In the West
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To a large extent, retailers in the West are driving the adoption
of item level RFID with potential for over 100 billion tags
a year. Unlike East Asia, the leading retailers in the West
are extremely powerful and aggressive and they already insist
on suppliers fitting anti-theft tahs at their expense, not the
retailerfs expense, although almost all the benefit of
this is enjoyed by the retailer.
With RFID, the retailers also see the potential to enjoy cost
reduction with the suppliers paying most of the cost. Indeed
Western retailers see a potential for increased sales from item
level RFID because it can reduce stockouts - empty shelves and
help in other ways.
For the West, Consumer packaged goods CPG item level tagging,
as it evolves, will once again mean "big is beautiful" in supply
and retailing but it will be another example of transfer of
power from suppliers to retailers. It will also strengthen those
retailers that also manufacture or control own brands for most
or all of their sales. For example,
The need for supply chain efficiency and lower stock-outs on
the shelf make specialty apparel retailers with vertically integrated
manufacturing - like J. Crew, and The Limited in the US and
Marks & Spencer and Benetton in Europe - a natural fit for item-level
tagging, though not all of them are showing the same enthusiasm
for the opportunity.
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In East Asia
In East Asia, large retailers are rarely seen but there are many large manufacturers. These manufacturers supply a high proportion of the goods sold in the West so they must obey mandates from Western retailers concerning RFID.
These mainly relate to tagging cases and pallets though Wal-Mart has demanded that Type 2 (narcotic) drugs be tagged at item level ie the pack of pills you have in your home. However, there the similarities end.
In East Asia the manufacturers seek RFID to make their production more efficient and there are major government initiatives to develop ubiquitous RFID where the tags have sensors. In Korea and Japan there are trials on tagging books at manufacture, something not yet seen in the West.
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