindustry Commerce Solutions (VICS) Association, a consortium of apparel and footwear retailers and suppliers. Joe Andraski, VICS' president and CEO, says the survey results confirmed a trend toward the adoption of item-level RFID technology by retailers and suppliers that he was already aware of, but that has often been out of the public eye. Some retailers have made no secret about their plans to apply passive RFID tags to garments and equip stores with RFID readers, he says, in order to improve supply chain visibility and reduce out-of-stocks, including Macy's (see Macy's Inc. to Begin Item-Level Tagging in 850 Stores). However, Andraski notes, many others have been reluctant to describe those activities publicly. The survey, he reports, confirms that a large percentage of retailers, as well as many suppliers, either are currently using RFID or plan to employ the technology.
During fall 2011, Accenture worked with VILRI to develop a list of relevant questions regarding the use of item-level RFID, and then queried past and present VILRI members. Of those 116 respondents, 43 percent were retailers, while the remaining respondents consisted of suppliers, including goods manufacturers, wholesale firms and vertical retailers (those that manufacture the products the retailers sell at their stores). Fifty-four percent of those interviewed indicated that they earned more than $1 billion in annual revenue. Surveys were completed in September and October 2011, after which Accenture analyzed the results and created the report, which is now available for download at VILRI's Web site.
In addition, more than half of the suppliers interviewed have either piloted or deployed RFID within their own facilities, while approximately 40 percent of that group have also taken part in item-level RFID pilot projects with three or more retailers, and 13.3 percent have done so with seven or more. Sixty percent reported participating in such projects with one or two retailers.
Among retailers that have implemented radio frequency identification, 77 percent reported plans to scale their item-level RFID program to include additional categories or products than what was already being tagged and tracked. About 40 percent of suppliers reported the same goal.
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