The adoption of RFID in fashion retailing: a business value‐added framework

Abstract

PurposeThe adoption of radio frequency identification (RFID) will create a revolutionary change in the management of a supply chain, particularly in the retail sector. The aim of this paper is to study the views of fashion retailers on RFID applications and, in turn, to analyze the added value to be gained by adopting this technology.Design/methodology/approachA two‐stage methodological approach was adopted. The first involved a multi‐case study of five large, highly representative fashion retailers in Hong Kong, in which in‐depth interviews were conducted with ten senior staff members. The second involved the design of a framework with four propositions for examining the values generated for fashion retailers upon the RFID implementation.FindingsThe findings show that RFID could be implemented in the fashion retailing in the customer relationship management, shop floor management, marketing and promotion, and logistics and inventory management. Improved operational efficiency and effectiveness, and increased sales and profits, are the major perceived benefits, while implementation cost, compatibility with current systems, data accuracy, top management attitude, and staff acceptance are the key challenges.Practical implicationsThe results give fashion retailers a better understanding of the potential benefits and challenges of adopting RFID. The retailers will, therefore, be able to make more informed decisions in operational planning and resource allocation. Moreover, the results may inspire more fashion retailers to use this technology.Originality/valueBy integrating the views of the potential users, the RFID‐based business value‐added framework supports a research agenda for further investigation of the use of RFID in commercial sectors and contributes to the understanding of technology transfer in a less technologically advanced fashion retailing industry.