Report: Follow the Leader Brings Trouble in Retail RFID

An ABI Research analyst says retailers are underestimating the level of customization RFID will need. Their strategy of following Wal-Mart's approach, ABI says, is not a good idea.

As the young RFID retail market moves through its experimental stages to eventual full deployment, many retailers "are finding problems and frustrations" because they are trying to emulate cutting-edge market leader Wal-Mart.

"There is no cookie-cutter approach to RFID," said ABI research analyst and report author Sara Shah. "RFID manufacturers—many of them relatively new companies—dont understand retail. And many retailers dont understand how RFID can benefit them."

Shah offered two retailers, Albertsons and Target, as examples. They followed Wal-Marts RFID strategy closely.

On the one hand, Albertsons and Targets "mandate was very similar to Wal-Marts," and "they do have similar supply chains and a lot of the same suppliers." But there are clearly differences and, Shah argues, those differences have not been given the appropriate weight.

"It doesnt necessarily mean that they had to approach RFID in the same way [as Wal-Mart], even though it may very well work for them," Shah said. "We need companies to take a step back and figure out how they do things internally. Today, they are not thinking it through."

This all sits atop the many different kinds of problems retailers are discovering in RFID trials, such as readability errors and backend operation integration. "There are a million [RFID] problems, and every company had a different set of problems."

/zimages/4/28571.gifIs there a lack of analysis capabilities for RFID data? To read more, click here.

What retailers typically have done is hire large consulting firms. But they quickly discover that those integrators tend to be conservative, have little experience with new technology such as RFID and "are often content to let ideas mature before getting involved," Shah said. "They are often less creative and imaginative."

/zimages/4/28571.gifRead the full story on CIO Insight: Report: Follow the Leader Brings Trouble in Retail RFID