Oct 11, 2015Last week, I explained how and why the adoption of radio frequency identification will accelerate (see How RFID Adoption Will Accelerate). You might say, "So what? We'll adjust our strategy when it happens." That might work, but I think there are perils for companies that don't anticipate the acceleration in RFID adoption. I'll explain the dangers for end-user companies first and then for RFID solution providers.
If you are a retailer that is not currently experimenting with RFID, you might figure you can look at the technology in a few years. But by that time, we might have reached the tipping point. All retailers will be deploying, and you will be in a frenzy to figure out how the technology works best in your environment and with your processes. You won't have time to test different scenarios, make mistakes and correct them. You will likely wind up deploying something that is less than optimal.
You might also wind up working with an RFID provider that was founded only in the past six months, because the experienced companies are already engaged. This could lead to expensive deployment problems. I saw this happen when I was an IT journalist covering the adoption of Internet technologies. In 1999, CEOs of big companies were saying the Internet was insignificant to business. Two years later, those same CEOs were throwing money at Internet projects, a lot of which ended up being wasted.
Another problem for retailers that wait too long is that when they are deploying a basic RFID system for managing inventory and improving replenishment, the retailers that have already deployed such systems will be building on a strong foundation to improve the in-store experience and perhaps innovating in ways that we haven't yet thought about.
For RFID solution providers, there is a danger in investing too much before the market takes off. Many firms did this in the early days and wound up without the revenue to support their investments, and they went under as a result. But there is also a danger of being behind the adoption wave. If customers are asking for product that you can't deliver, you will lose those customers to your competitors.
Failure to build a brand is also a danger. When the market takes off, end users will gravitate to the RFID brands they know. As those brands gain new customers, they will have the resources to promote themselves more, while unknown businesses will continue to struggle (this is how "gorillas" are created, to use Geoffrey Moore's term for the dominant technology providers).
Navigating this changing landscape will not be easy. Companies must weigh the dangers of moving too quickly against the risks of not moving fast enough. Those that do it successfully will be the ones that do best once RFID becomes ubiquitous.
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog, the Editor's Note archive or RFID Connect.
