Retail Supply & Demand Chain

3)      The vendor community has matured significantly. Vendors have clearly identified their place in the RFID ecosystem and strong vendor partnerships have evolved. See my recent report, Best Practices: Never Knew Loss Like This Before, April 2010, IDC Retail Insights Doc # GRI222746, to see a picture of our view of the RFID vendor ecosystem.      Vendor messages are succinct and technology is hardened and mature. There are still new players entering the space with new ideas about how to streamline processes and drive down costs, easing adoption for many end-users - see #7, 8 and 9 below for examples.

4)      Innovation is still taking place, but there is no need to wait for the next big breakthrough. Examples of continuing innovation include:
   • o   Intelleflex's focus on standardized Gen 2, Class 2 tags - very promising, as they make low cost passive tags with memory a reality for a multitude of asset tagging applications.
   • o   Tageos's is developing inlay-less high performance passive tags with aluminum antenna which will dramatically reduce tag prices once they initiate mass production, planned for later this year.
   • o   RFID Global Solutions - they are planning on delivering RFID in the cloud for retailers - this will be subscription based software and services, dramatically reducing the cost of entry. This may help many retailers get started, but many may scrutinize network traffic and security.

5)      Asset tagging, RTLS and transit pass projects pay the bills for many vendors. Asset tagging initiatives still comprise a significant proportion of RFID technology sales. Supply chain, work in process and in-store operations projects are on the rise. End-users will be interested in investigating Precyse Technologies bi-directional wireless asset management infrastructure, since they announced that they provide it for free. RTLS vendors including Aeroscout, Ubisense, Ekahau and Zebra's WhereNet continue to win new customers with wireless RTLS. 

6)      Projects that involve government, defense and aerospace organizations abound. This has been great news for vendors including Odin, Savi, GlobeRanger and Unisys. The number of Boeing, Airbus, US Air Force, US Navy and DoD projects continue to grow as efforts extend more broadly. Health care initiatives continue, primarily in asset tagging and cold chain, but pharmaceutical item-level tracking projects increasingly leverage 2D barcode.

7)      Retail apparel and footwear projects are taking off.  There are very good examples of pilots entering rollout stages, however, a majority of the new initiatives still come with long sales cycles, requiring persistence and patience on the part of the vendor community. JCPenney and Hot Topic were featured speakers in the RFID Journal Live retail presentation track - great examples of retailers focused on lean innovation in the store. Tagsys announced the item level RFID enabled processes that are helping retailer Serge Blanco gain item level visibility.  A small application provider, RFID Enabled Solutions (RES) demonstrated a promising turn-key retail and asset tracking application that it has piloted at the Gap and Abercrombie and Fitch.

8)      Vendors are diversifying, strengthening the array of choices for integrated retail RFID applications. There are a couple of technology vendors, formally focused on asset tagging, equipped to lead RFID initiatives for retailers, as RFID Global Solutions and S3Edge have entered the market to compete with stalwarts, Checkpoint (Oatsystems), ADT (VUE Technology) and Xterprise. CDO Technologies is a systems integrator serving government agencies and their customers with asset management, inventory management and automated data capture implementations. Commerceworx, a Canadian EDI vendor has added RFID data capture and data management to their list of capabilities, leveraging GlobeRanger's middleware. 

9)      Some hardware vendors are demonstrating a clear understanding of end-user process and technology requirements. Motorola has added RFID read capability to a new handheld / hands-free scanner, the  DS9808-R, that reads traditional barcodes with a laser scanner, as well as 2D barcodes with an optical scanner - all built into a traditional small "gun" format that fits nicely on top of any checkout counter. What makes this so revolutionary is that the scanner was developed with existing checkout processes in mind - process doesn't need to change at all. Rush Tracking demonstrated VisiblEdge, a product offering that enables automated lift truck operations. This complements their expert business process reengineering and business case development work, demonstrating a clear understanding that end-users want repeatable configurable solutions that revolutionize existing processes.  Like Motorola, UPM Raflatac, seems to be involved in a majority of retail RFID projects. Raflatec  announced a new DogBone UHF RFID tag that incorporates Impinj's Monza 4 IC to dramatically improve performance and security. This matters because end-users with specific extended memory, global performance and advanced security and privacy requirements, consider these features essential.

10)  RFID in the cloud is a reality. Unisys is the leading vendor in this space, with very mature capabilities already in use by various defense agencies. But an interesting newcomer, at least for retailers, is RFID Global Solutions, who will deliver cloud based RFID application services for a very low fee per user. Capital cost constraints that often delay initiatives, may be a distant memory, for retailers open to this model.

RFID Journal Live continues to be a very important annual event. But as I walked the trade show floor, it occurred to me that I could count the vendors that could actually deliver a solution to an end-user on their own, on one, or at most two hands - and this includes solutions for all of the vertical industries represented, including retail, manufacturing (CP, aerospace, automotive, and electronics), energy, government and financial. End-users really want a turn-key configurable system - technology providers need to help them build the appropriate set of capabilities to meet their requirements. This was the subject of last year's IDC Retail and Manufacturing Insights' RFID vendor landscape reports. These reports were designed to help end-users identify the technology providers that could provide technology and integration services - the "single throat to choke" or first point of contact for RFID enabled applications development (see Emerging Agenda 2Q09 Update: The Changing Vendor Landscape in M2M, RFID, and Sensors, May, 2009 - IDC Manufacturing Insights Doc # MI218047 and Vendor Assessment: RFID Vendors Positioned to Jumpstart and Lead Retail Initiatives, Nov 2009 - IDC Retail Insights Doc # GRI220732).  

I can not help but wonder, whether end users would be better served at more context aware industry events. For example, retailers crowded the couple of RFID application vendor booths at NRF this year. Would a broader set of vendors at NRF and other industry focused events attract even more attention?  We think so.  The fact that the large enterprise vendors, including IBM, SAP, Oracle and HP did not have booths this year at RFID Journal Live, supports our belief that this event is not really getting the end-user support of an industry focused, context aware applications event.


Leslie Hand, Research Director, Global Retail Insights