The company’s new sales office in Dubai will serve what is a growing sector of RFID-using retailers in the region for apparel, footwear, and other goods.
Aug 07, 2023RFID technology use is forecasted to expand in the Middle East region as retailers are increasingly receiving UHF RFID-tagged goods in their stores. To address what it sees as an opportunity for RFID technology growth in this area, RFID technology company SML Group has opened a new location in Dubai, United Arab Emirates. The company aims to help propel retailers in their adoption of UHF RFID technology for inventory management.
In general, apparel and other retail activity is on the rise in the Middle East, according to Statista, which indicated that Dubai apparel revenue alone is $2.4 billion in 2023 and is forecasted to be about $3.2 billion by 2027. SML points to the increasing presence of passive UHF RFID tags in product labels provided to stores with a tool to improve their inventory visibility as their merchandise sales grow. That could mean fewer out-of-stock events at brick and mortal locations, while also enabling omnichannel sales from stores near a customer.
Worldwide, RFID use for these purposes has been surging - in the US, the RFID industry was estimated at $9 billion last year, while China is forecasted to reach $26.5 billion by 2030, according to a January 2023 report from ReportLinker. The Middle East market has been following behind that growth, but SML anticipates that RFID adoption at a large scale is imminent.
SML Group already has offices in 20 countries, providing item level RFID traceability with UHF RFID inlays, labels, and packaging to enable automated, unique identification of products. It also offers its Clarity software platform as a full solution to capture and manage RFID data, as well as printing and encoding (as a services bureau or in-plant printing service).
To help brands and retailers build and test solutions for their enterprises, SML also has opened innovation centers, known as Retail Ideation Space sites in the UK and US, as well as in China. (See SML Opens U.K. RFID Ideation Space - RFID JOURNAL, SML Opens Retail Ideation Space for Item-Level RFID - RFID JOURNAL, and SML RFID Opens Retail Ideation Space in China - RFID JOURNAL.)
Expanding Opportunity for RFID
Some Middle East retailers are already deploying SML-based solutions for item level visibility, says Dean Frew SML Group's senior VP and CTO of RFID solutions. Companies in this region often operate within franchise models, in which a global brand sends RFID-tagged goods to franchises in the United Arab Emirates, Kuwait and other countries to be sold in local stores.
Dean Frew, SML Group's Senior VP and CTO of RFID solutions
For example, women’s apparel retailer H&M has been applying RFID tags to its merchandise at the point of manufacture, and those tagged goods are being sold at franchise locations worldwide, including the Middle East. Stores there can then implement their own RFID solution to read the tag IDs of products, capture inventory data on a regular basis with a handheld RFID reader (ensures that stock is up-to-date), and trigger replenishment orders or locate missing items to ensure goods are available for customers. The franchiser for H&M brands, Alshaya Group, is among Middle East companies working with SML Group’s partners to deploy RFID technology in their stores.
H&M has more than 100 stores in the Middle East that are deploying RFID solutions. “What we saw was the opportunity as more and more products are being tagged,” Frew says. “I think it's a good illustration of retailers who are starting to really see that the technology can benefit them.” He adds, “We're seeing an expansion in the Middle East like we are in other regions of the world like Central America and South America.”
In fact, when it comes to apparel, “Dubai is a very hot retail market,” he says, serving as a hub for retail activity around the region.
Starting with the Sales Office
Initially, SML has opened a single sales office in Dubai which has been open for business since the spring. Over time, this may expand to some engineering personnel for product development. Already, says Frew, “we've got a number of projects that are active with other retailers,” although he declined to name the companies. “We see the opportunity there, and we've seen good traction in the marketplace in that space.”
Middle East retailers face the same challenges that are being addressed around the world, namely managing inventory better and satisfying customers; whether they are shopping at a brick-and-mortar store or online. Thus far, the Middle East is experiencing an increased demand for RFID solutions across four key areas, says Frew: apparel, footwear, fragrance, and cosmetics, and lastly, home goods.
Another growth area for which RFID deployments are underway around the world, electronics, has not gained traction yet in the Middle East. Electronics tagging is being driven in fact by a few large brands and retailers in other parts of the world. Walmart is now requiring RFID tags be applied to electronics, for example, while in Europe Tesco cell phones with Tesco Mobile are also using RFID technology to uniquely identify each mobile phone. “We haven't really seen that in the Dubai Middle East region yet,” Frew says.
By opening an office in Dubai, the company hopes to further energize and accelerate RFID adoption in the Middle East. Although the sales office will be serving companies throughout the region, SML currently has its technology deployed in about five countries so far, says Frew.
Key Takeaways:
- The new sales office in Dubai is intended to situate SML at the heart of retail RFID growth in the Middle East.
- SML is working with multiple retailers in the area to build out solutions that leverage RFID tags on goods for inventory management.
