10 Predictions for 2009

By Mark Roberti

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1. The slowdown in the global economy will increase RFID adoption. Companies under pressure to reduce costs as sales slow will look for RFID applications that can deliver a return on investment in 12 months or less. We’ll see growing use of RFID for tool tracking, asset tracking and other proven internal applications.

2. Sam’s Club suppliers will use the economic slowdown to push back against tagging requirements, and fewer than half will be tagging sellable units by October 2009. Most suppliers see RFID as an additional cost rather than a benefit. The slowdown in the economy will hurt their sales, so they won’t want to take on a perceived additional cost that will hurt margins. Expect a lot of foot dragging. Given the complexity of tagging sellable units, nothing short of Sam’s Club threatening to drop suppliers that don’t tag will get suppliers to tag, and Sam’s Club would need to do that soon if suppliers are going to have time to prepare.

3. Wal-Mart will encourage suppliers to tag more stock-keeping units. Wal-Mart is running a large trial to determine whether tagging all cases in certain categories will improve perpetual inventory and thus sales. If successful—and signs are that it will be—it’s likely that Wal-Mart will encourage suppliers to tag all cases within specific categories.

4. RFID will gain ground in the apparel sector. There is a growing understanding among apparel manufacturers and retailers that the ROI from using RFID to improve inventory management is huge. Expect to see a growing number of pilots and some rollouts in this sector.

5. RFID will take hold within the data center. Major banks want to create standards for tagging servers and other assets in the data center. They will require manufacturers to place tags on products before they’re shipped, which will encourage other companies to use RFID to track data center assets.

6. RFID will continue to gain momentum in the health-care sector. Tracking assets within hospitals has proved to deliver benefits. Health-care providers will continue to deploy the technology tactically for applications that deliver a quick ROI.

7. Europe will continue to lead adoption across many applications. Metro Group, Airbus, European governments and others have led the way for the past year or so. Europe will maintain its pioneering position among those using RFID and Near Field Communication (NFC) technologies for transit, apparel tracking, retail, manufacturing and other applications.

8. Consumer applications will gain more traction. Retailers, theme parks, ski resorts and other enterprises will look to deploy more RFID applications that make the consumer experience smoother. We’ll see loyalty cards and the use of RFID to facilitate access to products and services.

9. More companies will deploy RFID to secure high-value products in the supply chain. RFID can help reduce internal theft by keeping track of which employees handle high-value products and by linking RFID to video surveillance systems. It’s an easy way to reduce losses, and the cost of deploying the technology, particularly with reusable totes, is not high.

10. RFID sensors will drive additional value for end users. Expect to see increased use of RFID tags with temperature sensors to monitor perishable items, ensuring foods stay fresh and pharmaceuticals are refrigerated at required temperatures.