12/7/2022
Management
Information Systems
Marks & Spencer Embraces RFID – Case
Study
Management Information System – ADM 2372[B]
LUKE RUSSELL
UNIVERSITY OF OTTAWA – TELFER SCHOOL OF MANAGEMENT
ADEEB AHMED – 300177194
RIA KUNKULOL – 300110801
MATTHEW RICHARDSON - 300184720
HAYDEN WEEDMARK – 300234429
BO WANG – 300169628
XUANKUN ZHOU – 300194356
Describe three ideas of how RFID technology in the retail industry can generate increased endcustomer satisfaction. (3 ideas * 2 points = 6 marks)
RFID has many valuable benefits for retailers and especially customers. The first example of
end-customer satisfaction that it can provide is the advanced inventory technology it comes equipped
with. This makes finding clothing in specific sizes or clothing far easier and quicker. The method
retailers use makes sure that they are able to track which sizes or specific designs are selling well or
being ordered more. Most people have experienced looking for an article of clothing and never being
able to find their size. This can become extremely annoying for consumers and can even completely turn
customers off from certain businesses. Compared to a store that always has a variety of sizes and styles
available, it is easy to see why this is desirable and provides more satisfaction for customers. This
encourages eager return customers and good word of mouth.
Another key benefit that customers or RFID users may experience is cheaper costs. At Marks &
Spencer, the efficiency of the RFID inventory system has increased vastly and the costs of holding
inventory have dropped considerably. This is not the only way it helps save money — with less time
spent on inventory management, employees do not have to be paid and trained to track down items
because it is already being managed by RFID technology. This provides an obvious benefit to retailers
and gives them the opportunity to offer extended margins to customers. With this, customers experience
lower costs when purchasing the same item compared to competitors who have not implemented RFID.
When customers are choosing between two businesses, it has proven that they will almost always lean
towards the cheaper option. This gives these organizations another competitive edge.
Additionally, RFID technology benefits consumer satisfaction through the transparency it
provides customers. As the supply chain continues to improve and innovate, it is no surprise that
customers are also able to access inventory better. When online shopping or even just searching for a
product in-store, customers are able to see far more detailed product descriptions. Compared to the
barcode system, RFID tags have easy-to-access information about the product available in an
understandable way. This makes it so that customers can find exactly what they are looking for and
know it will be restocked. It is upsetting for consumers when availability information is listed
incorrectly online resulting in time lost and irritation. RFID technology has drastically reduced this
outcome and in turn, provides a significantly more positive end-customer experience.
Describe three potential disadvantages to implementing RFID technology in a retailer such as
Marks & Spencer? (7 marks)
Radio frequency identification (RFID) technology allows manufacturers to attach tags to goods
with antennae and computer chips to track their movements using radio signals. The chip in the tag is
programmed with information that uniquely identifies an item and can be scanned by a reader that
passes the data over a network to a computer for processing. RFIDs were developed to replace universal
product codes (UPCs), also known as barcodes, which are made up of 12 digits batched in various
groups, and quick response (QR) codes, which are two-dimensional codes readable by dedicated QR
readers and camera phones. RFIDs have revolutionized the retail space however they come with
downfalls.
With a significantly higher upfront cost when compared to the barcode system, RFID
implementation can quickly become expensive and complex. A typical barcode label costs a few cents
while an RFID can range from one dollar to upwards of 30 dollars depending on the specific type. A
specialized printer is required to encode the labels and retail stores will require Wi-Fi for a seamless
experience. Though it can be a catalyst for improving customer experience, enhanced data collection,
and smoother operations, it requires extensive investment — both from a time and cost perspective. In
addition to hardware costs, training for staff and an RFID service provider with a clear understanding of
the technology capabilities and limitations must be paid for as well. The system must be implemented in
carefully planned stages, which will be costly, time-consuming, and unfortunately not feasible for most
businesses.
Interference issues are also a major disadvantage of RFID technology. The transmission from
tags may encounter interference with several different materials such as heavy metals, radio waves, or
liquids. With retailers such as Marks & Spencer, items like clothing with metal details or prepared food
with fluid elements cannot be fully integrated into the system. Liquid products can affect the reliability
of the signal and using RFIDs on metal requires a special type of tag with a blocker programmed to
prevent the antenna from being deactivated. With these tags and labels, the medium and size are very
important. What’s more, stores will no longer be able to use shopping carts because the metal will
prevent an accurate and reliable scan. With barcoding, the application and surface on which the label or
tag will be used must still be considered, however, a barcode will always be readable despite the
material or contents of the item. RFID technology requires different types of tags depending on the
characteristics of the product itself, whereas one type of barcode label can be used on various items.
Another major disadvantage of RFID implementation at retailers is the lack of regulation and
security. According to experts, RFID tags are easy to clone, especially if there is no authentication
mechanism on the chip. 1 Moreover, RFID’s tracking capability presents major privacy concerns for
customers. If the tag is not removed, the vulnerable technology can track users’ purchases and
movements, exposing them to hackers and identity thieves. This technology is not regulated in many
countries and information on standards varies from region to region. Customers are not as protected as
they believe and extensive investment into security will be required in order to lower the barriers to
expanding the system. A lot remains to be done to streamline the process of RFID implementation and
though the inventory management space is innovating, it may not be practical for retailers yet.
