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Don't Let Misperceptions of RFID Become Reality

A recent article by the Wall Street Journal portrays Wal-Mart's RFID efforts as failing. That's not the case, of course, but there is a danger that misperception could become reality.
By Mark Roberti
I guess the quoted person meant "black hole," but you get the idea. Either way, the idea is wrong. If someone is spending $200,000 to slap some tags onto cases and expects to see a huge benefit, then that person is delusional. That would be like spending $200,000 on routers and Ethernet cable in 1997, and saying: "This Internet thing is a black hole."

We've already written about the benefits Procter & Gamble is getting today from tracking promotional items (see P & G Finds RFID 'Sweet Spot'). The next issue of our magazine will feature a case study on how Kimberly-Clark is achieving a return on investment from tagging promotions. These companies have each spent a lot more than $200,000 on RFID, and they will get many more benefits in the future as the technology matures and becomes less expensive.

These two CPG companies have been among the few to talk openly about the benefits they are achieving, but I talk to more and more Wal-Mart suppliers who say they see real opportunities today, whether in tracking promotions or reducing chargebacks.

The Wall Street Journal claims many companies are complying with the tagging mandate just to please an important customer. That may be true, but some are also in it because they realize RFID offers transformational benefits in the long term, and that these can't be realized by sitting on the sidelines today. The challenge is that to achieve the massive benefits possible, companies have to invest significant sums in RFID infrastructure, IT systems and business process change, and they have to make sure others in their industry go along with it.

Some companies—including Wal-Mart and its suppliers—are deploying RFID intelligently. They are not rolling out the technology in one massive wave, then waiting for the benefits to accrue. They are looking at how and where it can deliver value today, getting early wins and finding new ways to leverage the technology. This might be slower than some journalists expected, but it makes good sense from a business point of view.

Let's try to focus on reality and not allow ourselves to get caught up in simplistic views of RFID adoption. Otherwise, there is a real danger that companies will assume there really are no advantages and miss out on the benefits RFID is delivering today, and will deliver tomorrow.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below.

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