It’s 9 a.m. at a Sam’s Club in the Dallas suburbs. A mother is pushing a cart with a broken wheel through the store, stocking up for her daughter’s soccer team party. As she navigates through the towering aisles she buys cases of household products. In doing so she has become a part of Wal-Mart’s grand experiment. As reported in Information Week, it is very likely that due to the warehouse nature of the store, Sam’s Clubs shoppers in North Texas will be the first to actually take home RFID-tagged cases of goods, bicycles, or apparel items being shipped to Wal-Mart by its top suppliers.
While those who are working to pilot and implement RFID tracking may be well versed in the technology and see its benefits to smarten the supply chain, everyday consumers are likely to not be aware of RFID, and those who are may well associate RFID with fears of corporate and governmental “Big Brother” technological oversight. Thus, as RFID technology moves from the back-end of the supply chain to the consumer level, it will become increasingly important for retailers and consumer goods manufacturers to monitor not only the tagged pallets, cases, and individual items, but consumer awareness and attitudes on the whole spectrum of automatic identification technologies.
A major new research program is seeking to gain insight into American consumers’ awareness of RFID and their sentiments toward the technology. BIGresearch, a Columbus, Ohio-based market intelligence company that focuses on consumer issues, recently released the RFID Consumer Buzz Report: Understanding Consumer Response to RFID Technology. The goal of BIGresearch is to deliver actionable intelligence to companies, in order that executives might do a better job of:
- educating customers on the benefits of RFID technology;
- understanding consumer privacy concerns so that they may be better addressed; and
- responding to any negative publicity stemming from RFID applications.
This major research effort will serve as baseline data for a planned quarterly report that will chart both consumers’ knowledge about RFID and their attitudes on automatic identification technology.
From their web-based survey, which had over 8500 participants and was representative of the national population, the researchers found that at present, 28.2% of American adults are aware of RFID technology. In examining their findings, BIGResearch discovered what can best be labeled an “RFID gender gap,” as men were found to be more than twice as likely as their female counterparts (39.7% as compared to 17.6%) to have at least rudimentary knowledge about RFID. More importantly, amongst those consumers who had an awareness of RFID, men (55.7%) were significantly more likely than women (40.0%) to perceive the concept of using RFID to track products as being a “good idea.”
What is the significance of this RFID gender gap? It appears that we are headed down a familiar road, for as with other past technological developments (i.e. cell phones, the Internet, etc.) men will be the likely “early adopters” of RFID. As such, men will have better comfort levels with the technology and will likely be more inclined to seek out and even create new uses for RFID in their homes and their lives. These “early adopters” will also serve as an important influence group in educating their non-RFID friends, family and colleagues on RFID and serving as a reference point to say that the technology is “O.K.”
As part of their methodology, BIGResearch partnered with Artafact, a Freemont, California-based company that specializes in conducting online focus groups. This was done to “drill down” into the knowledge and attitudes of both consumers that had RFID awareness and individuals who had not been aware of RFID before participating in the research. Linda Stegeman, President of Artafact, observed that the focus groups found that: “People are not only aware of RFID, but they can accurately describe what it is. They knew it is being used to track products in the supply chain.” For instance, a 65 year-old man who participated in one of the two online focus groups with RFID knowledgeable individuals was able to describe RFID as enabling firms to track merchandise. The researchers found that the Internet was the most common means through which consumers are gaining information about RFID. In fact, almost a quarter of those who were knowledgeable about RFID reported first learning about RFID via the web.
The online focus groups also revealed the significant hurdles companies will need to overcome in regards to consumers’ privacy concerns with RFID technology. Among those panel members who had some degree of familiarity with RFID technology, while they were indeed concerned over the technology, they placed RFID in context as being just one of many actual and potential threats to individual privacy. In contrast, participants in the focus groups conducted with those unfamiliar with RFID expressed alarm over RFID tagging. As Artafact’s President, Linda Stegeman observed, “Those who were not aware (of RFID) seemed to be surprised to learn about the technology, and they gravitated more toward the potential negative impacts of RFID.” Not only did they air concerns that the technology could be employed by manufacturers and retailers to serendipitously track their post-purchase behaviors, but that eventually, criminals and thieves could literally assess their potential targets through scanning for RFID tags. Participants in both the RFID Aware and Unaware panels were in agreement over their concern that government agencies could potentially use auto-ID technology to track them, their possessions, and their behaviors.
Looking ahead, research such as this will become increasingly important as RFID-tagged products start to routinely appear on regular store shelves. Retailers and manufacturers must try and better educate consumers about the value proposition of RFID. While RFID has demonstrated the ability to lower costs, increase product availability, reduce out of stock conditions and theft, consumers do not see these benefits as being direct and important to them. As one participant in a RFID Unaware focus group skeptically stated in response to the prospect that RFID would benefit her, she reacted with, “To improve product availability….yeah, right.” Thus, consumer facing companies should look to market the personal benefits of RFID tagging and not dwell on supply chain efficiencies, which are too far removed from the consumer level to be meaningful to the average shopper. Based on his company’s work with major retailers, Phil Rist, BIGresearch’s Vice-President of Strategy, advises that executives must realize that privacy is, and will likely continue to be for some time, a significant issue in consumer’s minds. Thus, Rist advocates: “Rather than ignore privacy concerns and hope they don’t come up, they can build consumer education into their rollout strategy.”
The RFID Consumer Buzz Report is available on a subscription basis to interested parties. You can learn more about it and view top-line results at