March 15, 2005, 12:00 AM

U.S. leads, but global retailers are taking to RFID, report says

A new survey from Deloitte and Retail Systems Alert Group reports that 70% of global retailers with annual sales above $5 billion are investing in RFID and will implement some form of RFID in the next 18 months.

While the RFID initiatives of Wal-Mart Stores Inc., Target Corp. and Best Buy Co. Inc. have gotten all the publicity, retailers around the world are not far behind in their RFID plans, says a new survey from Deloitte and Retail Systems Alert Group. The survey reports that 70% of retailers with annual sales above $5 billion are investing in RFID and will implement some form of RFID in the next 18 months.

The survey reports:
• 75% of companies expect increased revenue from RFID within the first five years of implementation.
• In 2004, most companies allocated less than $500,000 for RFID directly. Most companies reported, however, that they believe they allocated sufficient money for RFID in 2004.
• Few manufacturers expected to tag more than 50 SKUs in 2004, but European manufacturers didn’t tag any SKUs during the year.
• Most companies are not looking at SKU-level implementation until layer adoption issues, such as technology standards, cost, and distrust of IT departments, are resolved.

RFID-radio frequency identification-uses tags on pallets, cases or products that emit radio signals to readers that retail and manufacturing can access via the web to track product movement.

“Many are still eyeing up the opportunities and thinking about where this technology could strategically take their businesses,” says Mike PreFontaine, partner in the consumer business practice at Deloitte. “To some extent it will be a case of wait and see where the majors go with it first. In the next one to two years we expect to see major activity from the heavyweights and this will pave the way for the small and medium sized enterprises.”

The survey “RFID: How Far, How Fast: The State of RFID,” was released today at the Retail RFID Technology Symposium, a pre-show symposium held as part of Global Retail Technology Forum this week in Barcelona, Spain.

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