RFID adoption: Is this the year?

April 07, 2017 Opinion piece

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James O’Sullivan, Engagement Manager for Apparel at GS1 UK, asks if RFID’s time has finally come

RFID journal recently reported that “this could be the year” RFID usage in retail reaches its illusive tipping point and accelerates dramatically. For many, this will feel like a long time coming. The prediction of an RFID revolution is something that has been put forward many times before, so why is this time different?

When did the hype start?

Given the long history of bold predictions for RFID adoption, it’s fair to say the technology has suffered from over-hyping. The Gartner hype cycle is a useful framework for tracking RFID technology through 6 stages of perception on the way to industry adoption.

1. Technology trigger

RFID has been used since the second world war, for the identification of ‘friendly’ fighter planes in combat, but was first experimented with in retail by Walmart and IBM in the 1990s.

2. Peak of inflated expectations

M&S joined Walmart in launching pioneering RFID programmes in the early 2000s, building industry expectations. The industry overcame interoperability challenges through the introduction of the GS1 EPC standard in 2004 and the hype continued to build as other retailers began to trial RFID.

There’s a memorable IBM advert from 2006 depicting a shopper walking through a supermarket and stuffing items suspiciously into his coat pockets – to the increasing attentions of a security guard. The guard stops the would-be thief only to say, “you’ve forgotten your receipt” as through RFID, the shopper has automatically been charged for his items. While it is difficult to pinpoint an exact ‘peak’ of expectations this is a good illustration of how disproportionate marketing of RFID was from the reality at the time.

The parallels with Amazon Go, now a reality at least within Amazon’s campus, are striking and while credit is due to IBM for their vision, it’s taken the retail industry a decade to move a theoretical concept to a working prototype.

3. Trough of disillusionment

By the end of the 2000s not only did the Walmart and M&S programmes stall but the retail sector, particularly in the US and Europe, was also faced with a global recession. Costly RFID programmes with unproven benefits suddenly fell down the priority list as retailers were forced to think short-term to cope with the harsh climate.

4. Slope of enlightenment

Despite suffering some considerable setbacks, we’re undoubtedly now seeing greater adoption of RFID technology. It’s possible to point to several retailers, notably Macy’s and M&S, who have publicly announced their intentions to tag 100% of apparel and general merchandise products, having successfully proven the concept within their business. These organisations may have been first to take the risks, but they are the ones benefitting from improvements in RFID technology that have come from them doing so.

And now more applications based on RFID technology, beyond inventory management, are being identified. Research by the Auburn University from 2016 now counts 60 use cases for RFID in apparel retail alone.

5. Plateau of productivity

After the slope of enlightenment comes the plateau of productivity, that is to say, where the technology becomes part of business as usual. Whether or not this will be ‘the year’ for RFID technology or not remains to be seen but given the trajectory retail apparel is heading, the questions seems now to be a case of when rather than if.

We’ve been here before…

If there is truly a pattern by which emerging technologies are adopted, then surely we can look to the journeys technologies that are now commonplace have taken for comparison? Take the barcode as an example.

It’s difficult to imagine the retail industry without the barcode now, but it was once a truly revolutionary and disruptive technology. The detractors and nay-sayers of barcode scanning were eventually won over through standardisation, collaboration and technical improvements in barcode-reading, making the ROI from making the change undeniable.

Gartner Hype RFID

With RFID now nearly 20 years into its own journey, perhaps there is some comfort that the barcode took almost 30 years to become truly embedded into how we live and work, yet is still here some 20 years later.