Warning to Retailers: Ignore RFID at Your Peril

By Mark Roberti

When the technology reaches a tipping point, those who haven't done their homework will struggle.

Many years ago, at the dawn of the internet era—which, contrary to my children's beliefs, was not right after the Paleozoic era—I covered brick-and-mortar companies that did not take the internet seriously and were caught flatfooted when suddenly everyone was going online. A friend of mine worked at a Fortune 500 company that was unprepared and spent $50 million trying to catch up. Most of the money was wasted, and it took several years before the firm developed a coherent internet strategy.

One of my goals has always been to help companies make smart decisions about radio frequency identification. During the early years of hype, I tried to bring some rational analysis to what was happening. No, RFID was not going to kill the bar code or transform the global supply chain in a year or two, nor was it an evolutionary dead end (see RFID Is an Evolutionary Dead End).

Now that RFID is gathering momentum, particularly in retail apparel, I feel it's important to warn retailers: The tipping point is coming. We don't know when, but if you are not exploring the potential now, you are going to waste a lot of money later trying to catch up.

Macy's began investigating RFID in 2007. That's nine years ago. It began deploying the technology in stores in 2012. Marks & Spencer began even earlier, in 2003. These retailers spent a long time investigating the technology's potential, learning how and where it should be deployed. True, the technology is much more mature now, and it won't take others as long to learn what these leaders learned.

But when things take off, and you need to deploy an RFID system chain-wide quickly to keep up with competitors (and keep your stock price up), it will be awfully difficult to figure out everything you need to know to deploy a solution in the way that best meets your company's needs and goals. You'll also have issues finding a high-quality systems integrator, because such companies will already be working with more clients than they can handle. That means probably working with integrators learning how to deploy a solution at your expense.

I think the most challenging thing will be managing the change RFID requires. Macy's, Marks & Spencer and others have been phasing in RFID over time, which means store employees don't have to suddenly learn a lot of different tasks. They are brought along in a measured way. Trying to change a lot of things all at once is likely to create some executional issues that could affect profits across multiple reporting periods.

I would like to see companies use RFID in a way that cuts costs, boosts sales, improves worker retention and so on. The last thing I want is for companies to be caught unprepared and waste a ton of money trying to deploy a solution in haste. I suggest retailers begin learning now how to use RFID. One way is to attend our RFID in Retail and Apparel conference in New York City on Oct. 6. Then conduct a proof-of-concept to determine how RFID works in your environment and addresses your business issues (see What Retailers Should Test for in a Proof-of-Concept). Trust me, you will be glad you did.

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.