Understanding the Value of Integrated RFID Systems: A Case Study from Apparel Retail
European Journal of Information Systems
This contribution is concerned with the business value of RFID technology in retail. We present a case study of an RFID project at Galeria Kaufhof, a subsidiary of Metro Group and one of the largest department store chains in Europe. The project encompasses a variety of RFID applications at the interface of store logistics and customer service. The contribution that our study makes to the literature is threefold. First, we describe an innovative large-scale trial that goes beyond what was done in earlier projects in several respects. The most fundamental difference compared to previous trials is the full integration of RFID event data with POS and master data, which for the first time offers the retailer the opportunity to directly observe and analyse physical in-store processes. Second, the heterogeneity of RFID applications implemented by Kaufhof allows us to theorize about the effects that RFID may have on business processes from an IT value perspective. We develop a conceptual model to explain the different cause-and-effect chains between RFID investments and their impact on firm performance, the role of complementary and contextual factors, and the difficulties in assessing these impacts using objective performance measures. Third, we compare the case to a prior trial conducted by Kaufhof about five years earlier. The differences between the lessons that the company learned in the two projects illustrates the impact of technological advances and standardization efforts in recent years on the managerial perceptions of RFID business value, which allows for the derivation of a number of useful implications for practice.
business value of IT
contribution to scientific community