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Presentation Overview

• Background on RFID and auto-ID

technologies

• Technology adoption lifecycle

• A brief history of RFID

• The focus on item level

• How RFID will become mainstream

Small, low value Large, high value

3 ft. 30 ft. 1,000 ft. 1,000 miles

Bar Code

Passive HF

RFID

Passive UHF

RFID Active RFID

GPS

RFID Is Part of a Suite of Technologies

10 ft.

Technology Adoption Lifecycle

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What needs to happen?

• A global standard

• A problem no other technology can solve

• The “whole” product (integrated solution)

• Critical mass of end users

• A gorilla the market can embrace

For RFID to cross the chasm and take off, the following conditions must exist:

A Brief History of RFID

• Auto-ID Center created 1999

• Walmart announces tagging requirements

in June 2003 (tagging to start Jan. 2005)

• DOD, Metro, Target, Tesco others follow

All Forms of RFID Gain Traction

• Early adopters begin to explore passive

UHF and HF, active RFID, real-time

location systems

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RFID spreads to all countries Attendees at RFID Journal LIVE! 2011 came from 48 countries:

Argentina Australia Austria Bahrain Belgium Brazil Canada Chile China Colombia Denmark Egypt

Finland

France

Germany

Hong Kong

Hungary

India

Ireland

Israel

Italy

Japan

Kuwait

Lithuania

Mexico

Netherlands

South Africa

South Korea

Spain

Sweden

Switzerland

Taiwan

Thailand

Trinidad

Turkey

United Arab Emirates

United Kingdom

United States

Venezuela

New Zealand

Nigeria

Norway

Pakistan

Panama

Peru

Philippines

Poland

Portugal

Romania

Russia

Saudi Arabia

Singapore

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RFID spreads to all countries RFID Journal readers live in 214 countries and territories.

Afghanistan Albania Algeria Amer. Samoa Andorra Angola Anguilla Antigua Argentina Armenia Aruba Ascension Isl. Australia Austria Azerbaijan Bahamas Bahrain Bangladesh Barbados Belarus Belgium Belize Benin – Bermuda Bhutan Bolivia Bosnia Herz.

Botswana Brazil – Brunei Bulgaria Burkina Faso Burma Burundi Cambodia Cameroon Canada Cape Verde Cayman Islands Central African Rep. Chile China Christmas Island Colombia Congo Cook Islands Costa Rica Côte d'Ivoire Croatia Cuba Cyprus Czech Republic Denmark Djibouti

Dominican Rep. Ecuador Egypt El Salvador Equatorial Guinea Eritrea Estonia Ethiopia Falkland Islands Faroe Islands Fiji Finland France French Polynesia Gabon Gambia Georgia Germany Ghana Gibraltar Greece Greenland Grenada Guam – Guatemala Guyana Haiti

Honduras Hong Kong Hungary Iceland India Indonesia Iran Iraq Ireland Isle of Man Israel Italy Jamaica Japan Jersey Jordan Kazakhstan Kenya Kiribati Korea, North Korea, South Kosovo Kuwait Kyrgyzstan Laos Latvia Lebanon

Lesotho Liberia Libya Liechtenstein Lithuania Luxembourg Macao Macedonia Madagascar Malawi – Malaysia Maldives Mali Malta Marshall Isl. Mauritania Mauritius Mexico Micronesia Moldova Monaco Mongolia Montenegro Montserrat Morocco Mozambique Myanmar

Namibia Nepal Netherlands Netherlands Antilles New Caledonia New Zealand Nicaragua Niger Nigeria Norfolk Island Norway Oman Pakistan Palau Palestine Panama Papua New Guinea Paraguay Peru Philippines Pitcairn Islands Poland Portugal Puerto Rico Qatar Romania Russia

Rwanda Saint Helena Saint Kitts/Nevis Saint Lucia Saint Martin Samoa San Marino Saudi Arabia Senegal Serbia Seychelles Sierra Leone Singapore Slovakia Slovenia Solomon Islands Somalia South Africa Spain Sri Lanka Sudan Suriname Swaziland Sweden Switzerland Syria Taiwan

