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Economic Downturn May Spur RFID Adoption

As companies work to cut costs and reduce overhead wherever possible, RFID technologies now look more appealing.
By Mark Roberti
Jun 01, 2009—Warren Buffett, the Oracle of Omaha and chairman of Berkshire Hathaway, is said to have once quipped, "Only when the tide goes out do you find out who is not wearing a bathing suit." His point? In a growing economy, it's hard to tell which companies are weak, but when the economy slows or shrinks, you can see which companies are operationally inefficient.

The swift shift from global economic growth to rapid contraction has left many companies reeling. Some have already gone bankrupt. Many others are fighting to survive. But the stronger companies are working to cut costs to maintain profitability and increase their competitive advantage. "The companies that are cutting their investments in technology are crazy—they are going to be paying for this mistake for years to come," says Thomas Beckmann, VP of group supply-chain management for Charles Vögele Group, a Swiss retail chain, and winner of the 2009 RFID Journal Award for Best RFID Implementation.

Many end users at RFID Journal LIVE! 2009 were looking for ways to cut costs by improving asset tracking, managing finished-goods inventory more efficiently, reducing shrinkage and so on.

Anecdotal evidence from RFID Journal's discussions with providers of technology hardware, software and services indicates that companies put most projects involving capital expenditures on hold after the financial crisis hit in October. Some of those projects are now going ahead. Others have been shelved indefinitely. Some vendors were concerned that the downturn might deliver a severe blow to an RFID industry that was starting to gain traction. That view is beginning to change.

It appears that interest in RFID technologies remains strong. RFID Journal's Web traffic is a leading indicator of interest globally. The chart below shows that there has been little falloff in traffic since the start of this year.

Unique visitors is the number of individuals who visited the site. Total visits is the total number of times those people came, and total page views is the total number of site pages they looked at. So if you were the only person to come to the site last month, and you came five times and looked at five pages each time, that would be one unique visitor, five total visits and 25 total page views.

The RFID Journal Web site did see a decline in the total visits, but also a corresponding increase in the number of pages viewed by each visitor (divide the total page views by the total visits). This could indicate that readers are more serious about RFID technology and are spending more time researching deployments.
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