The Impact of Radio-Frequency Technology on Retailing and Wholesaling

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Technological innovations have altered the business landscapes. Today, for instance, many interactive technologies that rely on Internet platforms have introduced disruptive traditional practices and forced many retailers and wholesalers to review their business practices. Innovative, interactive technologies have provided platforms for new robust business models such as Netflix, Amazon, eBay, and Alibaba, among others.

The Radio Frequency Identification (RFID) technology is not new, and many large organizations have successfully used it in the past. In the recent years, however, retailers and wholesalers have discovered the benefits of RFID technology as means of enhancing business processes in highly competitive business environments.

Retailers and wholesalers have noted the RFID technology would assist them to improve business efficiency and create competitive advantage. In this paper, the impact of radio frequency identification (RFID) technology on retailing and wholesaling is explored.

As retailers and wholesalers create strong markets for RFID, they have recognized some specific importance of the technology that drives it adoption. Specifically, retailers and wholesalers strive for processes optimization and effective tracking of goods. These businesses aim to attain enhanced speed and visibility with RFID technology. Consequently, they will achieve more significant operational advantages, efficiency and effectiveness along the supply chain.

Wholesalers use the RFDI technology to ensure that products can be delivered to warehouses and distributors at the right time to improve purchase. When retailers and wholesalers achieve improved visibility through the RFID technology, they reduce inventory levels, cut labor costs and increase sales. For many retailers and wholesalers, the cost reduction advantage achieved from adopting the technology is the most appealing.

In this regard, retailers and wholesalers expect to reduce costs through effective management of inventory and expenses. Specifically, cost-reduction through RFID technology targets waste reduction, manageable inventory levels, elimination of manual processes, reduction in costs of product handling and logistic costs, reduce cases of claims and enhance asset usages.

Retailers and wholesalers also focus on increased revenues through the deployment of RFID technology. In most cases, retailers and wholesalers are deploying the RFID technology to drive sales. Consequently, they can offer innovative solutions, which meet specific needs of customers.

The RFID technology helps retailers and wholesalers to reduce out-of-stocks, increase the rate of fill rates, avoid shrinkage, enhance inventory movements, and customer support. At the same time, retailers and wholesalers use RFID technology to curb counterfeit products.

It has been observed that many manufacturers, wholesalers and retailers globally lose sales and profits because of the increased production of counterfeit products. It is also imperative to recognize that counterfeit products are primary safety and security risk for consumers. As such, many wholesalers and retailers have deployed the RFID technology to identify counterfeit products in their supply chains.

Original products are tagged with RFID supported with real-time access to databases and, therefore, any counterfeit products can be quickly identified and separated. The RFID technology also reduces cases of theft, shrinkage and diversion tendencies. The deployment of the RFID technology has assisted retailers and wholesalers to identify cases of theft and diversion across the supply chain, including at the factory floor, the warehouse, the shelf and points of sale.

Finally, the RFID technology has also assisted retailers and wholesalers to create competitive advantage. Efficiency in business processes and increased profitability attributed to the RFID technology assist retailers and wholesalers to meet their business goals and establish competitive advantage. Firms can easily compare their performances against the industry peers to determine their competitive advantage.

The RFID technology has been touted across industries as a tool for enhancing competitive advantage. In this regard, competitive advantage derived from the RFID technology may include enhanced productivity along the supply chain, increased output from employees, flexibility, cost advantage and determine the required by a specific date.

Retailers, wholesalers and distributors may also realize the impact of the RFID technology in their overall mission. Generally, organizational mission or purpose shows the primary functions of an organization. It may also reflect organizational endeavors to achieve the needs of its customers using specific tools, including technologies and related devices.

As such, this view posits that organizational mission is growth-oriented by focusing on specific practices that identify the needs of customers and potential tools for meeting such needs. At the same time, it also stretches further to account for changes in the business, including competition. Organizational mission is therefore dynamic and always seeks for continuous improvement on business processes and outcomes.

It always focuses on strength and weaknesses for critical assessment for improvement. In this regard, the RFID technology, as a tool of business, can impact the mission significantly. First, the RFID technology has enhanced effective communication between customers, retailers, wholesalers and distributors. Consequently, these businesses are able to meet clients’ needs fast. Availability of information has ensured that the company can understand future supplies and demands based on future wishes and needs of customers.

Preparation for the future promotes organizational mission. Second, the RFID technology assists organizations to realize their mission by understanding business activities. For instance, it helps organizations to monitor and project business activities, including what the competition does. When a company is able to identify changes and react promptly to manage them, then it can advance its business goals and achieve its core mission.

The RFID technology ensures that organizations develop superior supply chain systems relative to competitors. Hence, customers will most likely to use superior services.

Third, the RFID technology promotes organizational mission by determining available potential. In this regard, retailers, wholesalers and distributors are forced to use their strategic tools to enhance their respective growth strategies. Besides, it helps organizations to position themselves strategically based on their technological capabilities and human resources and, therefore, enhancing differentiation.

Fourth, the RFID technology helps organizations to advance their mission by facilitating changes. For instance, retailers, wholesalers and distributors may obtain generic technologies and later acquire new ones to reflect ongoing changes in the industry. In this manner, an organization would not be left behind technologically. Fifth, the RFID technology assists organizations to evaluate their strengths and weaknesses relative to strategic position.

