The future may hold far fewer and radically redesigned stores, analysts say.
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Much to be worked out
To forward RFID data to the EPC Network on the Internet, for universal access by authorized clients at trading partners as well within an enterprise, requires additional software. IBM recently introduced the Global Data Synchronization for Websphere Product Center, which starts at about $250,000 and includes a Websphere application server, IBM’s DB2 database, and connectivity to the Internet through one or more industry data pools such as Transora.
Companies can also connect through a hosted application to the EPC Network. Tekmark Global Solutions, for instance, provides a hosted system for connecting a company’s product data to an Internet-based registry, with prices ranging from a $100 startup fee plus $200 per month for small companies to a $500 startup fee plus $3,000 per month for large companies, says Dan Evatt, vice president of marketing and sales.
The promise of RFID, however, still leaves much to be worked out among retailers as well as suppliers. In addition to testing the reliability of RFID tags and readers to transfer useful information, retailers must make sure they have a number of supportive processes in place. “RFID can provide only so much control in getting products onto store shelves,” Enslow says. “You still have to have a truck available to ship products from distribution centers, and you have to have personnel on hand to move goods from a store’s back room to the merchandising shelves.”
Nonetheless, Best Buy’s Freeman says he has reason to be bullish on RFID, even with its challenges. One of the challenges facing effective deployment of RFID systems is getting complete scans of merchandise as it passes by readers. Despite the automation and line of sight advantages RFID offers, efficient scans can be impacted by factors like the amount of metal or liquid in containers.
Time to go
As readers become more capable as well as drop to under $1,000 per unit, companies will deploy more of them to make RFID data collection more reliable. The price of readers, currently at about $3,000 each, can be expected to halve about every 18 months, says Cliff Horwitz, chairman and CEO of reader manufacturer SamSys Technologies Inc. “Within three years or so, it will be down to less than $1,000,” he says.
Freeman says that RFID is already at the point where it’s worth pushing it forward, with an eye on realizing efficiency gains for both retailers and suppliers over the course of the next few years. “RFID is ready,” he says. “It’s time to go with this.”