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Introduction
Developments in the retail industry are primarily the outcomes of recent technologies. Technological developments brought about various mechanisms that contribute to the consequently development of the retail industry. Due to the rapid development and evolution of technology, industry analysts believe that this trend will continue in the coming years. Retailers can adopt or implement various technologies today including Information Technology and (Radio-frequency Identification) RFID technologies. The succeeding discussion is an exploration of technological trends that apply to the retail industry, particularly in IT. The discussion also explores the benefits or advantages and disadvantages or contributions of these technologies to the retail industry.
Trends in the Retail Industry
One of the challenges in the retail industry is competition. Due to competitive forces in the market, retail companies need to look for a competitive edge. Often, companies gain competitive advantage through innovation. Consequently, technology enables organisations to achieve innovativeness. Information Technology (IT) is one tool or instrument that companies can take advantage of to gain competitive advantage and improve services and operations in the retail environment. RFID technologies also offer support for the retail industry, particularly in supply chain management. Sarac, Absi, and Dauzere-Peres (2010, p. 77) conducted a review of existing literature that explores the impact of RFID technologies on supply chain management, particularly in retail. Sarac, Absi, and Dauzere-Peres’ research study is relevant to the study because it highlights the positive outcomes or impact of RFID in the retail environment. Existing literature suggests that RFID technologies benefit the retail industry because they contribute to the “reduction of inventory losses, increase of the efficiency and speed of processes and improvement of information accuracy” (Sarac, Absi, & Dauzere-Peres 2010, p. 77). Hence, RFID significantly improves operations and practices in the retail environment.
RFID’s benefits and advantages include inventory management and the elimination of inaccuracies in the flow of inventory. Through this technology, retail managers can track inventory in real time, make necessary arrangements to facilitate the steady influx of goods and services, and consequently ensure that the store would be able to meet consumer demand. Inventory management also benefits retailers as it would help them control stocks and avoid surplus and added expenditure. Ganesan et al. (2009, p. 84) conducted a research to determine trends in the retail industry in relation to technology. Ganesan et al.’s (2009, p. 84) research study is relevant to the research because it introduces trends in the retail industry, particularly in supply chain management operations. Their research study looks into different technologies that would improve operations including RFID. Retailers’ objectives is to look for opportunities to gain competitive advantage while improving company operations.
One of the advantages of adopting RFID is that retailers can utilize this technology to develop other services. Aside from tracking or monitoring inventory, retailers can also take advantage of the RFID technology to develop other mechanisms that would improve operations in the retail environment. For one, retailers can use RFID to improve customer service. Retailers can use RFID to guide customers, particularly by sharing information that they can use to shop and to make decisions. Retailers can also use RFID to improve check-out services. Customers need not stand in lines at the check-out counter because RFID technologies can track their purchases so they can pay for their purchases immediately. RFID can therefore improve services for consumers. Hence, RFID can be useful to retailers because it targets not only inventory management but also other retail operations and services as well (Ganesan 2009, p. 84).
Woolworths in Australia has been studying RFID for a while after learning about the benefits and advantages of this technology in supply chain management. Woolworths is a chain of grocery stores including fresh produce. One of Woolworths goals is to promote healthy living, which is why the retailer ensures it would be able to provide a range of fresh produce including food that are gluten free and organic. Woolworths tested RFID technologies, particularly to track shipments of produce and to monitor the temperature within the transportation for this cargo. After a series of tests, Woolworths talked about the advantages of RFID technology but also offered its opinion on its disadvantages. According to Woolworths, the primary challenges concerning the adoption of RFID in the retailer’s supply chain is the high cost of this technology. Setting up the infrastructure for RFID and purchasing tags and casings are costly. Moreover, Woolworths also considered the viability of adopting RFID technologies considering the retailer’s environment (Freidlos n.d.). Water and metal, for instance, are common substances present in Woolworths environment, so to speak. Hence, the management is concerned that Woolworths would not be able to sustain the RFID infrastructure as its environment is not ideal for sophisticated technologies. Considering all the issues related to RFID technologies, Woolworths believes that adopting RFID is not the retailer’s priority at the moment. Nevertheless, Woolworths is open to doing so in the coming years considering the benefits and advantages of RFID to the company’s retail structure. Woolworths will continue to test RFID and monitor cost to look for arrangements that would lower the cost of the system for the company (Freidlos n.d.).
One of the leading RFID solutions specialist for retailers is RAMP RFID. RAMP has conducted research over time to determine the impact or effects of RFID in the retail industry. The company uses data from retailers in other countries to determine the outcomes of adopting RAMP. Some companies overseas that adopted and consequently gained from RFID technologies include Germany based Metro, United Kingdom based Tesco, and United States based Wal-Mart. From the performance of these large-scale giant retailers, RAMP has established the benefits of RFID technologies. Primarily, RFID technologies brought about improvement in the management of stocks and the reduction of employee turnover because of efficient workflow. De Marco, Cagliano, Nervo, and Rafele’s (2012, p. 333) research proves that RFID significantly improves the structure and operations of retailers by influencing better inventory control and allows them to address the needs of customers through effective customer service. For these reasons, RAMP is committed to providing RFID solutions for retailers in Australia (GS1 2014, p. 1-2).
Conclusion
The foregoing discussion explores IT in the retail industry. One of the trends in the retail environment is RFID, a mechanism that allows retailers to track and monitor inventory. Research studies prove, however, that RFID can also be used to improve other operations in the retail environment. Due to the benefits and advantages of RFID, adopting this technology remains to be a trend that retailers can adopt in the coming years to improve operations and outcomes.
Bibliography
De Marco, A., Cagliano, A. C., Nervo, M. L. & Rafele, C. 2012, Using system dynamics to assess the impact of RFID technology on retail operations. International Journal of Production Economics, 135:1, 333-344.
Freidlos, D. n.d., Australia’s Woolworths supermarket chain studies RFID. RFID Journal.
Ganesan, S., George, M., Jap, S., Palmatier, R. W., & Weitz, B. 2009, Supply chain management and retailer performance: Emerging trends, issues, and implications for research and practice. Journal of Retailing, 85:1, 84-94.
GS1. 2014, GS1 Australia’s alliance partner RAMP RFID introduces item level RFID for retail. Available at: www.gs1au.org/assets/documents/info//gs1_broch_allpartners.pdf. [Accessed: 26 May 2014].
Sarac, A., Absi, N. & Dauzere-Peres, S. 2010, A literature review on the impact of RFID technologies on supply chain management. International Journal of Production Economics, 128:1, 77-95.
