The hype around Radio Frequency Identification (RFID) technology – a revolutionary information-gathering method whereby information in a tag can be read from up to 300 feet away – has caught the attention of many retailers in North America. Retailers such as Wal-Mart and Tesco (in the U.K) have begun piloting the technology: in 2006, Wal-Mart's RFID trial lead to a 16% reduction in product stock-outs (Sullivan, Online). The Canadian retail environment is constantly changing: factors such as the growth in the relative purchasing power of the Canadian dollar, increasing competition from discount rivals and shifting consumer trends provide Hudson's Bay Company (HBC) with new challenges as well as opportunities for growth. In order to deal effectively with constant change, HBC has developed five strategic initiatives through which it hopes to achieve an additional $1.5 billion in incremental sales from existing operations. HBC's overall strategic direction is to provide consumers with a more augmented shopping experience; the implementation of RFID technology can be instrumental in achieving this objective.
[...] Introduction The gradual evolution of Radio Frequency Identification (RFID) tags in recent years has been extremely promising, and has made the successful implementation of this technology one of the next great opportunities for the retailing industry. Although this technology was first discovered in the early 20th century, the production costs of each tag have decreased exponentially in recent years. Furthermore, the size of each tag has been reduced to the point where it can be easily implanted on retailed items and still store a significant amount of information. [...]
[...] “Hudson's Bay Company Overview”. DataMonitor Online. Accessed October Available at http://www.computerwire.com/companies/company/?pid=3010875C-61C5-4453-BBCE- 1B22B0CC9CBD. “Privacy Best Practices for Deployment of RFID Technology”. Center for Democracy & Technology. May Online. Accessed November Available at http://www.cdt.org/privacy/20060501rfid-best-practices.php. “Study: Retail Trade Since the Turn of the Millennium”. Statistics Canada. October Online. Accessed October Available at http://www.statcan.ca/Daily/English/051017/d051017a.htm. Adams, David. RFID Will Work in Metal Environments”. UsingRFID.com. April 2005. Online. Accessed November Available at http://trenstar.com/pdfs/How%20RFID%20will%20work%20in%20metal%20environment s.pdf. Birchall, Jonathan. “Wal-Mart Pushes On With Product ID Tags'. Financial Times. February Online. [...]
[...] The evolution of this technology must be closely followed, because to lead the industry in RFID could lead to the growth of a powerful competitive advantage Hudson's Bay Company. RFID technology can be integrated into the advanced systems currently in place to control distribution with the company, providing additional information to improve decision making and management control. This is an opportunity which warrants immediate investigation by key decision makers at Hudson's Bay Company. Gartner Research estimates that effective RFID capability will separate the winners from the losers in the same way that collaborative logistics technologies has done for the last ten years. [...]
[...] Better Inventory Management Another major advantage of Radio Frequency Identification technology is that manual counting will no longer be necessary: instead, a scanner will be able to do a product count in seconds (Goldman, Online). Therefore, RFID technology will be useful for high-volume, higher-margin items that currently require manual counting. The technology can also be applied to apparels, as well: employees often have to identify many different garments that are haphazardly stacked or thrown together a typically labor- intensive process. [...]
[...] This technology presents a method for Hudson's Bay Company to give designer-value service at depot-level costs, and should be investigated very seriously. For a financial analysis of expected cost of this pilot project, please see Exhibit 2. Strategic Analysis of RFID's Application to Zellers Zellers operates in the ‘discount-value' segment of the market, operating in a market where the product margins can be quite thin (HBC Briefing, Online). Can this company continue to offer “Every Day Low Prices” while embracing the benefits of Radio-Frequency Identification? [...]
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