NEW YORK—RFID promises retailers more efficient inventory plans and streamlined supply chains in the near future, but for now it delivers only to the largest and most daring of them.
The technology remains the domain of the largest businesses, those with the means to invest in its deployment and wait for its return, said vendors and solution providers at the National Retail Federation Expo here this week. Small and midsize business clients, while impressed by the possibilities, remain daunted by the cost of implementation and unsure of its value.
"Some retailers think its time—those who have the capital anyway," said Rick Legue, director of sales at Tekserve POS, LLC, an Arlington Heights, Ill.-based provider of hardware, software and services for retailers. "The rest are left looking at the price. There is a risk in implementation that it wont pay off, or wont pay off in time. For most of us its still time to sit back, embrace it where we can and wait to see where it takes us."
But momentum is building behind radio-frequency identification. More and more companies are launching pilot programs, and the investment in those programs has gone from an average of $50,000 to $500,000, according to data from Cisco Systems Inc.
For most companies the question of money is enough to discourage implementation. RFID tags are nearly 20 cents apiece, and a full integration of readers, encoders, middleware, application software and revised business processes would average about $9 million, according to Forrester Research Inc.