HORIZONS 25
Fashion and footwear drive RFID growth
Radio frequency identifi cation (RFID) item level tagging (ILT) is being deployed very rapidly in apparel and footwear markets according to researchers
the total world market for RFID tags. The fi rm forecasts that more than 750 million RFID tags will be used in global apparel markets in 2011.
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“RFID systems allow apparel retailers to get a better handle on inventory, reducing costs and preventing out of stock situations that result in loss of sales,” said ABI Research principal analyst, Bill Arnold. “The growth in retail item-level tagging is huge, both in shipments and in total spending. The average growth rate is close to 60% for the next three years. In fact, the number of tags that will be used for retail ILT in apparel alone is likely to exceed the total number consumed over the past fi ve years for all RFID markets combined.”
ecent investigation by ABI Research found item level passive UHF tags now make up an increasing share of
Major retailers such as Macy’s, JC Penney,
Wal-Mart, Gerry Weber and Marks & Spencer are leading the charge to make RFID systems commonplace in the retail environment. Typical return on investment times for such RFID deployments should be only three to six months. But, added Arnold: “The state of the global economy is still creating serious delays in getting money allocated to retail RFID. Executives are still very uneasy about business conditions and availability of credit, and, while ILT systems are technically scalable right down to small businesses, credit will be the big limiting factor for smaller independent stores.”
A related use of RFID in retail is in electronic article surveillance (EAS) systems, which ABI said is led by Checkpoint and Tyco
E-commerce growth forecast to slow
Logan Tod & Co.’s recently published Annual Online Shopping Index has warned of predicted growth of 12 to 17% during Christmas 2011, compared to 15 to 20% last Christmas. Overall, shoppers are indicating slower growth in sales, according to the 2011 online shopping survey carried out at the end of December 2010. However, one key group of online shoppers said that they do plan to spend 36% more online next Christmas – those aged 25 to 34. Matthew Tod, chief executive at the online performance optimisation consultancy, explained: “It is clear that there is potential growth to tap into this year, but selecting your audience is crucial. Different segments have very different needs and the retailers who tailor their online experience, or can match online experience closely, will prosper.
“The 25 to 34-year-old ‘digital natives’ carried out by far the most online shopping this Christmas, with 48% stating that they did ‘as much as they possibly could’ of their shopping online, for example compared
to just 22% of ‘digital migrants’ (those aged 45 and over). Their reasons for shopping online included avoiding the crowds, availability all hours and home delivery, demonstrating the importance of ease with online shopping outweighing lower costs, which are favoured by the older generations.”
The study also revealed the features that infl uenced which stores the digital native age group visited, with recommendations from family and friends, onsite reviews and social networking sites all strongly contributing to their choices. However, 43% of ‘digital migrants’ rely heavily on previous good experience with stores, choosing this as a key driver to their sites of choice. ‘Digital natives’ are also more likely to use multiple channels to aid them in their Christmas spending. Half of this age group said they used ‘Click & Collect’ last Christmas, while 32% of the same group said they used a smartphone in their buying process, to research and/or buy a product, compared to just 3% of ‘digital migrants’.
JANUARY/FEBRUARY 2011 RETAIL TECHNOLOGY
Retail Solutions in this sector. Michael Liard, ABI Research director,
added: “Retail adoption of RFID at the item level parallels the course barcodes took about 30 years ago. The main difference this time is that retail department stores, not grocers, are leading the charge.”
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