Radio frequency identification (RFID). Hudson Bay Company's next great competitive advantage

Résumé du document

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.

Extraits

[...] Conclusion RFID technology may become the next great productivity booster for the retailing industry. 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. [...]

[...] Analysis of Current System The current Point of Sale (POS) system at HBC collects information via bar codes. Given the memory of a bar code bytes), this information is limited to the price, item ID and the date/time of sale. With the implementation of the RFID tag, the system will be able to collect much more information (Goldman, Online). Examples include the size, weight, color, brand, condition of the item, and more, all at the point of sale. Better information mining will allow HBC to assess consumer trends and improve their forecasting ability. [...]

[...] GXS. October Online. Accessed November Available at http://www.gxs.co.uk/gxs/newsroom/pr/2005/10242005.htm. “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”. [...]

[...] Rewritable and secure RFID tags should be used, which are significantly more expensive but can be re-used with little risk. The tags must be secured so that a random customer equipped with an RFID writer cannot change the information on the chip before checking the item out. Software already exists that would allow a customer to do this (Gao, Online). An encrypted RFID tag would therefore attached to an antitheft device upon purchase, then added to a garment with all the EDI information embedded on it, and perhaps more. [...]

[...] June Online. Accessed November Available at http://www.rfidjournal.com/article/articleview/2390/1/1/. Woods, Jeff. Wal-Mart is Still Excited About RFID”. Gartner Research. January This tag is large enough to store all required information at an acceptable read range, and could include basic encryption features. [...]