Today, RFID is reaching into many markets, but retail remains its stronghold. For SML, that is ideal, as its strength is in the retail market space, having produced 3 billion tags last year alone.

SML’s beginnings came in 1985, when it first started making labels for apparel, and expanded its reach into southern China. Dean Frew, CTO and SVP, RFID Solutions for SML, noted that SML expanded into RFID in 2010, acquiring a company in North Carolina and a software company in Dallas in 2013. SML’s RFID tags are UHF-based and are printed and encoded, and the readers used by the retailers efectively read the tags and gather the data.

“Today, SML makes labels for 600 brands, including adhesive and sew-in labels and hang tickets,” Frew noted. “We are a technology business with about 5,000 employees with 35 locations around the world. Apparel, footwear, home goods, electronics, fragrance and cosmetics are key markets.”

The RFID tag segment is a strong point for SML, which produces billions of its Inspire RFID tags annually as well as software to read them.

“One key differentiator is that we offer complete solutions; we produced 3 billion tags last year, plus we have the largest numbers of stores worldwide using our enterprise software,” said Frew. “We have a leadership position in our markets – we manage 450 million RFID tag reads on our software every week, doing about 75 million reads a day through Clarity, our cloud-based application.

“Our other differentiator is our service – we can deliver our tags in a day or two,” Frew added. “If I have a customer in Vietnam, I can have the order to them in a few days. Printing and coding happens in country.”

Frew mentioned the examples of Nike and Nordstrom, who use SML solutions for their retail operations.

“For Nike, we produce millions of tags for their shoe boxes and are also operational in their distribution centers in North America, providing them visibility at the item level,” Frew observed. “With Nordstrom, we provide tags to the brands that produce goods for them and leverage our organization and provide the enterprise systems to allow Nordstrom to do accurate counting and accurate pickup in the store.”

Frew said that without RFID, retailers typically operate around 65% accuracy. The need for inventory accuracy is especially critical today, as customers expect the products they order online for pickup at the store to be there when they arrive. If not, it leads to a bad experience with the customer, and the store may never regain that customer.

“When retailers think they have products and they don’t have it, it leads to order cancellation,” Frew pointed out. “Many retailers are going from 50% cancel rates down to 5% because they know what they have and won’t commit unless they know they have it.”

The opposite is also true: retailers may have products in their possession that they don’t realize, and therefore they are trying to sell it.

“There is also understatement when retailers don’t realize they have the product to sell,” Frew noted.

As for the future, Frew sees the supply chain as a great opportunity to incorporate RFID.

“We are getting to a place where the supply chain is the next frontier, as 15% to 20% of retail stores in North America and Europe are using RFID technology,” Frew observed. “We are seeing significant movement of retailers moving the technology up the supply chain. The next step is to take it to the supply chain to monitor inbound and outbound shipments from their stores. You can audit what the supplier actually sent you, and can eliminate inventory distortion.”

Another development is movement into self-checkout, and there is the potential for RFID to make even larger gains.

“We are seeing interest across the board for improved inventory accuracy,” Frew said. “We have seen sensitivity of chips improve. The reducing the RFID physics being a  challenge. There is movement in the food industry on the case level, and everyone is putting a price ticket on a item of apparel, but it is less natural on a case of food.

“Just like the barcode in 1974 on Wrigley gum, I think we are going to see RFID become standard in key markets, reaching saturation in the apparel and other marketplaces as well as natural expansion in food and pharmaceuticals, wine and spirits,” Frew concluded.