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Disconnect in Retail RFID Pushes Suppliers to Develop Unique Approaches
Online staff -- Electronic News, 3/21/2005
Although the RFID supply chain mandates launched by big retailers such as Wal-Mart and Target are well documented and understood, many other retailers are experiencing problems and frustration when they try to apply RFID in the same way, according to the latest findings from ABI Research.
The reason for these problems is a disconnect between RFID manufacturers -- many of which are relatively new companies that don’t understand retail -- and the retailers themselves that don’t understand how RFID can benefit them. This leaves retailers frustrated and slows down market adoption, the Oyster Bay, N.Y.-based firm said.
“There’s no cookie-cutter approach to RFID,” said Sara Shah, analyst at ABI Research, in a statement. “Wal-Mart’s approach is creative. 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."
As a result, many retailers turn to their usual consulting companies that are rarely early adopters of new technologies and are known to be content to let ideas mature before getting involved. They are often less creative and imaginative, ABI Research also noted.
Beyond supply chain management, nobody knows how many ways RFID can be used; known applications include security and “backdoor theft” prevention, contactless payments, advertising and promotions, the firm pointed out.
Shah advises retailers to consider smaller consulting firms that more likely contain people who can find new ways to use RFID. However, many of those small creative integrators lack the resources to execute system-wide rollouts for large clients, she said.
To help grow the market, ABI Research concludes that RFID vendors should educate themselves about retailing and develop solutions to retailers’ problems, not just one-size-fits-all products.
