ABI: Compliance Aside, Other Benefits Prompt RFID Adoption
October 13, 2008 // Published as a news service by IHS
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Consumer goods manufacturers and retailers continue to adopt radio frequency identification (RFID), largely for the sake of compliance with mandates from Wal-Mart, Sam's Club and METRO in Germany.
But according to a survey from ABI Research, other benefits RFID can deliver are growing in importance and will eventually overtake compliance as the leading market driver for RFID uptake in this vertical.
"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," said ABI Research director Michael Liard.
"They are ease of scalability, business process improvement and removal of human intervention."
The breadth of possible retail RFID applications is growing, too. Analysts said 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.
"Declining passive UHF [ultra-high frequency] tag and readers price points have positively influenced market adoption, but further reductions are necessary if RFID is to explode in supply chains," Liard said. "Favorable prices will become even more critical as consumer goods manufacturers focus on ROI [return on investment] and total cost of ownership, and when RFID goes wider and larger within enterprises."
Source: ABI Research.