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Tracking Your Competitors

Why you should care where you are in the RFID adoption phase.
By Bill Hardgrave
Oct 15, 2012"When it comes to RFID, am I ahead of, behind or out of the game?" That's a question I am often asked by U.S. retailers, at conferences, by phone, in e-mail, on Facebook and via LinkedIn. Clearly, RFID adoption is on their minds, and with good reason.

To be competitive, retailers must have high inventory accuracy. And studies conducted by Auburn University and the University of Arkansas with many U.S. retailers have shown that RFID can improve inventory accuracy from an industry average of 60 percent or less to more than 95 percent. With 95 percent accuracy, many retail problems are solved or attenuated—out-of-stocks go down, safety stock or unnecessary stock declines, and sales and/or margins improve.

Getting back to the retailers' question, I tell them: If you have fully deployed RFID throughout your stores—tagging all items in all stores—you are ahead. If you have not started considering potential uses for RFID in your stores, you are behind. If you're anywhere else, you're—well—in between.

In the past few years, RFID adoption by U.S. retailers—particularly those in apparel (both specialty and department stores)—has picked up significantly. Of those using RFID, I estimate roughly 10 percent are on their way to full deployment (none are fully deployed). Another 30 percent are at the beginning of phased deployment. The other 60 percent are evaluating how RFID can help them solve business problems and/or using pilot projects to set their strategies for phased deployment.

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