INDUSTRY NEWS
Robust Growth Forecasted for Real-Time Location Systems by Robert L. DiLonardo
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ccording to a recently published study by MarketsandMarkets (marketsandmarkets.com), the global real-time location systems (RTLS) market is expected to grow at a compounded annual rate of 31.2 percent from 2013 to 2020 and reach $3.70 billion in 2020—about six times higher than the current estimated revenue level. What is RTLS, you ask? Why is it going to be important in retail loss prevention? Typical RTLS systems consist of operating software with a graphical user interface; computer and communications hardware, such as readers, routers and network infrastructure; and battery-powered radio frequency identification (RFID) tags with above-normal capabilities, such as two-way communications or the ability to display prices. These solutions allow anyone from homeowners to large enterprises to identify an asset with real-time visibility, to add an additional element of security, facilitate operational efficiency and in-store execution, or improve productivity. In layman’s terms, it is a combination of RFID, small-scale “global positioning” (GPS), and tracking. Large companies such as Airbus (France), Aston Martin (Germany), BMW (Germany), and Caterpillar (US) use RTLS solutions in manufacturing operations. Primitive asset-tracking systems have been around since the late 1980s, predominantly in the healthcare industry, where they continue to be used to track physical assets as well as patients. The component list was essentially the same—battery-powered RFID tags with minimal usable bits of memory; readers [think proximity access-control readers indoors, and detection loops for vehicles]; and a computer to handle the identification matching and processing of the other data required by the application.
Retail Barely Scratching the Surface
Over the past five years, a few retail security equipment manufacturers have developed much more robust RTLS systems to identify, track, and protect merchandise; manage specific safety and operational issues; and take advantage of merchandise marketing opportunities. Up until now, sales to end-user retailers have been slow to materialize mainly because of limited feature functionality, an unfavorable cost-benefit calculation due to the high initial cost of the system components, as well as the recent weakness of the economy. Another adoption issue has been the inevitable customer pushback in allowing any needed interfacing between the
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supplier and the inventory databases of their retail customers. Yet another is the recent focus upon spending for point-of-sale system upgrades, mobile communications hardware, moving data to the cloud, and Omni-channel marketing initiatives. All of these endeavors are expensive and compete with RTLS systems for available capital. However, there have been a couple of small-scale, but notable success stories. Protecting Expensive Handbags. WG Security Products offers its Sentinel System, which includes WiFi readers, tags, and management software. Bloomingdale’s has been using it for about two years to locate, track, and manage the movement of expensive Chanel handbags that range in price from $4,000 to $12,000 each. These handbags “move” in two primary instances—when a personal shopper needs to show it to a prospective customer, or when the display department wants to feature it on the selling floor. In this application the system isn’t required to track movement. Its primary purpose is to verify that the merchandise is located where it has been assigned. Bloomingdale’s management stated that no handbags were lost in 2013. Tracking Display Shoes. Alpha High-Theft Solutions, a division of Checkpoint Systems offers an RTLS system called S3intelligent that is used by a leading department store in the US for display compliance in its shoe department. The system addresses three issues that most retailers face when selling shoes: How to get shipments of new shoes displayed as quickly as possible? How to notify associates if a shoe is not on display? How to relocate and change prices on shoes that have been marked down to clearance areas within the departments? The S3i Price Tag application is supported by a low-power, wireless network, and provides real-time information indicating which shoes are on display and which are not. With more than 5,000 tags in four test locations across the Southeast during the past eight months, results have been dramatic—a 17 to 20 percent increase in sales and a positive display audit variance of over 8 percent compared to control stores. Its usage has eliminated the need for manual shoe audits and price changing—adding an element of labor savings to the benefits mix.
The Cloud and the Internet of Things (IoT) Will Facilitate RTLS Adoption Rates
The key drivers of the future growth of RTLS systems will be the proliferation of the so-called “cloud” and the Internet of Things (IoT). We know that the cloud is capable of storing and facilitating the retrieval of an unfathomable quantity of data. In that capacity it has simplified data storage and connectivity issues, and made everything much more affordable and less complex. The continued growth of the cloud will provide momentum to end-user investments in RTLS technology. The Internet of Things is a scenario in which objects, animals, or people are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction. IoT is evolving from the convergence of wireless technologies, micro-electromechanical systems (sensors and tags), and the Internet. To provide a bit of scope, Gartner Research estimates that there will be nearly 26
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