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Apparel Edges Toward the Tipping Point
This year, more retailers announced plans to introduce or expand item-level RFID initiatives, bringing the sector closer to the critical mass needed to propel industrywide adoption.
We don't know how long it will take retailers currently using RFID to tag 100 percent of all apparel, and we don't know how long it will take suppliers to begin tagging at the source. Both scenarios are critical for large-scale adoption of RFID. The faster retailers bring their suppliers on board, the more likely suppliers will integrate RFID into their manufacturing operations and tag all items for all retailers. Once suppliers are tagging all their products at the source of production, retailers not using RFID have an incentive to install readers and use the tags for their own benefit.
We don't know how many retailers are already using RFID in their operations and have not publicly announced their projects or future plans. RFID Journal is aware of several major retail chains worldwide that have rollouts well under way but will not confirm this information for the record. There could be many other retail projects going on under the radar, which would mean we are closer to critical mass than anyone realizes.
RFID Journal believes the pace of adoption will continue to accelerate, with more apparel retailers adopting RFID in 2015. And companies that have already rolled out the technology will expand aggressively. This year, Macy's said its RFID-enabled business lines saw a 10 percent improvement in year-over-year sales compared with lines that were not RFID-enabled. With that kind of benefit, retailers are going to work intensively to get RFID into as many departments as possible.
Certainly, some unforeseen event could impact apparel retail adoption—positively or negatively—during the next two years. Absent that, we believe the sector will reach a tipping point in 2017 or 2018, which will lead all midsize and large retail chains to adopt the technology. And from there it will spread rapidly to jewelry, sporting goods, home furnishing and other sectors.
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