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Aberdeen on Best-in-Class RFID Adoption in Retail

Aberdeen Group has released the latest installment in a series of reports on RFID adoption. Entitled , the report is available free for a limited time. This article is the executive summary, contributed by report author Michael Dortch.
Tags: Retail
Apr 04, 2008This article was originally published by RFID Update.

April 4, 2008—Aberdeen Group has released the latest installment in a series of reports on RFID adoption. Entitled RFID in Retail: The Truth Behind the Hype, the report is available as a free download for a limited time. Following is the executive summary, contributed by report author Michael Dortch.

RFID in Retail: The Truth Behind the Hype

While many retailers appear to remain hesitant or skeptical about radio frequency identification (RFID) technologies, Aberdeen research indicates that many early adopters enjoyed significant initial business benefits, and are building upon those. In March 2007, Aberdeen research revealed that retailers are increasingly considering RFID adoption to improve the customer experience and inventory visibility. As a follow-up, Aberdeen surveyed over 150 companies in the retail industry throughout February and March of 2008.

RFID in Retail: The Truth Behind the Hype analyzes those survey results and additional interviews to explain how RFID is currently being used to deliver increased customer satisfaction and inventory accuracy, among other business improvements. The study also explores which RFID technology components are dominant in the retail industry, future RFID implementation plans, general perceptions, and best practices for RFID for in-store use.

Best-in-Class Performance

Aberdeen used three key performance criteria to distinguish Best-in-Class retailers. Based on these indicators, Best-in-Class retailers enjoyed the following performance improvements:
  • Customer satisfaction has increased over the past two years by an average of 12%
  • 94% have improved employee productivity
  • 78% have increased inventory turns by an average of 5.4%
Competitive Maturity Assessment

Survey results show that the retailers enjoying Best-in-Class performance shared several common characteristics:
  • Best-in-Class retailers are 80% more likely than all others to use RFID to improve in-store asset tracking efficiency
  • Best-in-Class retailers are nearly 11 times as likely as Laggards to enable customers to access current inventory levels and detailed product descriptions
  • Best-in-Class retailers are 80% more likely than Industry Average and are 3.6 times more likely than Laggard companies to have adaptable organizational cultures that embrace innovation
Required Actions

In addition to the specific recommendations in Chapter Three of this report, to achieve Best-in-Class performance, retailers must:
  • Find and go after opportunities now. RFID is being adopted by retailers worldwide, while costs fall and integration eases, compelling those not yet pursuing or researching RFID opportunities to get off the sidelines and into the game.
  • Centralize RFID and other data. To achieve the "one version of the truth" essential to business success, companies must start aggregating data into one warehouse - or at minimum, enabling consolidated, actionable information views, tailored to user roles.
  • Be open to change and risk. As the aphorism goes, "no risk, no reward." Innovations such as RFID provide both challenges and opportunities never seen before, but only to those retailers willing to take on the challenges and seize the opportunities.
The full report, available free on Aberdeen's website, discusses each of these points and many others in detail.
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