RESEARCH REPORT

In brief

In brief

  • RFID is enabling a new wave of technological innovation and is playing an integral role in transforming the way business is done in the modern retail environment.
  • 110 retail executives across North America, Asia and Europe were interviewed about RFID adoption as part of the Kurt Salmon, part of Accenture Strategy 2018 RFID in Retail Study.
  • Retailers today are fighting to keep up with increasingly sophisticated and demanding consumers through investment in omnichannel capabilities, primarily enabled by RFID.
  • 69 percent of retailers around the world have cited a significant level of RFID adoption, and 80 percent believe its benefits cannot be replicated.


RFID (Radio-Frequency Identification) has experienced unprecedented growth in user adoption, capability development, and overall business impact within the retail industry. Of 110 global retail executives surveyed as part of the Kurt Salmon, Part of Accenture Strategy 2018 RFID in Retail Study, an impressive 69 percent of retailers have cited a significant level of RFID adoption. Much of this growth can be attributed to the requirement of omnichannel execution and the pressure to constantly improve the customer experience. While RFID cost per unit has been a hurdle for some retailers historically, lowering technology costs and increased recognition of use cases continue to strengthen the RFID business case.

Sixty-nine percent of retailers around the world have cited a significant level of RFID adoption.

RFID is mainstream retail

In North America, RFID has the largest footprint and it continues to grow as 92 percent of retailers in the region reported that they are progressing toward full adoption. Since 2016, this metric has increased by more than 25 percent—a solid indicator that RFID technology can finally be considered mainstream.

In Asia, with the growing pressure to serve customers who have the desire to shop anywhere at any time, 70 percent of surveyed retailers are turning to RFID to ensure they have both inventory accuracy and visibility. While the rest of the world has shown great acceptance of RFID, European retailers are lagging, with only 30 percent of surveyed retailers having begun RFID deployment. There are a number of companies however that use RFID extensively in Europe and we expect that group to grow as omnichannel pressures increase within the region.

VIEW THE INFOGRAPHIC "RFID: A RETAIL STORY"

92%

of retailers in North America report that they are progressing toward full adoption of RFID

30%

of retailers in Europe report that they are progressing toward full adoption of RFID

Key drivers of RFID adoption

A majority of retailers worldwide adopt RFID for the technology’s most well-known use case: inventory accuracy. Within just one year of leveraging RFID, retailers typically recognize increased inventory accuracy and omnichannel fulfillment. Retailers that maintain RFID beyond one year begin to explore more advanced use cases including blockchain enablement and in-store smart technology. Retailers are now beginning to explore these new use cases to enable other emerging technologies in order to address their business challenges. Top business pressures reported by our survey respondents are:

  • Deliver superior customer service: 28%
  • Enhance personalized marketing: 27%
  • Improve operating profits: 24%
  • Increased levels of out of stock: 24%

RFID adopters will have a leg up on their competition in implementing innovative, new technologies to address these business pressures due to the detailed data provided from RFID and real time trackability of individual product.

RFID use cases over time



Financial benefits of RFID

Retailers that were piloting RFID prior to our 2018 RFID in Retail Study reported ROI of 6.8 percent on average, whereas those that had fully adopted RFID achieved a 9.2 percent ROI, showing a strong correlation between adoption maturity level and reported return on investment. Simply put, there is a strong business case for almost every retailer to implement RFID and the financial benefits of adoption tend to grow over time. This trend is a result of several efficiencies that are gained as a retailer progresses from piloting to having fully adopted the technology.

The superior returns reported by full adopters are consistent across all use cases identified in the survey, including inventory accuracy, omnichannel fulfillment and reducing store labor. These results suggest tangible benefits from RFID adoption, and the growth in retailer adoption worldwide indicates that the technology is perceived as an increasingly worthwhile investment.

The financial benefits of RFID adoption tend to grow over time.

RFID enables omnichannel fulfillment execution

As RFID adoption progresses, improved inventory accuracy and positive return on investment enable more advanced use cases, and full adoption ultimately enables retailers to provide customers with a full portfolio of omnichannel offerings. While several retailers listed omnichannel offerings as one of their top business pressures, there is a significant disparity between RFID adopters and non-adopters. 83 percent of RFID adopters offer three or more omnichannel fulfillment options compared to only 24 percent of non-adopters.

Omnichannel capabilities by level of RFID adoption

Jason Sain

Senior Manager – Kurt Salmon, Part of Accenture Strategy


Andrew Wong

Managing Director – Kurt Salmon, Part of Accenture Strategy

Contributors

Benjamin Baranov

Analyst – Kurt Salmon, Part of Accenture Strategy


Sophie Chen

Manager – Accenture Strategy, Retail


Jacob Inderrieden

Analyst – Accenture Strategy


Matthew Owens

Analyst – Accenture Strategy


Jason Yu

Analyst – Kurt Salmon, Part of Accenture Strategy

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