RFID hasn’t taken off in the electronics supply chain as expected, but the market value of these ID tags continues to grow. The global RFID smart label market is estimated to grow from $2.2 billion in 2014 to $4.9 billion by 2019, at a CAGR of 17 percent from 2014 to 2019, according to a recent report.
Radio frequency identification is the wireless application of electromagnetic fields to transfer data, for the purposes of automatically identifying and tracking tags attached to objects. The tags contain electronically stored information. In its early days RFID was examined as a way to uniquely identify individual electronics components for tracking purposes. Although costs per tag and come down significantly, the solution is still too expensive for the millions of electronics components produced every day.
Special tags are used for retail, though, fixed to merchandise or books. The reasons for the high usage of RFID labels in retail inventory and pallet tracking are inventory shrinkage reduction, monitor unattended inventory, automatic item identification on mixed pallets, real-time notification of out-of-stock items, improvement of product replenishment, and efficiency in error reduction which helps reduce manual labor cost.
According to Smartrac Group, the power and capacity of RFID is even more evident when looking at emerging opportunities for RFID in the Internet of Things (IoT) landscape. First coined by Kevin Ashton in 1999, the definition of IoT has evolved over the years, and today IoT can perhaps best be described as everyday objects or things that are connected to the Internet, and signifies the inevitable convergence of conventional connected devices and the smart appliances of today and the future.
The number and range of IoT applications that can be envisioned with RFID devices are simply tremendous, Smartrac said. The inherent value of RFID lies in enabling “things” to report data in real time for faster, quicker, more interactive decisions both at the industrial level and — increasingly — at the consumer level.
According to Smartrac, perhaps the best-known concept, sometimes called the “killer app” for IoT, is the interconnected, automated home, where people can interact with everyday devices in their homes. This vision of the future sees appliances such as refrigerators being aware of their ‘state’, and knowing when to order and replenish groceries; electronics such as lighting, music and TV automatically tuning to individual preferences, which can be managed by presence (proximity to RF-enabled device), by time or by sensory input; access solutions, whether logical ones for Wi-Fi user authorization, or hands-free operation of doors and windows... the possibilities are truly endless.
Radio frequency identification systems now are more frequently designed to help retailers boost their sales and protect their profits by increasing open merchandising opportunities while reducing shoplifting and internal theft. Globally, retail inventory tracking and pallet tracking were the leading market for radio frequency identification with a market share of 52 percent together in the year 2014. Retail, logistics, supply chain management, and apparel industries are expected to grow in the near future which has led to the growth of these tracking applications.