Item-level Tracking (ILT) was the big story in RFID for 2010. We have seen companies significantly scale, expand and integrate deployments this year; so much so that Gen2 tag volumes have increased approximately 6x over 2009.
We are confident that 2011 will be another big year for ILT in retail. Why?
- More scaling of deployments and solution expansion within the current installed base. The vast majority of all RFID activity in retail is currently relegated to a small number of Tier I and II retailers that leverage the technology to support a limited number of SKUs and processes. These enterprises are planning to continue to scale their deployments by increasing the number of SKUs, expanding the solution to include more stores/facilities, further integrating and developing applications.
- Other retailers are planning on adopting and integrating the technology globally. In addition to the early adopters, there are more accounts that anticipate to scale and expand within the next 12 months. And those that are piloting expect to shorten their evaluation periods by up to 30%, creating an even larger pool of new accounts ready to deploy.
- The value is beginning to outweigh the risk. RFID end users are extracting significant and measurable value from their solutions, which is resulting in more attractive and reproducible ROI and benefit models. There is less risk involved when there is more knowledge and predictability of the outcome. And don’t forget … the value increases the more the solution is leveraged, so as RFID continues to be broadly adopted from the start to end of a value chain, even more value will be achieved.
- Orders have already been placed and opportunity pipelines are expanding. A plethora of purchase orders in support of ILT solutions in retail have already been placed (many through the end of Q2 2011). In addition, many of the leading vendors for ILT RFID solutions in retail are developing and/or reporting large and robust opportunity pipelines for 2011 (some more than 2x larger than 2010).
So, we expect more from ILT in Retail in 2011 - more scaling of deployments, more accounts, more value and more growth.