Radio frequency identification (RFID) implementation in the service sector: A customer-facing diffusion model

Abstract

Cost-conscious businesses traditionally have focused on using radio frequency identification (RFID) systems to enhance the efficiency in the supply management/logistics process. These firms go through an implementation process that focuses on the supplier-facing, back-office operations. Drawing from observations from three case studies in the service sector, we develop a complimentary customer-facing model, which focuses the diffusion of RFID as originating from those activities associated with the delivery of the actual service offering. Our diffusion model contrasts the potential impact on organizational performance from both a supplier-facing and a customer-facing perspective. By focusing a firm's RFID strategy on customer-facing activities, a firm can use the technology to change its basis of competition from an efficiency-oriented strategy to one where RFID has more strategic implications such as providing the foundation for new products or services or by providing the infrastructure to enhance customers’ value perceptions in order to strengthen customer loyalty.