Jul 27, 2014In mid-2003, when I was still the only employee at RFID Journal, I noticed a large number of people with U.S. military e-mail addresses (.mil) signing up for our weekly newsletter. I wondered why there was such a sudden influx from that particular organization—and then, shortly thereafter, the U.S. Department of Defense (DOD) announced plans to follow the lead of Walmart and others and ask suppliers to begin putting passive ultrahigh-frequency (UHF) RFID transponders on shipments (see U.S. Military to Issue RFID Mandate). It dawned on me that our database is a leading indicator of trends within the radio frequency identification industry, and I have tracked subscriptions by industry ever since, to see where adoption is picking up and where it might be slowing.
I often share this information with RFID technology providers to help them understand the changing market dynamics and do a better job of focusing their marketing efforts. There have been several distinct trends during the past year, so I thought I would share them with our larger audience.
An increase in activity across the board. We are seeing more visitors to our website this year, as well as more premium memberships. This suggests a growing interest in using RFID technology to address business issues. Many of the RFID solution providers with whom I have spoken this year report that they are seeing increased interest and have more deals in the pipeline. This tells me the market has matured to the point at which many companies understand that RFID has matured and can be used to increase efficiencies, cut costs and deliver other benefits.
An increase in retailers. We have seen a noticeable increase in the number of subscribers from the retail sector. This is not a huge surprise, given that some large retailers—Marks and Spencer, Macy's, Kohl's, Bloomingdales and, most recently Zara (see Tyco Wins Chain-wide Contract From Inditex and Inditex CEO Announces RFID Expansion Plans)—have announced plans to use RFID to track unique items. And it's not just apparel retailers. We are seeing companies that sell jewelry, home-improvement products, sporting goods, furniture and office equipment become interested in RFID as well.
An increase in aerospace companies. Airbus is one of the largest early adopters of RFID (see Airbus Leads the Way), and Boeing has been talking about using RFID for parts marking for the past decade (see Boeing's RFID Plan: The Sky's the Limit and RFID Takes Off in the Aerospace Industry), but until recently, we haven't seen a lot of other aerospace companies jumping on the RFID bandwagon. That's beginning to change, and I think it is a sign that Airbus' efforts to tag more parts is getting through to its supply base.
An increase in energy companies. It could be driven by our marketing for RFID Journal's RFID in Energy, Mining & Construction event, to be held in Australia on Aug. 12-13, but I am seeing an increasing number of energy companies from around the world subscribing to our newsletters. It could also be driven by some of the success stories. BP won an RFID Journal Award in 2012 and was a finalist this year (see BP Refines Maintenance Operations), while Bechtel won an award this year for the construction of an energy plant (see RFID Helps Bechtel Manage a Megaproject).
Venture capitalists are finding a new interest in RFID. Many VCs invested in RFID companies in 2004 to 2006, anticipating that the technology would take off rapidly in the face of mandates from big retailers and the DOD. That didn't happen, however, and those VCs lost a lot of money on the technology. Since 2008, RFID has been a four-letter word in VC circles, but that's finally beginning to change. I see more investors following the technology now than any time since 2006.
All of these trends are good news for the RFID industry. We are moving toward critical mass in retail and aerospace. Once those sectors move to mass adoption, other industries will follow. Energy could be one of the fast followers.
Successful deployments lead to more successful deployments, and then eventually to the rapid adoption of new technologies. I often think about a line in Crossing the Chasm, Geoffrey Moore's book about the technology adoption life cycle. I no longer recall his exact words, but in writing about what happens when a new technology enters the tornado (his term for when you reach the tipping point and mass adoption begins), Moore basically said that suddenly, everyone has to have the technology that no one needed. That means companies that see no need for RFID today might have a very different view in three years.
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.