Back in 2002, when I first started RFID Journal, I noticed a significant number of people from the U.S. Department of Defense (DoD)—easily identifiable by their .mil email addresses—signing up for our free electronic newsletter. I thought it was a bit odd, until the DoD announced that it was joining the MIT Auto-ID Center’s effort to develop low-cost, passive UHF RFID to track goods in the supply chain.
I learned then that the RFID Journal database could provide clues to emerging trends in the RFID industry. During the past few months, I’ve noticed an increase in three groups signing up for our newsletters: apparel manufacturers, bar-code resellers and integrators, and financial firms. All three indicate the RFID industry is maturing and growing. Let me explain why.
The first group that has been signing up for our newsletters in greater numbers is apparel manufacturers. We have seen an influx of such companies from the United States, Europe, Latin America and Asia (particularly Pakistan). This suggests that RFID is being pushed back in the supply chain to the point of manufacturing. Retailers have been asking suppliers to tag goods, and now suppliers are asking their third-party manufacturers in Asia to place the tags on goods.
This is a good sign, because RFID cannot be used on a large scale unless goods are tagged at the source—and tagging at the source means apparel suppliers can benefit. They can confirm orders being shipped out of factories in Asia or Latin America. They can receive goods into their warehouse more efficiently, pick the right goods when an order comes in and conduct audits on all shipments in order to ensure shipping accuracy and reduce chargebacks.
Companies that resell bar-code hardware and install and support bar-code systems showed some interest in RFID early on, when there was a lot of hype around the technology. But these are mostly small to midsize companies operating on lean margins. When RFID failed to take off quickly, they fled the market and went back to their core business.
The question is: Why are they returning now? I believe it’s because they are being asked by their customers about RFID. This is what two of them told me anecdotally. That’s a good sign, because it means a growing number of companies believe RFID is the solution to the problems they are having with tracking containers, tools and other assets.
I’ve also seen a growing number of investors—venture capitalists, private equity groups and hedge-fund managers—signing up for our newsletters. This is due, I think, to Impinj’s successful initial public offering. Investors now see that the RFID market is growing and that there is a viable exit for investors, and they are looking for companies to invest in. Again, this is a good sign for the RFID industry.
All signs are pointing to greater RFID adoption in retail and in many other industries. Things will become really interesting after we reach the tipping point.
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.