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RFID Returns Investments Within 18 Months, Users Say
ROI will continue to be an important metric in the RFID market Liard says—a metric that vendors and users should continue to discuss and evaluate. He encourages companies to share their own ROI experiences, he adds, so that more companies can understand RFID's impact.
But Liard cautions companies to take a more holistic and comprehensive view of ROI. "ROI is a piece of the puzzle," he states. "You need to start getting into conversations about total cost of ownership. For example, what about maintaining the systems long term? And you should start talking about soft ROI and hard ROI. Soft ROI is very hard to measure. Say there's an item-level RFID system in a store with a customer-facing application. The warm and fuzzy a customer gets from the shopping experience because of that application is pretty hard to quantify, but it matters—and that's the soft ROI. Hard ROI is easier, such as RFID-tagged promotions put out on the store floor at the right time that coincide with a measured uptick in sales."
Despite the rough economy, Liard says, RFID projects are moving forward. In some cases, projects were already budgeted for, or were spared the chopping block because they were smaller and less costly than other larger, more expensive IT projects. "And in some cases," he notes, "the ROI was so compelling that companies believe RFID will not only impact the bottom line, but also the top line."
During a recent survey conducted by RFID Journal of 100 end users and potential end users of RFID, three-quarters of respondents revealed plans to slow or reduce their RFID deployments this year due to the current economic conditions. However, 47 percent indicated they would do so only "somewhat" or "a little," while 20 percent predicted the economic downturn would not impact their deployments at all (see End Users Plan to Invest Strategically in RFID in 2009).
The RFID Journal survey also found that approximately 35 percent of respondents said their companies are deploying RFID to gain a competitive edge, while 48 percent reported that they are choosing RFID applications that can deliver both a short- and long-term return on investment.
But Liard cautions companies to take a more holistic and comprehensive view of ROI. "ROI is a piece of the puzzle," he states. "You need to start getting into conversations about total cost of ownership. For example, what about maintaining the systems long term? And you should start talking about soft ROI and hard ROI. Soft ROI is very hard to measure. Say there's an item-level RFID system in a store with a customer-facing application. The warm and fuzzy a customer gets from the shopping experience because of that application is pretty hard to quantify, but it matters—and that's the soft ROI. Hard ROI is easier, such as RFID-tagged promotions put out on the store floor at the right time that coincide with a measured uptick in sales."
Despite the rough economy, Liard says, RFID projects are moving forward. In some cases, projects were already budgeted for, or were spared the chopping block because they were smaller and less costly than other larger, more expensive IT projects. "And in some cases," he notes, "the ROI was so compelling that companies believe RFID will not only impact the bottom line, but also the top line."
The RFID Journal survey also found that approximately 35 percent of respondents said their companies are deploying RFID to gain a competitive edge, while 48 percent reported that they are choosing RFID applications that can deliver both a short- and long-term return on investment.
