Environmental Factors Influencing the Intention to Adopt RFID Technology in Retail Industry: An Empirical Study

Abstract

Today, radio frequency identification (RFID) technology is considered as a paramount tool in boosting the competitiveness of supply chain firms. There is an overall consensus regarding the remarkable influence of RFID upon the productivity level of firms. The realisation of such influences will only be tangible if, and when, RFID’s systems are extensively spread and used in the supply chain. It is crucial to realise the determinants of RFID adoption intention among the firms. There exists several reviews within the literature section on ‘RFID adoption models exemplified at the individualistic level’ and even fewer at the organisation level. Drawing upon diffusion of innovation (DOI) model, this study analyses the environmental factors influencing the RFID adoption intention among the retail firms in Malaysia. A questionnaire survey on 96 retail firms in Malaysia is conducted to test the proposed research hypotheses using logistic regression. Empirical results indicate that social uncertainty and competitive pressure are demonstrated to have significant negative and positive effects on the firm’s intention to adopt RFID technology respectively. While majority of prior works considered technological factors influencing the adoption decision among both adopters and non-adopters, this study uses a wide range of environmental constructs with relative measurement items to explore the initial determinants of RFID adoption intention among only non-adopters. Thus, the components and findings of this study are valuable for potential retail companies that have not yet adopted RFID technology. The study also provides several important suggestions for researches who study in innovation adoption domain.