Business Value Added through RFID Deployment in Retail: A Synthesis, Conceptual Framework and Research Propositions

Abstract

Retailers can achieve superior shop floor performance through deployment of RFID. Reduced stock out, reduced labor cost, reduced inventory cost, enhanced visibility, and increased customer satisfaction are some of the key benefits of RFID adoption. This paper aims to examine how retailers can adopt radio frequency identification (RFID) to achieve overall business excellence through value added-customer centric approach. The paper gives a better understanding of potential benefits of RFID deployment for retailers by presenting retail marketing mix model. This paper offers a conceptual framework for identifying business value added for a retailer upon the RFID deployment and formulates a list of propositions, which form the broad basis of an empirical research agenda. The paper provides an evaluation framework for NOPAT, ROI and EVA measurement for RFID initiatives. Future research may be directed to calculate economy value added (EVA) of such investment in RFID by retailers.

Keywords: Business value added, economy value added, EVA, marketing mix, retailing, radio frequency identification, RFID, retail industry, shop floor performance