Apparel RFID 2008-2018
Aug 11, 2008 Dr Peter Harrop
In 2008, the total money spent on RFID tags and systems for apparel will be $68 Million, which is a huge 38% of the total amount spent by retailers on RFID globally. This reflects the surge in activity of apparel tagging given the demonstrated business case by an increased number of retailers. By 2013, the amount spent on apparel RFID will rise to $988 Million.
The pioneers of RFID on apparel
First came laundries tagging rented apparel etc. That is now commonplace but not a very high volume market. After that, came retail apparel, where a huge number of trials have taken place over the last ten years but very few rolled out to a full adoption. In parallel, certain other parts of the retail apparel value chain saw some adoption such as the tagging of rolls of cloth and the tagging of cases and pallet loads under retailer mandates.
Marks and Spencer in the UK was first in the world to tag apparel in shops in a big way and in 2010 it is on track to have these disposable swing tags on all its 350 million items of apparel passing through yearly, the payback - primarily from reducing stockouts - being an unmissable one year in the estimation of IDTechEx. This is despite the tag not being interrogated at the checkout and not usually present on returned goods because it is large and the first thing to be removed by the customer after purchase. The company has bought more RFID tags than any other retailer or consumer goods company (CPG) in the world.
Recently, Lemmi Fashion of Germany and others took the decision to do the same, tagging apparel in Germany. Companies have remained quiet about the payback, given the competitive advantage, but some have stated the benefits. For example, American Apparel reported that inventory availability during a trial exceeded 99 percent and sales increased by 15 to 25 percent when all items were available on the floor. The value of each piece of apparel versus the cost of the tag makes a strong payback calculation.
200 million tags in 2008
In 2008, approximately 200 million tags will be bought for apparel, with 75% of that bought for Marks and Spencer, the others being for companies such as Sumitex International, Lemmi, Sungod Enterprises, NP Collection, Sanyo Shokai, Throttleman, VF Corporation and Tomorrow's Mother.
Most other forms of consumer goods beyond apparel are later in adoption of RFID at item level because they are more troublesome technically. This is because so many of them involve metal and water and a greater challenge to RFID pricing because so many of them are much lower in price than apparel. It is rare for payback calculations to justify a tag costing more than a few percent of the value of the product it is on.
Distribution of users by country
The new 260 page IDTechEx report finds the distribution of apparel RFID users by country as shown below. These studies mainly concern the item level retail apparel chain assessed above but they also include cloth in manufacture, pallet loads and cases in transit and apparel in industrial laundries.
The distribution of users of apparel RFID by country
Source IDTechEx report RFID in Apparel 2008-2018 www.IDTechEx.com/apparelRFID
Thus Japan and Germany have a great breadth of activity. The USA is nominally similar but within that group are many projects now abandoned. The UK has few projects but one - Marks and Spencer.
East is different from West
The research carried out reveals that manufacturing is largely driving RFID in apparel in East Asia because of the huge and powerful manufacturing base there seeking cost reduction and improved response. Where retailers are involved with RFID in East Asia, they seek improved customer service in the main, though cost reduction is of interest as well. In the West, the manufacturers are rarely taking a lead and the retailers are often very involved but usually with the objective of cost reduction.
New IDTechEx research
The new IDTechEx report "Apparel RFID 2008-2018" is unique in comprehensively analyzing the use of RFID in the apparel value chain, from tagging cloth in manufacture, to retail fashion and rented apparel. 142 users and suppliers are profiled. From Chile to Canada and Sweden to Taiwan, there is something to learn from all of them, not just from the unusually broad approach in Germany, Italy, China, Japan and the USA. This industry is on the move in a manner unmatched almost anywhere else in the RFID market.
Uniquely in this report you have the ten year forecasts by tag value and system value, lessons of success and failure and comprehensive profiles of leading players. There is a detailed explanation of the market, realistic appraisal of timelines of adoption and barriers, the technology and the many paybacks as well as what comes next.
This report of over 200 pages goes into detail about the RFID Apparel projects, covering 79 users in 18 countries. The report also profiles a representative sample of 63 suppliers of RFID products and services that already serve the apparel industry, from chip makers to system integrators. Profusely illustrated the report is both readable by newcomers and informative for experts.
For further information, and to order the report, visit www.idtechex.com/apparel
Save 20% on this report until August 31 2008 by using the promotional code RFAPP at www.idtechex.com/apparel. Order the product and in the promotional box type in RFAPP for the discount to apply.
To learn more don't miss RFID Europe 2008 on September 30 - October 1, held in Cambridge, UK. See www.IDTechEx.com/RFIDeurope for details.
For more information, contact Raoul at raoul@IDTechEx.com or call or + 44 (0) 1223 813703 (UK).