RFID Update
Supermarket News reported in an early August post that CPG companies “are still making minimum investments in RFID technology to satisfy their retail business partners demands” and are “becoming increasingly skeptical about the benefits this technology offers.”
Another article recently pegged the cost of implementing the retail outfitting of a pharmacy with RFID at $80,000+. This of course, does not include the cost of RFID tagging on the products themselves.
These reports bring into view the issues which have stymied many an industry initiative including in-store execution, solving real out-of-stock issues, data synchronization and of course RFID. Those issues include:
- The benefits-to-coverage conundrum. Both trading parties must gain from these investments. The benefits to the retailer or the CPG manufacturer only come when either all the vendors or all the retailers have implemented systems in a consistent manner.
- The systems depend on other “problem elements” to succeed. In the case of RFID, both sides need accurate, up-to-date product information and that simply doesn’t exist today (see point above).
- Investments are large and if priorities do not put this at the top of the investment list….see the first point.
Technology never stands still, and alternate technologies to RFID …and frankly to these other dilemas mentioned above are emerging. Alternatives that overcome these traditional hurdles, are more cost effective and can provide benefits to both trading partners immediately.