Systems integrators around the world are seeing vast new opportunities to deploy RFID systems. How is the market evolving and where do the biggest wins lie?
Radio frequency identification (RFID) technology adoption is accelerating in many sectors. Retail, particularly in apparel, has led the way, but the use of RFID is expanding in other areas, including cosmetics and beauty, food production, processing automation, distribution of goods, aviation, automobile manufacturing, as well as logistics and fulfilment. IDTechEx Research estimates that the market for RFID products will grow to $13 billion in 2022, up from $11.6 billion in 2018.
Other research firms are predicting even faster growth. Once viewed as a useful tool for tracking pallets and cases in the supply chain, RFID is now being employed in innovative new ways to create business value at the item level and to launch consumer-engagement applications. New on-metal tags, microwave-safe tags and other innovative transponder designs have opened up new opportunities for companies to take advantage of RFID technology. Many companies are combining RFID with other technologies, including artificial intelligence (AI), blockchain, data analytics, geolocation, and light detection and ranging (LIDAR), to create even more business value and enhanced efficiencies. Retail leads the way RFID adoption has gained a strong foothold in retail due to its ability to deliver accurate, near-real-time inventory data, enabling stores to ensure products are always on the shelf when customers want to buy them. Marks & Spencer has been a leader in Europe, while Macy’s, Lululemon and others have been pioneers in North America. Recent announcements from Under Armour and other companies that they intend to tag all items in stores are fueling interest among other retailers and brand owners as well. Ralph Lauren is taking things a step further, as it is set to digitize its entire product line, starting with its popular Polo brand. Ralph Lauren is partnering with real-time Internet of Things (IoT) software platform Evrythng and Avery Dennison to create digital product identities. Evrythng is providing the cloud- based data infrastructure and product serialization, while Avery Dennison is handling the creation and printing of product serialized labels for some 200 million items annually, via its Janela solution. When fully implemented, the project will provide Ralph Lauren with product visibility across its enterprise and its customers, with near-real-time information regarding inventory at any given store.
RFID is also enabling frictionless retail, including stores that do not require sales associates, and smart vending machines that allow retailers to sell items almost anywhere while having real-time visibility into what has been sold and what needs to be replenished, as well as data regarding purchase history, expiry dates and dynamic pricing capabilities. Sodexo, a multinational providing food services, piloted SmartChef, a grab- to-go food concept powered by SmartFridge, to provide convenient, all-day food access. Invented by CryoWerx, a Singapore-based engineering and technology company, SmartFridge is a fully automated self-service vending machine that provides ready-to- eat options including hot entrees, healthy snacks and beverages. It is also RFID-enabled, providing a frictionless customer experience. Frictionless or unmanned retail is not only convenient to the users, but it also helps companies lower labor costs, reduce food waste and better manage their inventory. Precise tracking and tracing enable operators to efficiently replenish and manage the machines, while promotions can be digitally displayed on the face of the fridge to offer discounts on items nearing expiration. Given the value retailers are currently achieving with RFID, growth is expected to accelerate throughout the next five years. Hundreds of thousands of stores will need to be outfitted with RFID readers and servers to collect and analyze the data, creating a massive opportunity for systems integrators.
Retail adoption is also signaling to other industries and market segments that RFID technology has matured and is now delivering real value, which is likely to encourage other sectors to invest in RFID solutions. Air travel Delta Air Lines announced that it would invest $50 million to equip 344 stations worldwide with RFID, in order to enable the airline to track the 120 million passenger bags it handles annually with the technology. Although the global spread of the COVID-19 coronavirus in early 2020 drastically reduced air travel, the majority of the airline industry is expected to follow Delta’s lead (some have already begun to do so) once travel gets back to normal and airlines are back on a stable financial footing. In 2019, the International Air Transport Association (IATA) adopted a resolution supporting the global deployment of RFID tracking technologies for checked airline baggage. The move to RFID has been a wide-scale collaboration between all stakeholders across the baggage industry, including airports, airlines, luggage handlers and technology providers. IATA has said its ambition is to work with airlines and airports to bring RFID to 80 percent of baggage checked for air travel by the end of 2022, although that is likely to be delayed as a result of the disruption of air travel. Eventual adoption of RFID is expected to save the airlines a total of $3 billion annually, by reducing the number of mishandled bags by 25 percent and more. RFID could eventually be installed at all 1,200 international airports, as well as at thousands of domestic airports. In addition, airlines and airports will need to install readers along miles of conveyors and at key loading and unloading points.
