Networked clothing that can show you where it is at all times, talking to mirrors and shelves on the shop floor, is no longer the stuff of science fiction, but a reality developing rapidly in stores around the globe.

Radio Frequency Identification (RFID) tagging is taking apparel retailing to a whole new level, with an uptake that shows no signs of slowing.

RFID - as the name suggests - is based on radio technology as a means of identifying objects. RFID in its simplest terms uses a reader or transceiver that can determine and identify radio waves and a source or transponder that emits them.

American scientist and entrepreneur Mario Cardullo is largely credited with the invention of modern-day RFID, following his patent of an RFID transponder and reader in 1973.

His idea was developed for an automatic highway toll system that would allow a uniquely identifiable tag to be transported on objects such as a moving car. As supporting technologies developed, so did RFID, and the technology has become ubiquitous in systems like anti-theft barriers, tickets, keyless locks and smart cards.

A major turning point came in the late 1990s when university research laboratories and corporate partners founded a research lab called the Auto-ID Center at the Massachusetts Institute of Technology to investigate the possibility of low-cost tags that could have a wide-scale commercial application in the supply chain.

They developed the first comprehensive global standards for RFID tagging, and most importantly the concept of hooking up RFID 'tag and trace' data to the Internet, or what has become known as the 'Internet of Things'.

Apparel uptake
Uptake of the technology had uncertain beginnings in the apparel supply chain. Until relatively recently, standards were unclear and many systems had difficulty accommodating RFID data collection or use.

Suppliers and manufacturers found logistical advantages in tracking pallets through the supply chain, but item-level tagging in retail scenarios lagged, hampered by a high cost per unit and a lack of perceived return on investment (ROI).

This is changing. Item-level tagging has been stimulated by the decreasing prices of RFID tags over the last few years and the entry of several major players with significant purchasing and decisional power into the market.

One of the first and largest was Britain's Marks & Spencer, with its huge throughput of 350m garments a year sold in the UK alone. Marks & Spencer has been experimenting with item-level tagging since 2003 and the technology has become widely used throughout its stores.

Other European companies were close on its heels. Gerry Weber in Germany now tags 25m garments a year and even clothing retailers with complex supply chain logistics that stretch from Asia to Europe, such as the Swiss Charles Vögele Group, have installed RFID.

American Apparel led the way in the United States, conducting extensive trials with global RFID supplier Avery Dennison in its New York stores in 2007 before rolling out the technology across its production.

The story repeats throughout Asia. IT'S International, a consortium of Japanese clothing manufacturers and retailers, began rolling out item-level tagging in its flagship Tokyo store in February this year.

High-end Chinese brand Jossy Jo has also begun a large-scale rollout to individually tag 2m garments a year, hoping to eliminate counterfeiting and increase logistics efficiency by 40%, according to technology supplier UPM Raflatac.

Dr Peter Harrop, chairman of IDTechEx and author of the major independent market research study 'Apparel RFID 2011-2021', says that around 100 global retailers are now either trialling or rolling out item-level tagging.

Retail's tangible benefits
"The fastest growing sector of RFID in apparel is in retail, because there have been tangible benefits. It's a rare case in RFID that is being pushed forward by payback from the free market instead of funding from governments," he says.

Payback has been significant for many retailers in terms of logistics, inventory and stock management. According to the Avery Dennison report on the American Apparel trials, staff hours dedicated to inventory were cut by 20-30%, with reported sales increases of 14% in stores using the RFID system to rapidly replenish shelves.

The world's largest retailer Wal-Mart - which was already using RFID in its distribution centres - began item-level tagging in August 2010, provoking furious speculation about RFID growth in 2010.

Just how this major player (which could soon be tagging hundreds of millions of garments a year) will affect pricing and supply of tags is not yet apparent, but RFID manufacturer ODIN technologies showed in its latest 2010 Tag Price Guide that RFID tags were stabilising in price for the first time in years.

"Macroeconomic market dynamics are the culprit for tag prices remaining at 2009 levels," said the report, which goes on to identify the recession (and producers seeking to maximise profit), tag silicon shortages and unprecedented demand driving the trend.

Critics of track and trace capability
So RFID has produced real benefits, but it has not been without its critics.

Privacy advocates particularly have been vocal protesters about the track and trace capability of the technology. Although the RFID tags on a garment do not store personal information, retailers can and do track the movement of an RFID-enabled garment inside a store.

Critics like high-profile privacy advocate and US-based CASPIAN (Consumers Against Supermarket Privacy Invasion and Numbering) director, Katherine Albrecht, say that the possibility of linking item-level RFID data to other personal data sources like a credit card poses significant risks to an individual's privacy.

Legislators have also been taking notice. In May 2009, the European Union (EU) produced an important recommendation on the implementation of privacy and data protection principles in applications supported by radio-frequency identification.

The recommendation stresses the need for consumer notification about the use of RFID technology and the importance of the deactivation of a RFID tag on leaving the retail environment - unless the consumer specifically requests otherwise, to preserve for example care instructions or authentication information that might be embedded in a sewn-in tag.

A consumer must also be able to verify that a RFID tag has been deactivated.

The recommendation goes some way to standardising regulation of the technology, at least in Europe, while an overarching technical and ethical framework slowly emerges, thanks in large part to the work of EPC Global.

EPC Global is a subsidiary of not-for-profit global standards organisation GS1. It comprises public, industry and technical subscribers, with board members drawn from institutions such as the US Department of Defense (one of the largest public buyers of RFID chips) as well as commercial enterprises such as Metro AG, Proctor & Gamble and Wal-Mart.

The organisation actively develops and promotes global standards that have been widely adopted, including by the International Organization for Standardization (ISO) for the ISO/IEC 18000-6 standard on Radio Frequency Identification for Item Management.

By Lee Adendoorf.