Many companies—both those that sell radio frequency identification technology and potential users—seem to be under the impression that adoption, which was slower than most experts originally expected, will remain slow for the foreseeable future. In this column, I will explain why that view is wrong—and next week, I’ll explain why holding onto it could hurt your company.
Adoption of new technologies almost always takes longer than expected. There is a lot of hype early on, after which the technology proves harder to deploy successfully than expected and many companies move on to other projects. Meanwhile, under the radar of the mainstream business press, solution providers improve their offerings. They create products that are easier to deploy, less expensive and more complete.
That alone doesn’t drive adoption. Companies don’t run out and buy a solution just because one exists. It takes time for some to take a chance on the relatively new (but increasingly mature) technology and to prove it works. Once they do, this encourages competitors to adopt, because they don’t want to be left behind. Then more competitors adopt.
Each time there is a new deployment, it causes more companies to look afresh at the new technology. Some will deploy, while others will continue to focus on other priorities. But gradually, the industry reaches critical mass and then everyone adopts.
We are seeing this play out with RFID in the retail and apparel sector. Early on, American Apparel was a lone wolf, the only U.S. retailer to use RFID on all its items to improve inventory accuracy (see American Apparel Makes a Bold Fashion Statement With RFID and American Apparel Expands RFID to Additional Stores). Macy’s and its sister company, Bloomingdale’s, began experimenting with the technology and concluded that it could boost inventory accuracy and improve store execution (see Macy’s Inc. to Begin Item-Level Tagging in 850 Stores, as well as Bloomingdale’s Journey from RFID Concept to Rollout, Part 1, Part 2 and Part 3).
It was several years between the American Apparel and Macy’s announcements. Then Kohl’s announced that it was using RFID (see Kohl’s Rolls Out RFID for Select Product Categories at Its Stores), and then Target (see Target Announces Nationwide RFID Rollout). The interval between announcements is clearly getting shorter, as is the time from when companies first begin looking at RFID to when they deploy it.
In the United Kingdom, the same process played out after Marks & Spencer announced that it would tag all clothing (see Marks & Spencer Expects to Achieve 100 Percent RFID-Tagging by 2017). Tesco, John Lewis and other retailers announced they would do likewise (see Tesco Deploys Tag-Reading Robot at Five Stores to Track F&F Clothing and John Lewis Store to Furnish Its Customers With RFID).
We will see more—and then more—retailers deploy during the next two or three years. At some point, suppliers will begin to tag all of their products, rather than maintaining separate inventories for retailers using RFID and those not doing so. Other retailers will feel the competitive pressure and see tagged goods come into their store. And then, they will move en masse to adopt.
Once all major retailers are using RFID, prices of tags and readers will fall, innovation will accelerate and the technology will have proven its worth. Jewelry, electronics, automotive, sporting goods and other retail categories will adopt the technology. And from there, it will spread into other industries as well, since because prices will be lower, solutions will become more robust and the value will be proved.
How long this will take is difficult to say. It takes time for each new retailer to reach 100 percent tagging. We don’t know how many retailers are far along in their deployment plans and might soon announce their implementation. We also don’t know whether the RFID industry will take steps that will accelerate adoption.
I do believe that the process described above is inevitable, but also that the industry could slow the process down. How? By not aggressively promoting new deployments, by not developing a complete product that meets retailers’ needs, by not making the technology easier to deploy, and by not investing in production capacity to meet future demand.
Adoption is clearly beginning to accelerate in retail. It’s only a matter of time before the pace picks up. Those who think adoption will remain slow for another decade are in for a nasty surprise.
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.