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The competitive advantage and bottom-line business benefits of RFID are significant to both retailers and suppliers, despite the typical risks associated with adopting any early-stage technology. Early estimates indicate that a comprehensive RFID solution can generate a 2 to 3 per cent increase in revenue, reduce days in inventory by 1 to 2 per cent, and reduce operating expenses by 2 to 5 per cent. Companies that achieve this ROI early will have significant financial advantages over the competition, mitigating the risks and making a strong business case for RFID, especially for companies that rely on their supply chains.

Girish Ramachandra of Infosys says, “The applications for this technology are numerous owing to its key capabilities – automatic data capture and electronic identity. RFID has been applied to several applications in multiple industry segments like transportation, logistics, automotive, aerospace, consumer products and healthcare segments. Today, we see RFID used for vehicle and personnel access control, automotive anti-theft systems, sports timing, wireless commerce, ticketing etc. Recent innovations in tag assembly and efforts of EPCGlobal Inc to establish a family of standards for uniform RFID usage have contributed significantly to accelerated adoption of this technology in commercial applications. Spearheaded by retailer mandates, RFID adoption is expected to be ubiquitous in the next few years.”

RFID Vs Bar Code

On the question of differentiating between RFID & Bar Code, Jangoo Dalal, senior vice-president-Enterprise, Cisco says:

1. RFID is similar in concept to bar coding though RFID is a flexible technology that is convenient, easy to use and well suited for automatic operation.

2. RFID does not require line of sight to operate, can function under a variety of environment conditions and provide a high level of data integrity. The Bar Code must be presented to the scanner in an orientation and distance that is very limited. Individual reading requires that each box on a pallet be opened and the item pulled for presentation to the scanner.

3. RFID tags are produced with a unique identity code from the manufacturer, which is embedded digitally on the microchip, and may not be changed and therefore are extremely resistant to counterfeiting and provide a high level of security. Bar Codes, on the other hand, may easily be duplicated and attached to products and are, therefore, easily counterfeited.

4. In RFID, updates may be made within the blink of an eye and automatically without human intervention. Once a Bar Code is printed, it remains frozen. The Code and the process of attaching the BC is not supportive of real time updates.

5. In RFID, Regulations and Spectrum allocation are the main bottlenecks.

Technology as Store Differentiator

Technology – and the pace and lifestyle it creates – plays an increasingly critical role in the retailer/customer relationship. “Nowadays, the consumer is changing faster than retailers can change their systems to keep up,” says Dan Hopping at IBM. “If a retailer has a brilliant idea to handle the customer, by the time they get it finished, the customer's on to something else. The real driver is the consumer. Whatever the question is, the answer is the consumer," he concludes

For retailers, technology can serve as a significant differentiator over a competitor or another retail channel. Stores that use technology effectively can attract more customers, compensating for declining margins in other categories. But while retailers tend to focus solely on what is happening with same-channel competitors, keeping an eye on other channels offers an important glimpse into future consumer demands and expectations.

When one channel adds a technology that saves the consumer time or offers an improved in-store experience, the bar is raised for all retailers. Consumers begin to expect the same technology in other types of stores. Technologies tend to become smaller, faster and cheaper as they gain acceptance and become more widespread. As Hopping at IBM Corp., points out, “For the first time, the cost of technology, especially PCs, is so low that a mom-and-pop store can now do things that only a big box could have done five years ago.”

Using technology to offer customers more choices quicker could work to the advantage of retailers. Expanded product offerings could mean larger stores, which in turn could mean increased customer loyalty and better profit margins.

Retail technology innovation and adoption rates are accelerating, as retailers implement new solutions to differentiate their businesses. For retailers, one method to gain competitive edge is through on-demand operations. For example, IBM's On-demand operating environments for retail feature dynamic sense-and-respond interactions between customers, products, employees and retail technologies.

Industry leaders are today using innovative retail technologies designed to support everything from real-time inventory and resource management to dynamic merchandising, interactive self-service and strategic up-selling and cross-selling. Pervasive devices streamline employee tasks. Smart shelves leverage RFID-enabled solutions to track inventory and deliver unique pricing. Integrated kiosks augment delivery of products and services such as prepaid phone cards and photo processing.

Networked Digital Signage

Digital Signage is another popular technology being deployed at retail stores. It gives retailers the ability to play digital ads, video files across multiple retail outlets displayed via Plasma/LCD screens. Any promotional campaign would involve printing realms of paper and distributing the same via courier to all retail outlets. Consumers would be witness to paper ads hanging from ceilings or wall corners.

But replacing the paper ads with elegant, sleek and stylish Plasma screens matched with high resolution digital audio/ video content brings about a reveling experience to the consumer. Such Digital Signage solutions can be controlled by a Central I.T. Administrator by pushing relevant content to individual Screen displays across the Retail chain and customise the playout of advertisements and promotional material that should be displayed.

Look to The Future

Studies indicate that the Indian retail industry is likely to grow at a rate of 40 per cent per annum which shows that the entire organised share of India's retail sector is ripe for the adoption of emerging technologies. “Organised retailers are rapidly increasing spending on technology to achieve competitive differentiation and adoption of technologies is occurring at various levels across the entire Indian retail landscape – we see a huge opportunity for Cisco,” says Jangoo Dalal.

George Zacharias at Sify is also confident that “The use of IT will help the retail industry to grow at a faster rate and boost employment. In fact, in the due course of time if the information technology is used strategically, it will help in making India a super power in retail.”

Dealing with the lightning-speed advance of technology presents a chicken-and-the-egg-style conundrum for convenience-store retailers. “Because retail is changing so fast, you have to change your business model,” notes Hopping. “You can't change your business model until you integrate your data. You can't integrate your data until you have your infrastructure built.”

“You have the opportunity now to change your business more than you've ever had in the past, but what do you change it to? If the model I have isn't it, how should I tweak it so I stay in business?”

Again, as retail technology advances, standards are playing an increasingly important role. The trouble is, there are standards for practically everything, so it can be tricky to tell what is critical and what is not. The answer, says Hopping, is on the other side of the counter – the customer. Have faith on the customer and strive to give unto him something that's really unique.

“Swim upstream. Go the other way. Ignore the conventional wisdom. If everybody is doing it one way, there's a good chance you can find your niche by going exactly in the opposite direction.”

Sam Walton (1918-1992)