Furlong, J. (2022, September 6). RFID for retail: Know the pros and cons. Business.com. Retrieved December 4, 2022,
from https://www.business.com/articles/rfid-for-retail/
1
Which of the computer-based information systems components (see Chapter 1) are necessary to
implement RFID technology by a retailer? Explain why each one of them is necessary. (6
components * 1 point each = 6 marks)
The computer-based information systems components are necessary when a retailer want to
imply the RFID technology. These components include hardware, software, database, network,
procedures and people.
Hardware consists of devices that accept, process, and display data and information. Without any
hardware, the RFID technology is not able to be applied into any industry. RFID technology requires the
reader to send out a signal to obtain the product information in the passive tag or the reader to receive
the signal from the active tag to obtain the product information. After the reader decoding, there will be
a central information system for data processing. Active tags, passive tags and readers are the
indispensable hardware of RFID technology.
In RFID technology, the presence of electronic tags and readers is not enough. Even if the reader
has been able to complete the decoding, but is faced with a large amount of data, it still needs an
information processing system to solve these problems. So, a complete RFID technology must be
supported by software to analyze all the data.
In RFID technology, there is a huge amount of data to process. This data contains a lot of
important data such as product information, which needs to be saved. This is why RFID technology
requires databases to store data. With the database, the data of RFID technology can not contact the
rapid information exchange and storage technology through the radio waves, through the wireless
communication combined with data access technology, and then connected to the database system, to
achieve the non-contact two-way communication, so as to achieve the purpose of identification.
In the application of RFID technology, most scenarios need the application of a network. RFID is
widely used in the logistics industry, including the tracking of goods in the logistics process, automatic
information collection, storage management applications, port applications and express delivery. At the
same time, it has great potential in identity identification, public transport management, fruit and
vegetable management and so on. All of this requires a network of information integration to actually
operate. So the network is very necessary in the application of RFID technology.
RFID technology is composed of hardware, software, database and network, but these parts need
to cooperate with each other and have their own ways of working, which is why the RFID system needs
procedures. With proper procedures, RFID technology can speed up the reading and writing speed, and
can even have the potential to identify and read the contents of multiple labels at the same time, greatly
improving the efficiency of information transmission.
In RFID technology, the reader transmits radio wave energy of a specific frequency to drive the
circuit to send out the internal data. At this time, the reader receives and interprets the data in order and
sends it to the application program for corresponding processing. These processes don't seem to require
people. But in fact, RFID technology needs people. The maintenance and repair of RFID technology
need to be completed manually. In some cases of extreme weather, people are needed to ensure the
normal operation of RFID technology. People are also an integral part of supporting RFID technology.
Provide three additional examples of passive or active RFID used by organizations in different
industries, and describe the advantages of each. (3 ideas * 2 points each = 6 marks)
There are two different kinds of RFID systems: passive and active. Passive RFID utilizes tags
that are powered by electromagnetic energy sent out by RFID readers rather than through an internal
power source. Access control, file tracking, race timing, supply chain management, and smart labeling
are some of the uses of passive RFID tags. Many industries can afford to use passive RFID systems
because of the cheaper cost per tag. On the other hand, active RFID systems utilize RFID tags that are
powered by batteries and continuously broadcast their own signal. They are frequently employed as
‘beacons’ to precisely track the location of assets in real-time or in fast-paced settings such as when
tolling. Compared to passive tags, active tags offer a significantly wider read range, however, can be
much more expensive.
Advantages of Passive RFID
•
•
•
•
Small Size
Lightweight
Affordability
Longer Shelf Life (up to 20+
years)
Advantages of Active RFID
•
•
•
Extremely Rugged Tag Options
Increase tag Abilities with Partners Tech (GPS,
Sensors, Etc)
Extremely Long Read Range
Similar to within the transportation sector, manufacturing processes of all sizes are increasingly
using active RFID for a variety of crucial tasks. Undoubtedly, these technologies are being used to
manage production assets and track the whereabouts of both personnel and equipment in the building.
Pallets used to store raw materials and other mobile inventories are no different. They also keep an eye
on environmental changes in temperature and motion that may affect expensive equipment.
In order to create lightweight, comfortable hotel panic button systems, systems such as AirFinder
combine RFID technology with Bluetooth and ultrasound. This is done to ensure hospitality staff is safe
at all times in the buildings where they work. They rapidly send a distress signal that registers
employees' precise location and are built to run from a basic plug-in device in each room.
RFID technology is also used by retailers to increase store stock accuracy. The typical retail
inventory method still exists and is laborious and time-consuming. Instead of relying on individual
package scanning and blind receipts, RFID enables quick and accurate check-in of entire shipments.
Additionally, it is used to locate items, shorten cycle counts, and automatically place orders for goods at
safety stock levels.
In an effort to enhance customer satisfaction and inventory accuracy, Lululemon has tested RFID
technology. It assists buyers in purchasing goods by using RFID to show them exactly where it is. The
hang tags provided by the merchant have chips attached to the back that reveal the location of the
product: either on the floor or in the backroom.