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Look at Me, I’m ILT: Passive UHF RFID Item-Level Tagging Market Opportunity Update

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Item level tagging, or ILT, is not a new concept or application in the RFID universe. In fact, ILT was an early vision for supply chains – the ability to track RFID-enabled items from the point of manufacture to the point of sale or point of delivery. The early vision for RFID-enabled ILT, however, differed from the early reality. RFID technology, especially passive UHF, was not ready for high-volume, low-cost ILT applications largely due to cost, performance and lack of standards. That is no longer the case. ILT is now a reality in a number of industries, but the road has been long. During this QuickCast, VDC's Mike Liard discusses some of the key trends in the burgeoning ILT segment and why both vendors and solutions providers, particularly those in the passive UHF space, can no longer afford to ignore it.

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Look at Me, I’m ILT: Passive UHF RFID Item-Level Tagging Market Opportunity Update

  1. 1. AutoID & Transaction Automation Practice Michael Liard – Director, RFID QuickCast Look at Me, I’m ILT: Passive UHF RFID Item-Level Tagging Market Opportunity Update March 2012 © 2012 VDC Research QuickCast AutoID & Transaction Automationvdcresearch.com
  2. 2. Recording Available A full audio recording is available for download at: http://vdcresearch.com/market_research/autoid/freeresearch.aspx © 2012 VDC Research QuickCast AutoID & Transaction Automationvdcresearch.com
  3. 3. About Us Market Intelligence for Technology Vendors & Investors  Direct-Contact Primary Market Research  Deeply Segmented Data  Expert Insights  Validated Results Custom Consulting Services for Your Most Critical Business Decisions  Research-Based Consulting  Transparent Tools & Methodology o Highly Customized Survey Guides & Output Templates o Sophisticated Market Estimate & Forecast Models o Detailed, Flexible Stakeholder Maps & Profiles o Industry Development Scenarios o Market Opportunity Fit Screening, Rating & Ranking © 2012 VDC Research QuickCast AutoID & Transaction Automationvdcresearch.com
  4. 4. Our Core Coverage Areas AutoID & Transaction Automation Embedded Hardware & Systems Mobile & Wireless Industrial Automation & Control Embedded Software & Tools Emerging Technologies © 2012 VDC Research QuickCast AutoID & Transaction Automationvdcresearch.com
  5. 5. Ways to Work With UsOur market research is the basis for the many other ways that VDC can help you to grow your business. Our clients rely on us toOur market research is the basis for the many other ways that VDC can help you to grow your business. Our clients rely on us toprovide actionable insights that support theirtheir most important strategic initiatives including: corporate developmentprovide actionable insights that support most important strategic initiatives including: corporate development projects,opportunity assessments and lead generation programs.projects, opportunity assessments and lead generation programs. © 2012 VDC Research QuickCast AutoID & Transaction Automation vdcresearch.com
  6. 6. Today’s Speaker Michael Liard Director, RFID Michael is VDC’s Director of RFID in the firm’s AutoID research practice. Michael serves as VDCs lead analyst and consultant on all proprietary research and consulting engagements involving RFID product, market or channel development. Michael has covered the RFID and broader automatic identification industry, including research and analysis for barcode, contactless, NFC and RTLS technologies and solutions for more than a decade. Prior to VDC, Michael was employed by ABI Research as Practice Director, RFID. He also worked for Accenture (formerly Andersen Consulting) in their Organization and Human Performance practice. Michael has contributed to and has been cited in various industry trade press and national publications, including national TV appearances. Michael has also been a speaker at a number of industry-related conferences. Michael was presented the “Excellence in Journalism Award” by AIM Global in 2011. He was the first industry analyst to receive the award since its inception. Michael graduated Summa Cum Laude from Providence College (Rhode Island, USA) where he studied Political Science (major), Business, Marketing, Finance, and Economics (minors).For complimentary insights and marketing data: http://blog.vdcresearch.com/autoid/ © 2012 VDC Research QuickCast AutoID & Transaction Automation vdcresearch.com
