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What Problems Might RFID Technology Create for Retailers?

Posted By RFID Journal, 01.31.2014

Can you please provide some examples?

—Name withheld

———

First, let me note that radio frequency identification greatly benefits retailers, by giving them the ability to manage and replenish their inventory far more effectively, as well as better serve customers. But vastly improved operations do not happen magically.

Retailers will need to figure out ways in which to manage item-level data. Each product having a unique identifier is a fairly big change. Suppliers will need to work out strategies for ensuring that tag ID numbers are not duplicated, but retailers will also need to be sure that data associated with specific RFID tags is up to date. If tags are going to be killed at the point of checkout (which is not likely), then retailers will have to manage serial numbers associated with unique tags.

Another issue will involve the authentication of goods. Retailers will want to ensure that, say, the Coach handbag they are selling is real, and not some cheap knockoff. That means they will need to find methods for authenticating tags with the manufacturer.

These are technical challenges that should not be too difficult to overcome. There are also some cultural challenges that might crop up, in terms of sharing information with suppliers. Some retailers penalize suppliers that do not deliver the correct goods to the right store, with fees known as chargebacks. RFID will enable suppliers to document that every item was delivered to a retailer. Stores also sometimes charge suppliers for premium space during promotions, but then fail to put the promotional displays out. Suppliers that tag displays will know if they are not being put out, and can thus demand refunds. Suppliers might also demand to know the price for which specific items were sold.

Change is never easy, but retailers and suppliers are already starting to work through some of these issues.

—Mark Roberti, Founder and Editor, RFID Journal

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