Retail and CPG

Consumer Packaged Goods vertical accounted for $209.9 million in 2003 and is expected
to grow to $2.03 billion by the year 2012. Automotive vertical accounts for 19% of the total RFID market.

Retail vertical accounted for $132.5 million in 2003 and is expected to grow to $1.28 billion by the year 2012. Retail vertical accounts for 12% of the total RFID market.

RFID offers some of the most promising applications for warehousing operations. Readers can automatically monitor the shelf location, secure storage area, or container yard, in a warehouse, and automatically record all movements. Once reader data is integrated with enterprise networks and business applications (such as WMS), it will be possible to create business rules and workflows that can track exceptions. Some analysts suggest that warehouse labor expenses can be reduced by 6-9 percent by implementing RFID.

RFID can help the retail sector by improving inventory management and product availability, as a result of improved warehouse and distribution center operations. These
benefits are similar to those of a manufacturer or supplier. Specific retailer benefits include improved shelf availability, thereby revenue, even while reducing inventory. Estimates vary but most analysts agree that a well-designed RFID system can help reduce out-of-stocks by 0.06-0.08 percent, while reducing inventory by 4-6 percent. This may seem like small percentages, but can translate into huge dollars for large retail chains. Downstream benefits include theft prevention, better business intelligence, and improved customer satisfaction.

Source: MARKETSTRAT INC, © 2005