Consequently, retailers, wholesalers and distributors can adequately understand the industry dynamics and changes that facilitate performance. Finally, the RFID technology can assist organizations to realize their mission through evaluating their achievements and results. If these achievements are not desirable, then an organization can use the information to improve business processes and, therefore, advance its mission.

It is imperative for retailers and wholesalers to implement, train, focus on, or mentor someone on RFID technology. However, the RFID technology, just like any other technologies, may face resistance in an organization despite its robustness and obvious benefits. If any retailer or wholesaler can implement it properly, then it can realize massive advantages and enhance competitiveness.

In addition, it is essential to note that many organizations that have attempted to implement the RFID technology have found it more challenging and eventually failed. Implementation of the RFID technology is a complex initiative that requires upfront user education and effective planning to enhance successful implementation. The retailer must recognize that the implementation of the RFID technology requires assistance from more experienced users.

This would ensure that technical challenges are effectively handled before they can derail the implementation. For effective implementation, organizations should manage expectations. That is, all business activities and expectations from the RFID technology should be evaluated to determine actual capabilities of the new system.

Implementation also requires retailers to undertake process evaluation to understand major processes that require the RFID technology. The technology should be implemented to improve the processes and practices while taking into consideration possible future developments.

All the necessary software and hardware materials for successful implementation of the RFID technology should be available and documented. Functional responsibilities must be clearly identified to ensure smooth implementation. Documentation would be essential for review all stages and ensure system adoption and acceptance among end-users. Changes in requirements can be effectively managed when they are documented.

Retailers should also determine that the physical installation location lacks any possible interference to ensure that successful deployment of the system.

In addition, more robust hybrid RFID technology may be chosen to develop the best solutions. For instance, the RFID technology may have capabilities to read bar codes and still allow users to read the codes manually. On the same note, retailers should also select the preferred tags properly because of diverse configurations. Different tags are developed because of harsh environmental conditions.

Finally, successful implementation of the RFID technology requires end-user training and effective change management. Retailers and wholesalers should focus on change management to enhance adopt and acceptance of the RFID technology in their organizations. It has been noted that challenges associated with the implementation of new technologies sometimes emanate from employees rather than the technology itself.

Hence, addressing the change process during implementation can mitigate some noted issues. Change is a major challenge in any organization notwithstanding the level of approach. Thus, planning, effective communication and training of end-users are imperative for change management.

Retailers should select influential employees to manage change and ensure successful implementation of the RFID technology. The RFID technology is most likely to impact several aspects of organizational operations. Change management requires adequate resources, as well as management support, communication and buy-ins for users.

Retailers should involve employees during early stages of the RFID technology implementation to minimize resistance.

Retailers and wholesalers can still incorporate the RFID technology into their current occupational structure successfully. It is observed that some large retailers like Wal-Mart have successfully integrated new RFID technologies into their existing operations to account for new customer demands and enhance operational efficiency.

In fact, the RFID efforts should be continuous and sustained. It is advisable that organizations should use simple approaches and minimize many complex processes during installation and integration. In this case, the integration process should be gradual to be successfully incorporated before the full system can be completely adopted.

Retailers should assemble the best team across various departments, including business units, IT and financial departments alongside other stakeholders such as vendors and support team to assist with the system integration. Testing and evaluation of the system are critical during this stage to ensure that solutions are found for any noted issues. In addition, it is recommended that the integration should be initiated at a single location by focusing on friendly tags.

The process can then be tested with tag placement, while processes can be reviewed and eventually go live with fully integrated RFID. The status quo should only be maintained for a given period to enhance change management and manage smooth transition. Overall, integrating the new RFID technology into retailer’s existing occupational structure can assist critically in improving customer service, cost-cutting and streamlining the supply chain.

During then integration process, retailers should fully incorporate the new system into their current policies, practices, culture and people to ensure the technology is fully tapped and full potentials realized. Besides, new implementation strategies such as incorporating cloud computing are available to reduce costs.

The essay has focused on the impact of radio frequency identification (RFID) technology on retailing and wholesaling. It shows that the RFID technology offers multiple benefits to retailers, wholesalers and distributors along the supply chain, including operational efficiency, competitive advantage and cost reduction.

At the same time, the RFID technology helps organizations to advance and realize their mission while growing business. It is also possible to implement and train the staff on the RFID technology. Retailers that integrate the new RFID into existing occupational structures have also noted positive outcomes, specifically if the process is well managed and transition is gradual.

References

Attaran, M. (2012). Critical Success Factors and Challenges of Implementing RFID in Supply Chain Management. Journal of Supply Chain and Operations Management, 10(1), 144-167.

Harps, L. H. (2005). Supply Chain Technology: Integrating the Old & New. Web.

Owunwanne, D., & Goel, R. (2010). Radio Frequency Identification (RFID) Technology: Gaining A Competitive Value Through Cloud Computing. nternational Journal of Management & Information Systems, 14(5), 157-164.

Shin, S., & Eksioglu, B. (2014). Effects Of RFID Technology On Efficiency And Profitability In Retail Supply Chains. The Journal of Applied Business Research, 30(3), 633-646.

Varadarajan, R., Srinivasan, R., Vadakkepatt, G. G., Yadav, M. S., Pavlou, P. A., Krishnamurthy, S., & Krause, Tom. (2010). Interactive Technologies and Retailing Strategy: A Review, Conceptual Framework and Future Research Directions. Journal of Interactive Marketing, 24, 96-110. Web.

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The Impact of Radio-Frequency Technology on Retailing and Wholesaling

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