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The Next Challenge for the RFID Industry: Rapid Growth

The technology adoption life cycle isn't a smooth upward curve, and that will present problems for users and providers of RFID technologies.
By Mark Roberti

What should companies do? My advice to potential users of RFID, particularly in apparel retail, is to begin exploring the technology now. Get a pilot going and identify reliable providers of RFID hardware, software and services. That way, you will have an understanding of the technology, some internal expertise and some outside companies with which you can work. Don't wait until your competitors announce major rollouts before you begin thinking about using RFID.

RFID vendors have more difficult decisions to make. They have to manage their burn rate, and if they invest too much in capacity and it doesn't materialize, they will face a cash flow crisis. I would advocate increasing marketing budgets in select markets that are seeing growth. Building brand is going to be important as adoption accelerates. Continue investing in product improvements and partner to create a whole product.

Spending limited marketing dollars wisely can help create brand awareness in a particular market, so when a company—say, a medical device manufacturer—wants to use RFID, it thinks of your tags or software. Right now, very few RFID companies have much brand awareness, so the market is wide open for any company to become the "gorilla" (the dominant player) in a particular industry.

Targeted marketing can lead to sales, which can be reinvested in either capacity or more marketing. There's another benefit as well: If you need to raise funds, venture capitalists are more likely to invest in a company that has brand awareness in a target market.

RFID Journal has been investing in preparation for growth. We built a custom content-management system for our news and events sites, and moved all of our sites to a cloud-based architecture. If traffic had ramped up with our old, server-based system, the site would have crashed quickly. Now, we can handle any spikes in traffic. We are planning new non-English sites, but will need to manage our investments in the same way vendors need to manage theirs. So I understand the challenges. The important thing is to recognize that growth is coming and that it will be rapid, and to try to be prepared.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog, the Editor's Note archive or RFID Connect.

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