This article was originally published by RFID Update.
May 2, 2007—Research firm AMR Research has published an article entitled What We Have Learned From Three Years of Retail RFID Pilots that provides valuable observations based on the past three years of RFID adoption by retailers and retail suppliers. Below are some of the key points from this highly recommended read:
- The number of Wal-Mart stores using RFID has increased tenfold since the first stores were equipped in 2004, from 100 that year to 1,000 this year. (As confirmed by the company’s CIO Rollin Ford during his keynote at this week’s RFID Journal LIVE!, the company will equip another 400 by the end of this fiscal year.) Despite this progress, the number of Wal-Mart distribution centers with RFID is less than the retailer’s original plan.
- While Wal-Mart has released some highly publicized studies on the out-of-stock benefits realized from RFID, AMR Research believes that a “halo effect” has occurred around some of the study sample stores in Dallas, Texas. There is no one-size-fits-all ROI or benefit analysis to RFID deployment, cautions the company. “The ROI varies by category, by channel, and by the sophistication of current processes to work with retailers to do store merchandising. The analysis has to start with a true understanding of a company’s [own] current out-of-stock performance.”
- Furthermore, there is a scarcity of ROI analysis. Most retail manufacturers have inadequately measured the positive effects of RFID, instead fixating on the negative: cost and compliance requirements. “As a result,” reads the article, “after three years of testing, there is no answer for the industry on the benefits of RFID.”
- AMR’s own prediction that 2008 would see widespread RFID adoption was off. “This will not happen,” states the company flatly. The updated prediction is for more focused pilots and collaboration in the years ahead.
- In light of the discovery that promotions tracking is a key area of RFID benefit for retailers and their suppliers, new policies need to be established between these two camps that addresses accountability and action. “Today, there is no answer to what should be done if the supplier sees that the display product is not moved to the sales floor as promised. There is a need to develop programs and action plans that address this gap.” AMR is aware of only one retailer that is working at this.
Read the full article from AMR Research
