|Home||Internet of Things||Aerospace||Apparel||Energy||Defense||Health Care||Logistics||Manufacturing||Retail|
The Emerging Marketplace for RFID Data Analytics, or Finding a Needle in a Haystack
Solution vendors should plan for changes in the economics of reselling hardware. Those who find ways to incorporate data analysis into their offerings will enjoy higher margins and a competitive advantage.
Bill Colleran, CEO of UHF RFID technology supplier Impinj Inc., agrees. "Omnichannel demands fixed infrastructure," he says. "Handhelds have provided a lower hardware investment at the expense of accuracy and time granularity." Up against Amazon, he adds, "retailers can't afford to overpromise," but they also cannot afford to risk overstocks by inflating inventory buffers. "The benefits of [fixed] hardware involve going from periodic to real-time inventory, 24/7. Real-time inventory reduces the necessary inventory buffer size."
Historically, a fixed infrastructure required larger up-front costs—which, according to Shulman, "were holding the market back." But the price/performance ratio has been improving steadily since Walmart's case and pallet mandate in the mid-2000s. In 2006, list prices were about $2,100 for general-purpose four-port readers, and more than $200 for antennas, leading to (uninstalled) hardware costs that exceeded $750 per antenna. A year ago, retail solution provider Senitron Inc. deployed about 15 Impinj readers and 150 antennas to cover the 8,000-square-foot American Apparel store in Melrose, Calif. (see American Apparel Deploys Real-Time, Storewide RFID Inventory-Management Solution). At current list prices, such a deployment would add up to around $300 per antenna—less than half of the 2006 cost.
Lower prices are good, says John Armstrong, Senitron's CTO, but his company wants to minimize the up-front investment. "Some retailers want to own, some don't," Armstrong says, "For those that don't, we provide a low, up-front cost by building the cost of the hardware into the service fee." Customers just pay for the data.
Colleran calls this RFID-as-a-service (RaaS) and predicts that it will become much more common. "It's like our photocopy service [at Impinj]," he states. "We're not interested in the copy machine. We're interested in being able to make copies when we want to. [RFID] users aren't interested in newfangled hardware gear. They want the data."
RaaS will accelerate adoption. On an operational expenditure, rather than capital expenditure, basis RaaS is easier to stomach for most users. Return on investment is easier to predict because RaaS "takes the risk out of it for the retailers," says Zensar's Shulman. "If the monthly cost for the service is neutral, why wouldn't I do this?" Users will exert greater control over what they're paying for. If they want to upgrade from the basic service, it will increase their monthly expense, but they won't have to invest in new hardware or software.
The basic service for retailers is real-time inventory visibility, for which there is an established ROI. But for a fee, Armstrong says, Senitron can provide additional value that has the power to drive operational changes, such as telling a retailer "which items get taken to the dressing room more often, or which get picked up." There is value in knowing if a style is never tried on, or keeps being tried on but is never purchased. He says that there is a lot of opportunity for a retailer with vision.
Login and post your comment!
Not a member?
Signup for an account now to access all of the features of RFIDJournal.com!
SEND IT YOUR WAY
RFID JOURNAL EVENTS
ASK THE EXPERTS
Simply enter a question for our experts.
TAKE THE POLL
|RFID Journal LIVE!||RFID in Health Care||LIVE! LatAm||LIVE! Brasil||LIVE! Europe||RFID Connect||Virtual Events||RFID Journal Awards||Webinars||Presentations|