A recent announcement from Wal-Mart may skirt around the impasse that is slowing the adoption of RFID. This impasse is typical of those that occur in new technologies; potential adopters consider the technology too expensive and potential investors and developers are reluctant to move forward in an unproved market. In this case, the reluctance is compounded by resistance on the part of privacy advocates, who believe RFID will provide a means for big brother – either corporate or government – to track our behavior and movements. It’s also true that large capital investments by retailers are needed, and these are not likely given the current state of the economy.

The impasse isn’t being broken by a technological breakthrough, but instead being skirted by a higher valued application. The expected application, replacement of barcodes by RFID tags, is still too costly, with tag prices remaining at $.07-$.10. Instead, the new application is the tracking of apparel on the sales floor, to ensure that all sizes and styles are on display. Stores that have piloted this application has seen apparel sales grow by as much as 14%. In-store inventory tracking is expected to improve as well. Wal-Mart is beginning to roll out this application in its stores.

So what does this have to do with ink jet? Nothing directly, but it does promise bring the subject of RFID back to the fore in the retail environment. After all, everything Wal-Mart does is then considered by virtually every other retailer. This in turn may help to break the impasse and stimulate new investment.

The expected role for ink jet remains smaller than in previous years (see The Ink Jet Blog for May 5, 2010). The printing of antennas has fallen into disfavor with increases in the price of silver, and if they are printed, it will likely be by conventional printing technology. But ink jet has unique benefits in the field of printed electronics, and the printing of RFID chips in a-roll to-roll process will be vital to driving tag costs down to the $.01-$.02 that is needed for large-scale adoption. It seems likely that printed silicon, such as that under development by Kovio, will be the first to market.

Visionaries believe that eventually, we will see RFID chips and antennas printed simultaneously with the printing of packaging. In that scenario, ink jet may play a much larger role.