In the early, Walmart days of RFID in retail around 2004, no small number of pundits kept predicting the US RFID market was on the verge of reaching one of several various tipping points, where adoption gained real traction.
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| On training store workers, Accenture says that RFID “requires changes to store operations and this effort must not be underestimated. |
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It never happened – though perhaps it finally has now.
A new bi-annual study by consulting firm Accentura says use of RFID in North American retail “is booming,” with 93% of store chains saying they are using using RFID, though it was an almost equal the 92% in the last study in 2018. This year’s report is based on 2020 survey data.
The big change is really in the nature of RFID deployments in retail. As shown in the graphic below, in 2018, 46% of retailers were piloting RFID, versus 28% in full adoption. In 2020, those just piloting falls to 8%, while the share with full adoption rose to 47%.
Those numbers for 2020 frankly seem high to SCDigest, but maybe not.
eCommerce is fueling much of the adoption, with high inventory accuracy levels needed to support processes like store fulfillment and buy on-line, pick-up in store (BOPIS).
The benefits retailers report are modest, according to the report. Retailers that have fully adopted RFID are reporting more than 10% ROI compared to 9.2% in 2018. SCDigest notes that these numbers may not apply any benefits from the improved customer experience from ensuring inventory accuracy is high.
Relatedly, Accenture says the research also found that retailers that have engaged with suppliers on source tagging are seeing a higher ROI (16% higher) than those that have not.
“Full adopters of RFID have all moved to source tagging, and overall, 45% of retailers say they are engaging with their suppliers on source tagging,” Accenture says, adding that “Due to the magnitude of moving to full implementation, source tagging is a must to help rationalize labor for this task.”
Source: Accenture
Unlocking the Full Benefits of RFID
Despite the mostly good news on the adoption front, the report notes many retailers still don’t make it past the pilot stage. Such companies report that their greatest struggles and roadblocks are quantifying the value of RFID, identifying the right suppliers and partners, and having the ability to train employees.
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To overcome those challenges and drive greater benefits from RFID adoption, retailers should consider the following:
On calcaulting RFID value, there is plenty of data to quantify the potential returns of rapid piloting and testing, Accenture says.
On identifying the right suppliers and partners, Accenture recommends retailers consider partnering with the broader ecosystem of technology partners, suppliers and advisors that can support rapid advancement – perhaps a bit self-servingly, but that doesn’t mean it is wrong.
Finally, on training store workers, Accenture says that RFID “requires changes to store operations and this effort must not be underestimated. Having a solid change strategy is critical to gain buy-in and support to implementing RFID.”
In conclusion, the report says “Opportunities remain to continue to unlock value from RFID….RFID has proven its worth.”
The full report is available here: A new era for RFID in retail
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