RFID in Retail: ABI Research Identifies a Frustrating Disconnection |
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The RFID Retail Market
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NEW YORK - March 16, 2005
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Contact: Christine Gallen
Contact PR
www.abiresearch.com
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RFID supply chain mandates launched by a few big retailers such as Wal-Mart and Target are now well documented and understood. But many other retailers are finding problems and frustration when they try to apply RFID in the same way.
Why? Because, says ABI Research analyst Sara Shah, "There's no cookie-cutter approach to RFID." In a new study, the research firm finds a disconnection: RFID manufacturers — many of them relatively new companies — don't understand retail; and many retailers don't understand how RFID can benefit them. This leaves them frustrated and slows down market adoption.
The new report, "The RFID Retail Market" examines how retailers are adopting RFID and the ways they will realize an ROI, as well as the possible business process changes it will entail.
"Wal-Mart's approach is creative," says Shah. "It's very worthwhile for them, which is why they're pushing forward on schedule. Other retailers follow, thinking that Wal-Mart's business case will apply just as well to them. But it may not work, because every business and every supply chain is different."
So, many retailers turn to their usual consulting companies — often one of the largest half-dozen. But big consultants are rarely early adopters of new technologies; they're often content to let ideas mature before getting involved. They are often less creative and imaginative.
Beyond supply chain management, nobody knows how many ways RFID can be used; known applications include security & "backdoor theft" prevention, contactless payments, advertising and promotions. Shah advises retailers to consider smaller consulting firms, where they'll find people who can find new ways to use RFID. Unfortunately, she adds, many of those small creative integrators lack the resources to execute system-wide rollouts for large clients.
For their part, RFID vendors need to educate themselves about retailing, and to develop solutions to retailers' problems, not just one-size-fits-all products.
Founded in 1990 and headquartered in New York, ABI Research maintains global operations that support annual research programs, quarterly intelligence services and market reports in wireless, automotive, semiconductors, broadband, and energy. Their market research products can be found on the Web at www.abiresearch.com, or by calling 516.624.2500.
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