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Missing: Specialty Apparel Retailers

With the most to gain from item-level tagging, why aren’t these retailers giving RFID the attention it deserves?
By Marshall Kay
Lack of investor awareness. The investor community is just beginning to recognize that RFID is a game changer, on par with the bar code and the Internet. The “sell side” analysts who monitor the specialty retail sector, and the large investors they advise, are only now learning about the impact RFID will have as a driver of financial performance. As they become more aware, they are likely to press specialty retailers to develop and communicate their plans for using RFID in their stores. Had this process started sooner, RFID would, no doubt, be on the radar screens of more specialty retail CEOs. The investment community needs to elevate RFID on the retail agenda because internal stakeholders are unlikely to elevate and drive RFID on their own.

Specialty retailers that drag their feet on RFID will, each year, leave tens of millions of dollars of operating income sitting on the table. Imagine if the retail community had elected to ignore the Internet for over 10 years, only beginning to use it in 2005. We run precisely that risk with item-level RFID, where readiness isn’t automatically triggering specialty retail adoption. That’s why it’s imperative that specialty retailers begin giving RFID the attention it deserves.

How can specialty retailers get in the game? A small first step would be to join one of the industry working groups—either the Apparel/Footwear RFID/EPC committee run jointly by the Voluntary Interindustry Commerce Solutions Association (VICS) and the American Apparel & Footwear Association (AAFA), or EPCglobal’s Business Action Group for Apparel, Fashion & Footwear. The next step would be to allocate funds and personnel for in-store RFID pilots in 2007. Consulting firms that understand RFID and have extensive store operations experience can play a valuable role in planning and executing these pilots, and mapping out a roadmap for future deployment.

Finally, we strongly encourage specialty retailers to register for the RFID Journal—AAFA Apparel & Footwear Summit, being held in New York City on August 15-16, and similar future events. The VICS/AAFA and EPCglobal working groups will be meeting in the area that week too, making it harder than ever to justify non-attendance.

Marshall Kay (312-286-4944) is an RFID specialist and retail strategist at global management consulting firm Kurt Salmon Associates. He has helped retailers in North America, Europe and Asia create value using RFID. Kurt Salmon Associates focuses exclusively on the retail, consumer products and health-care industries.

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