Jun 20, 2016When I meet with retailers that haven't adopted RFID to improve inventory accuracy, the first question I ask is: "Why are you not using RFID?" Some retailers are prepared with a ready excuse: "RFID is just too difficult." It is unclear whether they are hearing this from outside their organizations or it has become an internal way to justify not using RFID. I suspect it is a bit of both. Either way, the "just too difficult" excuse is just lame.
Adopting an RFID inventory-management solution is not rocket science. There are well-established technology standards and best practices for deploying RFID in the retail sector. True, the technology is not yet plug-and-play. I always advise retailers that it's essential to conduct a proof-of-concept (POC) and then a pilot to ensure a successful deployment.
Depending on the retail environment, there may be issues to overcome, such as antenna placement or power settings that require tweaking to achieve optimal read rates. But there are many RFID providers and systems integrators that have experience deploying RFID solutions for retailers and know how to address these challenges effectively.
Retailers that buy into the scary stories from those outside their organizations are making business decisions based on misinformation. The retailers that claim they had "issues" with RFID likely made mistakes during their POCs or pilots (see The Truth About High Inventory Accuracy).
As more major retailers announce storewide RFID deployments, CEOs have begun to ask their internal leadership why their companies aren't using RFID. The "too difficult" answer they receive often stems from two sources. One is a reluctance to acknowledge to the boss that there are problems that need fixing. But it's getting harder to hide behind that excuse. Studies show the industry average for in-store inventory accuracy among U.S. retailers is roughly 60 percent. And stores that have deployed RFID to address inventory inaccuracy have reduced out-of-stocks and improved sales.
The other source is an aversion to change. When retailers get together, they often discuss how RFID "shines a light" on store processes. Underlying that discussion is the awareness that those in charge will have to make tough decisions to improve processes and then execute them to meet expectations. One retailer, for example, learned employees weren't following prescribed store processes. When products were delivered to the store, they were supposed to transfer them directly from the truck to the sales floor—only items that didn't fit on the sales floor were to be taken to the back room. But the employees were storing all the merchandise in the back room, which was having a negative impact on sales.
Shining a light on a problem is a good thing, but tackling the problem can be hard. Creating change often impacts the work of hundreds or thousands of employees, and change always brings resistance. But the retail industry is changing, and retailers must change with it. If they continue to make excuses for not adopting RFID, their businesses will suffer.
Bill Hardgrave is dean of Auburn University's Harbert College of Business and founder of the RFID Lab. He will address other RFID adoption and business case issues in this column. Send your questions to hardgrave@auburn.edu. Follow him on twitter at @bhardgrave.
