Although actual usage of RFID technology in retail applications is still in its infancy, its potential for implementation throughout the industry is growing ever stronger. Currently, many retail operations are engaged in crafting implementation strategies for incorporating RFID into their businesses. Here are some of the advantages and disadvantages they are discovering and the logical steps leading to full implementation they are most likely to employ.
Potential Advantages of RFID for Retail
- Enhanced inventory control: The thinking here is that the benefits RFID provide to product visibility, and how that reflects on better control of inventories, results in better customer experience outcomes. This is especially valid amongst the larger retail chains where customers searching for specific products are able to search online for which stores currently have the product in stock and available for immediate sale.
- Enhanced product identification: One of the many benefits of RFID tags is the capacity to store distinctive identification numbers as well as modest amounts of data that enables individual items to be identified and tracked from virtually anywhere in the store.
- Reduced checkout times: Imagine a shopper filling a shopping cart and having the entire contents of that cart scanned and paid for without having to remove even one single item. RFID makes this form of auto payment not only possible but preferable.
Potential Disadvantages of RFID for Retail
- Cost of implementation: Incorporating RFID into retail operations is not inexpensive and requires a substantial capital investment. Scanners alone can cost many thousands of dollars, and considerations beyond the costs of necessary hardware include potentially costly system changes throughout the organization.
- Matters of security and privacy: This is a primary concern for retailers not currently utilizing RFID. So how much more so for those retail companies contemplating introducing a whole new technology to their customers that presents the possibility of even new security and privacy concerns.
Strategic Steps to Implementation of RFID for Retail
Many retail organizations have weighed the pros and cons of RFID and have made the decision to implement the technology into their operations. Having done so, the questions involved in how to best move forward in terms of planning, investment and organizing the new systems into a viable whole become a main strategic focus of management. Here are some tried and true steps that can make the implementation process flow more smoothly and help to accelerate ROI.
- Seek initial buy-in of end users: Because RFID touches so many facets of the retail environment it is critical to focus early on in the planning process at achieving a buy-in from the end users of the new technology. Too often, this step is overlooked due to focusing too heavily on hardware and software integration and on a buy-in from management.
- Focus initially on measurable results in inventory control: There may be a tendency for retailers to expect immediate quantifiable results in every operational aspect of the business. Truth is, it may take more time in certain areas than in others to fully integrate the new RFID technology into the business as a whole. Instead, focus on inventory control where immediate measurable results are most likely to lead to not only better visibility but also increased sales.
- Provide for a structure to manage project problems: In order to better facilitate full implementation of RFID into the retail environment consider establishing a project management group with responsibility for identifying and solving project problems as they occur so that they do not create lengthy roadblocks which might impede full operational integration.
- Establish an on-site team dedicated to keeping the focus on smooth implementation: This group serves as the eyes and ears of management in helping to ensure that each operational area involved in the transition to full implementation of RFID is provided with the face-to-face communication so vital to ensuring the strategic vision flows to every level of personnel.
- Provide a clear, definable roadmap for measurable accomplishments: This is critical not only for internal departments such at loss prevention, IT and finance, but also for vendors responsible for hardware and software. Avoid lengthy reports on status in favor of those that highlight already defined milestones and deliverables.
- Emphasize supporting and underlying data that is clean and precise: As new and more concise layers of visibility are experienced throughout the operation due to RFID technology make sure that anecdotal stories are thoroughly quantified. This is especially important for all departments consisting of cross functional teams.
While RFID is not yet dominant in retail it remains a force for those progressive organizations that have come to realize the potential inherent in the technology as it relates to their operations, and who are currently involved in analyzing and planning on how it might best serve their future interests.