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RFID Market Development to Date in 2011: The Treats/The Tricks (Part II)

Happy Halloween from VDC Research!  As a follow-up to Part I posted on Friday, VDC Research is continuing its brief take on the RFID market to date in 2011.  In the spirit of Halloween, this time we highlight a few of the “RFID tricks” we have come across so far this year.    

RFID Tricks:

  • NFC: Is it a hype or ripe market?  We have been talking about NFC for more than a decade. Over the course of that period, we have experienced a few hype cycles.  We do agree there is a lot of hype, and the hype can be likened to what we saw in 2000 – albeit a bit more practical in its implementation today. But something useful will come out of it in the short term. Most of the hype surrounding NFC is about payments. The core issue is that this proposition only works when there is a critical mass of contactless terminals in place, and this is not happening at a break-neck pace, or if the terminals are there, then they do not seem to be used much, especially for NFC. VDC Research, however, believes that what will turn NFC from promise to reality in the short-term is real-time personal marketing, merchandising and loyalty (aka “smart marketing”). We advise industry observers to stop thinking “mobile payments” alone when you hear NFC, because payments are just the tip of the iceberg. Start thinking about a totally new medium and different paradigm – NFC-enabled mobile advertising, shopping, infotainment, loyalty and verification/access platforms for mobile devices. Then you will understand why NFC is here and happening.
  • Wal-Mart retail apparel tagging slowed after a strong start in 2010.  The world’s largest retailer captured lots of headlines last year when it declared it would begin tagging several lines of apparel with RFID. Tag volumes in the billions were cited, along with aggressive timelines that have become all too familiar when it comes to Wal-Mart and RFID (recall the case and pallet tagging program volumes and timelines?). At this point Wal-Mart’s retail apparel “push” is being delayed to at least mid-2012, but this is not a big surprise to VDC Research and somewhat expected given the massive undertaking. And, Wal-Mart’s RFID stutter-steps have not deterred scores of retailers from moving forward with RFID tagging of apparel items (see Macy’s, Bloomingdale’s, JC Penney, American Apparel and others). Some would argue that the “trick” from Wal-Mart is a “treat” for other retailers who are now capturing the headlines today.
  • The economy: enough said. The weakened economy is a “trick” for most industries today and the RFID market has not been immune. However, the RFID market is not contracting and VDC Research argues that the forecasted flat-to-slight growth in RFID markets is better than a decline, especially in down economy. Like many, we wish the economy would provide more treats than tricks in more sectors these days, including the RFID market.
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