68% of the food and grocery industry believe RFID will deliver better benefits for the industry

With both Wal-Mart and Tesco recently announcing that they will implement RFID with their top suppliers, RFID is set to make an ever-lasting change on supply chains of today.  In an exclusive new industry survey, food and grocery think tank IGD has asked how retailers are planning to use it and what it means for suppliers.

The survey found that overall the industry knows what RFID is and understands it.  45% say they have above average or excellent understanding and 42% average.  Only 2% have none at all. 

The majority (68%) believe RFID will deliver better benefits for the industry, including greater speed and efficiency in the stock operations, better tracking of products throughout the chain and enhanced forecasting.  However, only 39% of respondents have currently been approached by a trading partner to undertake RFID.

When respondents were asked what the most important factors are for RFID, cost came out on top.   In addition 53% believe that the cost of RFID currently outweighs the benefits, however 32% are as yet undecided.   This is creating the main barrier to wider adoption, as there seems to be lack of understanding of the return on investment and quantifying the true cost of implementing an RFID tag.

Despite the concern about cost, 65% of respondents think RFID will be widespread in between three and five years.  This is in recognition of time required for the technology costs to come down, for the standards for the tag to be fully adopted and for the technology to be fully tested in a live trading environment.

63% say it will affect the consumer with many mentioning better availability. But other potential benefits were also cited, for example 'RFID could trigger automated payment systems in-store eradicating the need for consumers queuing up at the checkout. This would vastly reduce the average time for shopping'.  Some early trials with DVDs at Tesco have made it easier for consumer to find the right product in the store.   35% of respondents plan to implement RFID to satisfy their customer requirements. However there are still some 20% that are undecided.
"The potential for RFID is tremendous but as we've learnt from experience, each technology has its teething problems. We now need to bridge the gap between pilot testing and mass application. I think we can guarantee it won't always go smoothly but with perseverance, RFID will start to transform the supply chain." Joanne Denney-Finch, Chief Executive, IGD

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