The start of a new year is a perfect time to reflect on the past 12 months and plan for the year ahead. This year, I thought long and hard about the transformation the RFID industry is going through. This industry, once propelled by the hype generated by retailers such as Wal-Mart, spent the better part of last year fighting to cement a new identity and value proposition when that hype all but disappeared. This year will be crucial to determining the future proliferation of RFID technology. It's not that opportunities for RFID applications have vanished. It's simply that these opportunities may not be in the applications that were initially earmarked for RFID dominance a year or two ago. The speed and degree of RFID's growth will be contingent upon the industry's and business community's ability to see RFID in a different light. This message was delivered fervently during a media forum involving leading industry vendor executives, analysts, and end users at RFID World last September.
RFID: IT'S ALL ABOUT BUSINESS BENEFITS
During this forum, Joe White, VP of RFID business development for Motorola, explained how current and future RFID sales will be more contingent on solving business problems than on the technology itself. "A couple years ago, our salespeople spent most of their time proving the read range of our products to prospects," says White. "Today, the technology performance is more or less presumed, and prospects are more concerned about how the technology can be applied to solve their business problems. As a result, RFID as a unique technology is going away. RFID has to evolve into just another data capture technology. As I see it, the future of RFID will be a suite of technologies including wireless mobility, fixed readers, Wi-Fi, and a number of other elements. It won't be a standardized technology."
WHERE'S RFID's 'KILLER APP'?
If White's outlook for RFID technology is accurate, and Wal-Mart compliance won't drive the industry forward, the question then becomes what 'killer app' will emerge to bring RFID into the mainstream? Impinj CEO Bill Colleran responded at the forum by saying that a 'killer app' for RFID has yet to arrive, but just as the Internet evolved into practical business utility, so too is RFID evolving. "In the last few years, the performance improvements in RFID have been huge — standards have emerged, the costs of tags are about half of what they were three years ago, and the cost of readers has also been cut in half," he says. "We're seeing a progression in RFID similar to what we've seen in the Internet's evolution to Web 2.0."
While a 'killer app' has yet to be identified, several applications of RFID technology — including closed-loop asset and inventory tracking applications — are currently showing promise. For example, Zander Livingston, research & development strategist for American Apparel, was on hand to describe how the retailer has saved 60 hours of labor per week by tracking products and inventory using RFID technology. "We've incorporated RFID read points into the processes on the sales floors of some of our stores and sped them up, removing the need for bar codes," he says. "We plan to move forward with a national rollout of the technology."
With success stories like these, it's obvious that RFID technology has arrived. The pressure is now on the industry to come up with creative new ways to implement it effectively and promote these success stories to their peers.