According to the international survey entitled ‘RFID: How Far, How Fast: The State of RFID,’ small- to mid-sized retailers from Europe and across the globe are in various stages of exploring potential RFID investments. With many of the survey respondents in the early stages of exploring these investments, 70% of unannounced retailers with $5 billion and above in revenue are applying resources and will implement some form of RFID in the next 18 months. The study also showed that many Europeans are still defining timelines for deployment. The exception is distributors, who have indicated a more developed plan for potential implementation. Larger European firms are also more likely to have a timeline, where only $2 billion annual revenue firms have RFID plans. Though RFID has the clear potential to transform the retail supply chain through real-time product tracking and identification and elimination of human error, the industry is slow to embrace the new possibilities it offers.

The survey, conducted by Deloitte and Retail Systems Alert Group, also found that corporate culture and organisational structure has a sizable impact on active RFID-enabled innovation and future implementation of electronic product codes.

The full study and its results will be released Tuesday, March 15 during the Retail RFID Technology Symposium at the Global Retail Technology Forum at the Hotel Rey Juan Carlos I in Barcelona, Spain. The 6th annual Global Retail Technology Forum will be held March 15-17 at Hotel Rey Juan Carlos I in Barcelona, Spain.

“There are two sides to every story and the retail RFID story is no exception,” said Tom Friedman, president of Retail Systems Alert Group and founder of Retail Systems 2004 Conference & Exposition.”Despite the hype surrounding RFID as the technological answer to most retailing challenges, there is still much that needs to be addressed before this technology will be able to sustain its reputation.”

The survey provides the most recent snapshot of how 122 retailers, distributors, CPG companies, and apparel manufacturers view RFID adoption and innovation in the 2004-2005 timeframe, as well as provides initial insight into industry-wide investment and expectations for RFID in the next five years.

According to Mike PreFontaine, partner in the consumer business practice at Deloitte, when it comes to RFID: “Many are still eyeing up the opportunities and thinking about where this technology could strategically take their businesses. To some extent it will be a case of wait and see where the majors go with it first. In the next one to two years we expect to see major activity from the heavyweights and this will pave the way for the small and medium sized enterprises.”

Highlights of the survey include:

  • Three in four companies expect increased revenue from RFID within the first five years of implementation. Within Europe, revenue expectations are somewhat lower than elsewhere.
  • Calendar 2004 budgets for RFID seemed low, and were somewhat lower in Europe. Most companies allocated less than $500,000 for RFID directly. This is the case for European firms as well-except for Distributors, whose allocations average $2-4million. Most companies believe they allocated sufficient money for RFID in 2004.
  • Generally, few manufacturers expected to tag more than 50 SKUs in 2004, but no European manufacturers say they tagged any SKUs during this time period.
  • Although European manufacturers and retailers do share roughly similar awareness levels about technology standards, participants in other regions have somewhat different levels of standards awareness.
  • Most companies are not looking at SKU-level implementation until layer adoption issues, i.e., technology standards, cost, and distrust of IT departments, are resolved.