RFID continues to cause problems for retailers

Related tags Rfid Supply chain management

As cosmetics and personal care suppliers in both Europe and North
America race to meet RFID deadlines, a new market report reveals
that many retailers are still finding problems and frustrations
when trying to implement the technology at a grass roots level,
reports Simon Pitman.

ABI Research​ analyst Sara Shah says, "There's no cookie-cutter approach to RFID."​ ABI's study finds a disconnection: RFID manufacturers - many of them relatively new companies - don't understand retail; and many retailers don't understand how RFID can benefit them. This leaves them frustrated and slows down market adoption, the research company reports.

Entitled, The RFID Retail Market, the report examines how retailers are adopting RFID and the ways they will realise a return on investment, as well as the possible business process changes it will entail.

"Wal-Mart's approach is creative,"​ says Shah. "It's very worthwhile for them, which is why they're pushing forward on schedule. Other retailers follow, thinking that Wal-Mart's business case will apply just as well to them. But it may not work, because every business and every supply chain is different."

This means that many retailers turn to their usual consulting companies - often one of the largest half-dozen. But big consultants are rarely early adopters of new technologies; they are normally content to let ideas mature before getting involved. They are often less creative and imaginative, ABI says.

Beyond supply chain management, nobody knows how many ways RFID can be used; known applications include security & 'backdoor theft' prevention, contactless payments, advertising and promotions. Shah advises retailers to consider smaller consulting firms, where they'll find people who can find new ways to use RFID. Unfortunately, she adds, one of the drawbacks is that many of those small creative integrators lack the resources to execute system-wide rollouts for large clients.

From ABI's research it seems evident that, for their part, RFID vendors need to educate themselves about retailing, and to develop solutions to retailers' problems, not just one-size-fits-all products.

Related topics Packaging & Design

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