Blockchain
Counterfeiting, diversion and product safety are global problems for many industries, and numerous companies are looking to blockchain systems to solve them. As data can be shared but previous records (blocks) cannot be modified, a blockchain provides a secure, verifiable history of information about an item of value. Most industries are now global, with products produced in one country traveling through several others before arriving at the place where they will be sold. This has enabled unscrupulous players to sell counterfeit products into the legitimate supply chain, and to divert legitimate products to the gray market for profit. Even if goods are not being counterfeited or diverted, the nature of global supply chains makes it difficult to guarantee the products’ quality. As more manufacturers in other industries adopt blockchain technology to ensure the authenticity of their products, it is likely they will choose RFID as the means of automatically capturing data as the product moves.
Geolocation
Geolocation is another trend that is helping to boost RFID adoption. Geolocation is defined as the identification or estimation of an object’s real-world geographic location. It can be accomplished via Wi-Fi, Bluetooth, cellular transmission, RFID, GPS and other technologies. Retailers and brand owners are using geolocation to engage customers and add value to their products. Geolocation can be used across many different industries. In aviation, for example, reading the RFID tag on an airplane part at a repair facility could automatically trigger an update regarding the status of that part—indicating, for example, it is out of service. In logistics, areas of a warehouse could be fitted with readers, and when parts bins or returnable transport items are placed at such spots, that could signal that they were ready to be picked up or shipped back to the supplier.
Drones
The advent of low-cost drones has enabled companies to automate inventory counts in warehouses and large laydown yards using RFID. An example is German multinational automotive corporation Daimler, which is using RFID technology to perform automated inventory counts within warehouses, including third-party locations, to locate ‘empties’ (pallet structures, racks or containers that hold manufactured parts, but without having those parts in the unit). The RFID-enabled technology, in combination with an autonomous flying drone, has allowed the firm to use an alternative to fixed RFID gates at the warehouse entrance, thereby bringing greater accuracy to inventory counts. Trends show it is likely the use of drones and RFID will expand across logistics and other sectors during the next five years. A variety of additional technologies will boost RFID adoption in the coming few years.
The interest in artificial intelligence (AI) applications by businesses around the world will also contribute to the adoption of RFID, since RFID provides accurate, real-time data about what’s happening in the world. Vision systems are gaining traction in retail and other sectors as well. Such systems can be used, for example, to determine traffic patterns within stores. When vision systems are combined with RFID, retailers can monitor how long customers interacted with specific products or displays. RFID can also supplement vision systems in frictionless stores, ensuring that computer systems can distinguish between two similar- looking products. Additionally, RFID can deliver data for supply chain, workforce and other optimization technologies. These systems need accurate data regarding what is happening in the real world and in real time in order to deliver value.
Sustainability
The United Nations’ Food and Agriculture Organization (FAO) estimates that 1.3 billion metric tons of food are wasted globally each year—equivalent to one-third of all food produced for human consumption. Governments and businesses around the world have begun taking steps to dramatically reduce food waste as a means to increase sustainability, minimize the impact on the environment and ultimately improve the bottom line for companies. They are also looking to increase recycling efforts and reduce the amount of waste going into landfills, especially waste that can leach chemicals into soil and groundwater. This aspiration towards sustainability is a key driver for RFID adoption by using systems which can automatically identify when individual food crates, for example, are packed according to a specific order, as well as when they are shipped and returned.
Besides many aspects of sustainability globally, it is also important for businesses across many segments to partner with an RFID inlay manufacturer that takes sustainability seriously. The key is to make sure that RFID-enabled labels attached to or embedded in a product do not prevent the recyclability of the product or packaging when it reaches the end of its life. Avery Dennison’s Smartface products replace polyethylene terephthalate (PET) with a paper substrate, reducing the contamination of the recycled paper with plastics. Also, its Smartrac-developed Green Tag program is designed to reduce the use of RFID tags’ impact on the environment. The tags are plastic-free (using a recyclable paper substrate), utilize antenna materials free of heavy metals and do not employ chemical etching. These aluminum antennas have a lower carbon footprint compared to traditional metal antennas. As another positive effect, aluminum also supports the circular economy (75 percent of all aluminum ever produced is still in use). In addition, new antenna-cutting and forming techniques can reduce the amount of chemicals and energy used in production.
by Avery Dennison