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dress shirts—have a big enough profit margin to support the
cost of implementing RFID. And finally, clothing materials
typically lend themselves to simple attachment of the tags.
BARRIERS CONTINUE TO TOPPLE
While much of the focus has been on RFID adoption in the
apparel industry, the field is set to expand. New investment
for omnichannel applications has helped RFID overcome
some of the obstacles that hampered its first full-scale rollout, like the cost of tags and readers, performance problems
in challenging environments (radio waves can’t penetrate
liquid or metal easily), and the cost of training employees to
work with the technology.
In RFID’s early years, the price of tags was a major problem for all but the largest adopters, hovering at 50 or 60 cents
apiece in 2005. But as production has ramped up (global
sales of ultra-high frequency passive tags—the most common type—reached 4 billion in 2014), the cost per tag has
fallen to the 7- to 10-cent range, according to the Auburn
RFID Lab.
Likewise, although technical problems persist for certain applications, the technology has come a long way in
the last few years. Radio waves are absorbed by water and
reflected by metal—a real problem if you’re trying to read
tags attached to beverages or makeup in a warehouse with
aluminum-clad walls and steel racks. But those challenges
can be surmounted for a slightly higher cost with tagging
technologies like near-field communication (NFC) or active
RFID.
Security has proved to be another stumbling block. Some
companies have expressed concern that hackers could steal
the digital data they collect by scanning tagged items as
they flow through a warehouse, says Mario Vaccari, who
teaches courses on transportation and logistics management at American Public University. To address that fear,
researchers are working to devise stronger software protection protocols.
CONNECTING THE DOTS
Despite the recent progress, RFID’s day has yet to truly
arrive. That will only happen when manufacturers, carriers,
warehouses, and retailers begin sharing the data they harvest,
experts say.
“We’ve been doing RFID in retail for five years at the item
level, but no retailer requires suppliers to send them the data,
so retailers are still blind-receiving items,” says Auburn’s
Patton. “The most fundamental link is the relationship
between the manufacturer and the retailer, but we haven’t
made that jump.”
Shipping and logistics operations could see a great impact
on their visibility when they finally make this connection.
“When the supplier and retailer have gotten to the point
where they’re making that data handshake and jumping
that gap, that will be the spark, the catalyst for real growth,”
Patton says.