Tanzania Thailand Togo Tonga Trinidad/Tobago Tunisia Turkey Turkmenistan Turks/Caicos Tuvalu Uganda Ukraine UAE United Kingdom United States Uruguay Uzbekistan Vanuatu Vatican City Venezuela Vietnam Virgin Islands Yemen Zambia Zimbabwe

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RFID spreads to all industries RFID Journal readers come from these industries:

Aerospace Agriculture Apparel / Footwear Automotive Aviation Building Maintenance Chemicals / Adhesives Construction Consulting / Business Services Consumer Electronics Consumer Packaged Goods Defense / Homeland Security Education Entertainment / Media

Financial Services Food Forestry Government Health Care High Technology IT Services Laundry Library Logistics Manufacturing Mining Oil and gas Packaging

Pharmaceutical Pulp and Paper Research Retail RFID/Data Collection Security Telecommunications Transportation Utility Waste Management

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Major Applications:

Manufacturing

• Tool tracking

• Asset tracking

• Inventory management

— FIFO

• Work-in-process tracking

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• Tool, jig tracking

• Returnable transport

item tracking

• Part marketing and

tracking of

parts’ histories

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Major Applications:

Aerospace / Aviation

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Major Applications:

Food

• Track and trace

• Recall management

• Temperature tracking

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Major Applications:

Health care

• Asset tracking (active)

• Blood tracking

• Patient monitoring

• Automated billing

• Laundry management

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Major Applications:

Financial Services

• Tracking IT equipment

• Tracking data storage

device

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Major Applications:

Retail

• Inventory visibility/accuracy

– Improved replenishment

– Improved on-shelf availability

– Reduced time to serve

customer

• Loss prevention

• Improved customer

experience

Retail CPG Hits a Bump

• Albertson’s, Target, Tesco and others

never deploy

• Suppliers must tag only for Walmart,

increasing costs

• In 2008, Walmart abandons mandates

• Many consider the technology all but dead

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Walmart looks internally

• The retailer begins exploring where RFID

could benefit its own operations

• Tests RFID on white label jeans

• Sees big benefits

• Encourages jeans

makers to tag

Photo: Wall Street Journal

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Walmart Restarts RFID Effort

• In July 2010, retailer

announces it will track

all men’s jeans and

basics with RFID

• 250 million items per

year

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RFID Focus Shifts to Items

• Studies show RFID

boosts inventory

accuracy from 65%

to 98%

• RFID ideal for items

with complex SKUs

(several colors and

sizes)

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Adoption Accelerates

• JC Penney tagging all jeans, bras, shoes

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• American Apparel soon In all stores

• Banana Republic in 100 stores

• Macy’s plans major rollout in Q3 of this year

European Retailers Rollout

Gerry Weber, a Germany maker of women’s

clothing, is using RFID to reduce theft and

improve inventory visibility

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European Retailers Rollout

Charles Vögele, an Austrian retailer, is

tracking goods from Asia to stores in Europe

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Adoption in Europe

Patrizia Pepe, an Italian

fashion house, has more

than doubled the amount of

products that each DC can

handle per hour

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Adoption in Europe

Finnish clothing designer Naisten Pukutehdas

(NP) reduced out-of-stocks for its NP Collection

by 30% and cut receiving time 70%

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Adoption in Europe

Throttleman, a Portuguese retail chain,

receives tagged items from India and uses

RFID to ensure the right items are sent

to the right stores

RFID Is a Better Way to Count

• Faster than bar codes

• Less expensive than bar codes

• More accurate than bar codes

• Automatic (in some applications)

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Apparel Will Drive

Adoption

• 150 retail stores in

U.S.

• $1 trillion sold

annually

• Globally?

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Related Retailers Will Adopt

Jewelry

Electronics

Cosmetics

Auto parts

Sporting goods

RFID Will Spread to Other Retail

Categories

• 50,000 electronics stores in US

• 150,000 food and beverage stores

• 41,000 general merchandise stores

• 82,000 pharmacies / health product stores

• 50,000 auto parts stores / dealers

2002 US Economic Census

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Result:

• Hardware prices will fall

• Performance will improve

• Software solutions will

proliferate

• RFID will get easier to deploy

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• As prices come down and technology is easier to use, more applications will be viable

• RFID will be pushed back into manufacturing

• Logistics providers will adopt

• RFID will finally reach the mainstream phase of adoption

RFID Will Spread Beyond Retail

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