Study: 2006 a Disappointing Year for RFID and Retail

When it comes to the meat-and-potatoes of the RFID retail business—the tagging of pallets and cases—2006 is going to go down as a very disappointing year.

A new report from Cambridge, England-based IDTechEx paints a sad but realistic portrait of frustrated suppliers and very isolated pockets of ROI examples. It does, however, hold out hope for a somewhat brighter 2007.

For more on this topic, see RFID Trials Show Mixed Results

“The pallet/case market for RFID tags became the nearest thing to a black hole in the RFID universe in 2006,” said IDTechEx CEO Raghu Das, who attributed the problems to “reluctant mandated customers, technical problems and pricing for volumes that never came despite retailers reporting excellent paybacks. Tagging the display unit is very different from tagging the pallet and cases.”

IDTechEx’s conclusions mirror what has been reported by other industry observers, including IDC and IHL. Like anything else with RFID, it can be misleading to refer to “the RFID industry” as though it’s a single entity. Consider the strong RFID activity shown in contactless payment (evidenced by 7-Eleven and Jack-in-the-Box, which went so far as to launch nationally with barely a regional trial) as well as in item-level parts tagging (best illustrated by Boeing’s parts-tracking efforts on its latest airliner) and RFID display efforts (such as Procter & Gamble’s work on tweaking promotion timing).

Those efforts have little in common with the core pallet/case efforts. Ironically, it was supposed to be the pallets and cases where RFID would shine, with niche efforts like contactless and item-level tagging taking much longer.

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