Cybra, a bar-code and RFID software provider, has announced the results of a survey illustrating that the use of radio frequency identification has increased significantly during the past four years. Specifically, the number of responding companies that indicated they were using the technology rose by 157 percent since a similar survey carried out in 2008. The study was conducted with 153 businesses, about half of which were Cybra customers.
All companies surveyed were located within the United States, varying in revenue size, as well as in industry, says Sheldon Reich, Cybra’s VP of solutions—though a large percentage of respondents were retail-based, since the majority of Cybra’s customers are in the apparel or other retail space. The RFID growth reported by respondents, he notes, indicates that item-level tagging for the retail sector is on the rise, largely the result of mandates. However, he adds, much of that growth is also taking place within companies operating a closed-loop supply chain, selling the products they make within their own stores.
The survey found that 70 percent of responding companies either use or plan to use RFID, with 54 percent currently utilizing the technology. Nineteen percent of respondents reported having no plans to implement RFID.
Of those taking the survey, 81 percent indicated that they expected to recoup their investment in RFID within three years, while 56 percent anticipated a return on investment (ROI) within two years.
Approximately a quarter of those who responded described themselves as operating in the manufacturing sector. Eleven percent were retailers, while 11 percent were in apparel and nearly 10 percent were in the wholesale market.
The survey follows two similar studies conducted by Cybra, one in 2008 and another last year, each aimed at assessing the health of the RFID market, as well as whether there is a growing demand for the technology. In May 2012, the company chose to conduct its latest survey to assess RFID usage growth during the past year. The firm drew its participants through publicity on the Internet, including in blogs and on Facebook. As an incentive to participate, respondents were placed in a drawing to win an Apple iPad.
Participants were asked whether their company was currently employing RFID technology—and, if so, the top four reasons for doing so. They were also questioned about which software vendors they utilize, their business objectives related to the use of RFID and the estimated payback period they expected for their RFID investment.
The same questions were posed to similar companies in 2008 and 2011, though the number of respondents ranged from 228 on the first survey to 119 on the second. Responses regarding current use of RFID show the greatest variation among the three surveys. In 2008, 21 percent of respondents indicated they were currently using or piloting RFID, compared to 32 percent last year and 54 percent on the most recent survey.
In 2008, when asked if they were willing to deploy RFID in the near future, 51 percent said they were, while 29 percent replied, “not at all.” This year, 70 percent reported willingness to use the technology in the near term, while 19 percent were unwilling to do so.
Those unwilling to deploy cited the technology’s high cost or their own lack of budget as the greatest impediment, and also reported that there was insufficient evidence of an ROI, or not enough scale—for example, product or sales volume—to justify an implementation.
When asked to describe the purpose for which they currently use or plan to use RFID, 62 percent indicated inventory management, while 32 percent said the monitoring of products through manufacturing, assembly or other processes. Twenty-six percent reported using the technology to track containers and pallets.
In terms of business objectives, the goal most commonly cited in 2008 was improved ability to track and trace products, followed by greater efficiency. That changed in 2011, when the most commonly cited business objective (36 percent of respondents using or planning to use of RFID) was to comply with customer mandates. The 2012 survey found that 38 percent were focused on complying with customer mandates.
None of this year’s participants agreed to speak with a reporter for this story regarding the survey results. Reich, however, notes that “the big encouraging trend to us, as a vendor, is the number of end-user companies that are moving forward,” such as retailers and brand owners. The use of RFID, he adds, “is certainly not 100 percent compliance-driven. We have closed-loop [customers] that have nothing to do with compliance.” In fact, he says, some of the greatest ROIs that he’s witnessed have come from closed-loop installations.
One example that Reich cites involves a jewelry retailer that uses an ultrahigh-frequency (UHF) system, including Smartrac Belt RFID tags with Impinj Monza 5 chips, and R420 and R440 readers, to track the location of jewelry items moving around the sales floor or back room, and from one case to another. The readers utilize Impinj’s Brickyard and Mini-Guardrail short-range antennas, Laird Technologies‘ far-field antennas and Times-7‘s smart shelf antennas. The system includes RFID tags on each piece of merchandise, in addition to tags worn by the sales staff, so the system, using Cybra’s EdgeMagic RFID software, tracks not only where an item is moved, but also who moved it. The solution provides the company with visibility that it previously lacked when performing manual inventory checks. In fact, Reich says, it detected when an item was accidentally thrown in a trash receptacle on one occasion, enabling that object to be rescued before being inadvertently discarded.
Cybra intends to conduct a new RFID survey next spring, in partnership with GS1, though details of that planned survey are not yet available.