Monday, 6 October 2008

Compliance Remains Top Reason , But Other Benefits Begin to Prompt RFID Adoption

Consumer goods manufacturers and retailers continue to adopt RFID (Radio Frequency Identification) largely for the sake of compliance with mandates from the likes of Wal-Mart, Sam’s Club, and METRO in Germany.

However according to a survey recently conducted by ABI Research,, other benefits that RFID can deliver are growing in importance and will eventually overtake compliance as the leading market driver for RFID uptake in this vertical.

According to research director Michael Liard, “While compliance remains the primary motivator for RFID uptake in the consumer goods sector (in contrast to the overall RFID market) respondents to this ABI Research survey cited three other considerations that increasingly influence their decisions to trial and deploy the technology. They are: ease of scalability, business process improvement, and removal of human intervention.”

The breadth of possible retail RFID applications is growing, too.

For example, consumer goods manufacturers and retailers also agree that RFID technology can contribute to more effective promotions by helping to determine when promotional products arrive, and if and when they were placed on the store floor. Another exciting area is item-level tagging of apparel, books, and more.

Liard adds, “Declining passive UHF tag and readers price points have positively influenced market adoption, but further reductions are necessary if RFID is to explode in supply chains. Favorable prices will become even more critical as consumer goods manufacturers focus on ROI and total cost of ownership, and when RFID ‘goes wider and larger’ within enterprises.”

ABI's Research White Paper, “Consumer Goods Manufacturers Continue to Press Forward with RFID Adoption Plans,” is available on the firm’s website.