Capgemini: Why Century-Old Rfid Technology Can Disrupt Modern Retail

SUPPLY CHAINS Amazon’s recent announcement of additional investments in Artificial Intelligence (AI) and drones in the UK should be a wake-up call for all retailers, from supermarkets to apparel stores. UK retailers can learn a lot from how their US counterparts are responding to Amazon’s innovations and the unexpected technology at the heart of their response.

Amazon’s investment, paired with its physical store experiment, Go, shows that the technology company has the full package when it comes to offering a good customer experience and service, all accessed with the ultimate in convenience. It’s no secret that consumers have been growing increasingly frustrated with a high street shopping experience that offers little of the convenience of online stores. We surveyed both retailers and shoppers earlier this year and found that 40 percent of consumers see shopping in-store as a chore and a third would rather stay at home to wash the dishes (Capgemini: January 2017).

While more than half (54 percent) of the retailers we surveyed admitted that they have been slow to digitize their physical stores. Consumers’ in-store frustrations are rooted in the lack of parity between online and in-store features. For example, the majority of retailers do not offer inventory checks to consumers ahead of them visiting the store, however 75 percent of consumers told us that they want this service, indicating its potential to drive an uplift in sales.

In the US, department stores including Nordstrom, JC Penney, Sears and Macy’s are now are using their stores as fulfilment centres. No longer do customers have to wait-in all day for the courier. A lot of 1 retailers are moving into offering collection options (either third party or in-store), with leaders in the industry also finding ways to fulfil click and collection orders in-store to save on logistics costs. This minimizing of costs is vital as delivery services are often given to consumers for free and in the tradition model erode retailers’ margins.

Overall this makes shopping convenient and online and in-store more integrated, and cost-efficient for the brand. There’s also a business benefit as retailers avoid having to invest in new, capital-intensive distribution centres. Nordstrom delayed its plans to open a West Coast fulfilment centre until 2020, citing high costs and return on investment apprehension. Instead, it is equipping stores to be ‘fulfilment-capable’. The key to this model is enabling inventory visibility for each store so that online orders can be confirmed with confidence at an individual store level.

This also enables them to integrate forecasting for online and instore demand to drive much more accurate store replenishments. Retailers should also not underestimate the power of the collection ‘experience’. A little investment can go a long way in delighting customers and enhancing reputation. But aside from this, what is interesting to me is that industry conversations are dominated by cutting edge technologies such as AI, drones and augmented reality.

It seems that many are looking to futurist technologies to solve the problem of engaging with the consumer. Yet the technological key to unlocking the puzzle to improved inventory visibility was actually invented nearly a century ago. Radio-frequency identification (RFID) has been in use since World War Two to track goods, make contactless payments, time sporting events and transport airport baggage.

Seventeen years ago it was heralded as the next big thing in retail technology but failed to break-through, largely due to the implementation and ongoing costs. At a basic level, RFID systems consist of three components: an RFID tag or smart label, an RFID reader, and an antenna. RFID tags contain an integrated circuit with its own unique identity, which it transmits to the RFID reader.

Translating this into a retail store, an RFID smart label can be used to track not only when a product enters a store via readers in the stockroom but also when it leaves a store via readers at shopper entrances. Some retailers have also put a network of RFID readers into the roof space of the sales floors allowing them to read all of the stock on display, providing hugely more accurate inventory visibility. Some retailers use this feature to detect product that is on the wrong display rack, helping to maintain better product availability for customers.

If RFID readers are connected to a payment system, then the store can use smart bags linked to unique customer accounts to enable queue less stores, which is something Amazon demonstrated with its Go store concept. Decathlon also uses this technology but in this case at the checkout. Everything passes through the gateway as packed into a bag with no scanning required.

A RFID tag that cost $1 in 2000 is 2 now 10 cents. Macy’s has run trials with clothing vendor Herman Kay where the manufacturer put tags on every item it produced for the retailer. It now plans to use RFID to track every item across all of its stores and fulfilment centres by the end of 2018.

Wal-Mart also announced it was making it a requirement for its vendors to place RFID tags on all shipments to improve supply chain management. With RFID tags now costing a fraction of what they cost 15 years ago, we are seeing them increasingly being built into products (particularly apparel) at the manufacturing stage. The tags then improve tracking and accuracy right through the supply chain and into the store.

Retailers need to evolve to a true Omni-channel offering (from multi-channel where many are still stuck) where the consumer can truly cross channels seamlessly. The role of the store is not dead but retailers need to do more to press the advantage of bricks and mortar over pure-plays such as Amazon, using technologies like RFID to drive inventory visibility, thereby improving the shopping experience. SOURCE:

QUESTION 1 (10 MARKS) With reference to relevant theory and the information in the above-mentioned case study, provide an analysis of the factors that the managers of modern retail companies had to take into consideration upon making a decision on the adoption of supply chain IT.

QUESTION 2 (10 MARKS) Radio frequency identification (RFID) is known as one of the three new technology solutions for supply chain management according to Mondragon, Lyons, Michaelides and Kehoe (2006). Critically discuss the concept of RFID and explain in your own understanding why old RFID technology can disrupt modern retail supply chains. [10 marks]

Assignment Writing Pro
Order NOW to get 15% Discount!
Pages (550 words)
Approximate price: -

Why Choose Us

Premium Quality Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional Assignment Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Timely Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

Customer Support 24/7

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

We'll send you the first draft for approval by at
Total price:

How it works?

Fill in the order form and provide all details of your assignment:

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Assignment Writing Help Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.


Essay Writing Services

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.


Admission and Business Papers

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.


Editing and Proofreading

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.


Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.