  7. 7. Today’s Agenda The Diversified Story of ILT Passive UHF ILT Tag Volume Remains Centered in Retail Apparel Key ILT Markets Being Driven by Anti- Counterfeiting & Authentication Recommendations for a Broader ILT Strategy © 2012 VDC Research QuickCast AutoID & Transaction Automationvdcresearch.com vdcresearch.com
  8. 8. The Diversified Story of ILT (Item-Level Tagging)ILT = A common theme with many variationsHigh frequency (HF) solutions historically successful in limited-range ILT  Luxury goods such as jewelry, designer goods, sports memorabilia, etc.  Early industry choice for ILT before emergence of low-cost, high-volume passive UHF tagging solutionsPassive UHF-based systems now dominate ILT volume, interest and activity  Passive UHF tags have a cost and range advantage vs. HF-based tags  Passive UHF tag volume now surpasses total HF tag volume due to ILT effortsWhat’s Hot and What’s Not for Passive UHF ILT  Hot right now = Retail Apparel  Heating up = FMCG (Fast Moving Consumer Goods)  Hot/Cold = Pharmaceuticals © 2012 VDC Research QuickCast AutoID & Transaction Automation vdcresearch.com
  9. 9. Passive UHF ILT Tag Volume Remains Centered in Retail ApparelPassive UHF Tag Volume for ILT applications exhibiting 50% CAGR in short term, even stronger growthpredicted through 2016 Global Shipments of Passive UHF Transponders for Item-level Tagging Segmented by Product Type (Millions of Units) CAGR 2010-2012 = 50% 1400 1200 1000 (Millions of Units) 800 600 400 200 0 2010 2011 2012 Retail Apparel Pharmaceuticals FMCG/Other ILT © 2012 VDC Research QuickCast AutoID & Transaction Automation vdcresearch.com
  10. 10. Key ILT Markets Being Driven by Anti-Counterfeiting & AuthenticationPassive UHF tagging happening to varying degrees in a number of key high-volume consumer goodmarketsPharmaceuticals  All eyes on Korean and government pharmaceutical tagging mandate  US will remain a laggard in pharmaceutical ILT  Other countries and pharmaceutical companies continue to investigate RFIDAlcohol  China & Korea ILT initiatives underway with volume ramping expected  Brand protection and consumer authentication are major objectivesM2M  Coffee pods and brewing system get the RFID treatment  New Keurig® VUE™ brewer and RFID-enabled consumables deliver authentication and personalizationOther FMCG (Fast Moving Consumer Goods)  Consumer electronics  Tobacco © 2012 VDC Research QuickCast AutoID & Transaction Automation vdcresearch.com
  11. 11. Recommendations for a Broader ILT StrategyVDC offers some high-level guidance to achieving success in burgeoning passive UHF ILT marketsTagging at source is critical for long-term success of ILT market  Tag application methods and services are key  Bulk encoding and mass serialization solutions/approaches are also critical  RFID integration must be as seamless as possible not to disrupt existing manufacturing processesIt is vital that alliances and partnerships are focused on the delivery of total solutionsVendors must develop strategies and co-branded market messaging that centers on theconsumer experience with RFID whether in-store, at home, or with mobile device interactionTag volume is but one indicator of an ILT market opportunity  Readers  Printers/Encoders and Applicators  Software  Services © 2012 VDC Research QuickCast AutoID & Transaction Automation vdcresearch.com
  12. 12. Strategic Insights 2012: RFID MarketFinal Deliverables:Track 1: FastForward: Insight for LeadersVolume 1: Authentication & Anti-Counterfeiting: The Next Wave of AdoptionVolume 2: RFID Exposed: The Naked Truth on the Benefits of RFIDVolume 3: TBAVolume 4: TBATrack 2: RFID Supply & Demand AnalysisVolume 1: AmericasVolume 2: EMEAVolume 3: Asia-PacificVolume 4: GlobalVolume 5: EPC UHF SolutionsCustom DatasetsVDC Research maintains the most extensive databases of vendor, channel and end-user data in the RFID industry.The information contained within this database is updated continuously and is the most comprehensive of itskind, offering highly granular and reliable market intelligence on nearly all leading and emerging RFID markets andopportunities on virtually any dimension. © 2012 VDC Research QuickCast AutoID & Transaction Automation vdcresearch.com
  13. 13. Thank You for Attending this VDC QuickCastFor more information please contact: Sherrie Nankin – Account Director snankin@vdcresearch.com | 508.653.9000 x119 Michael Liard – Director, RFID Drew Nathanson – Vice PresidentFor complimentary insights and marketing data: http://blog.vdcresearch.com/autoid/ © 2012 VDC Research QuickCast AutoID & Transaction Automation vdcresearch.com

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