- Following RFID Since Technology’s Infancy
- Highlights that Propelled RFID Forward
- Growth and Setbacks Like Patent Litigation
Marshall Kay first came across radio frequency identification (RFID) technology in 2002 whiles working at management consulting firm A.T. Kearney. As a Kearney consultant, Kay, now a noted RFID specialist and retail strategist, was participating in a project supporting the Grocery Manufacturers of America (GMA), now known as the Consumer Brands Association.
Marshall Kay
The project, sponsored by the GMA’s Industry Affairs Council, with Kraft Foods‘ Irene Rosenfeld (now CEO) as group VP, was focused on the connection between the grocery industry’s data-synchronization efforts and the emerging RFID technology. “Prior to this assignment,” Kay recalls, “I knew nothing about RFID. But I quickly sensed the important role it would play in retail and other sectors. I was hooked!” These days, Kay is among the prominent voices in discussing RFID technology’s impact on the retail industry, including the ways in which it is and can be deployed, the return on investment it can offer, and how to measure that ROI.
Kay has seen the RFID industry through its highs and lows, and he leverages the knowledge he’s gained to provide insight into what the technology can offer. He started his career as a lawyer, then earned an MBA degree from the University of Michigan Business School, now known as the Ross School of Business. At the time, he had management consulting in his sights and thus launched his consulting career as a generalist. Kay’s work included assignments for an automaker, a global courier, a department store chain and a company making frozen desserts. “My passion for retail came afterward,” he recalls.
Following RFID Since Technology’s Infancy
By 2004, Kay’s interests had centered on RFID as an enabling tool to make retail more efficient. Following the GMA’s 2002 RFID project, he went on to lead the North American RFID practice for Kurt Salmon Associates (KSA). At that time, RFID was a lesser-known technology that still lacked global standards, something that was quickly resolved with the creation of the Electronic Product Code (EPC) and Gen 2 RFID standards. He launched his own consultancy, RFID Sherpas, in 2007 to address what he viewed as a gap in the marketplace. “I knew that retailers needed help navigating the maze of software, hardware and tag choices,” he says, “and extracting maximum ROI from those investments.”
Fifteen years later, that need continues. Kay knew that selecting technology vendors and launching the RFID program would be a challenging first step, but that it would just be an early part of a retailer’s journey with RFID. Those adopting RFID solutions would face decisions about how to use the technology to optimize store processes, and adding new operational capabilities would be increasingly important, especially since digital and physical retailing were in the process of converging. Unfortunately for retailers, Kay says, “The traditional project delivery model of large consulting firms,” such as sending teams of consultants to a client’s offices for months at a time, “was not what they truly needed.”
Thus, Kay positioned RFID Sherpas as a more flexible alternative. The company employs a team of retail consultants who focus on business strategies that include store operations, process re-engineering and project management. Ultimately, Kay says, a depth and breadth of expertise have delivered clients to the consultancy. He assumed that playing a central role in numerous retail RFID programs would ensure the firm could offer deeper expertise than competitors, “and that word of mouth from happy clients would produce a steady stream of interesting consulting projects.”
Highlights that Propelled RFID Forward
Throughout the past two decades, Kay has watched RFID’s growth, as well as its related growing pains and successes. There have been a lot of highlights along the way, he says, citing a few driven by global retailers. For instance, early apparel deployments of RFID were driven by forward-thinking companies like Macy’s, Inditex and Lululemon, which built the technology into their omnichannel strategies.
One key to their success, Kay notes, was support at the top from each company’s CEO. He says Target’s decision to take RFID tagging beyond apparel and footwear, and to tag all soft home merchandise as well, represented another step for the technology. Target launched its apparel and home décor deployment with RFID tags to uniquely identify each item in 2015 (see Target Announces Nationwide RFID Rollout).
Uniqlo took RFID use into yet another retail application, by leveraging tags on goods, with readers at the point of sale to speed up the checkout process. The global retailer’s self-checkout counter incorporates an RFID reader that interrogates ID tags on products as customers place them, or a shopping basket, in a designated bin. The POS monitor can then display the product’s size, color and price. The customer approves the purchase and provides a payment method, completing the transaction within seconds. The company uses the technology not only for purchasing but also for inventory management, Kay says, but its use at the point of sale may help to pioneer more RFID deployments that will provide seamless, automated checkout for consumers.
Another pivotal development in RFID’s evolution with retail, Kay says, was Walmart‘s decision this year to begin using RFID to track all home goods and many consumer electronics, as well as sporting goods and toys. That led to similar decisions throughout the industry (see Macy’s to RFID-Tag 100 Percent of Items, Platt Retail Institute Finds RFID-Based Inventory Accuracy, Sales and Satisfaction Gains at Macy’s and Retailer Mandates Are Like Dominoes).
Growth and Setbacks Like Patent Litigation
Kay has seen the technology through setbacks, the biggest of which involved Round Rock Research’s patent litigation from 2011 to 2013. The patent troll’s lawsuits caused a significant slowdown in RFID rollout activity (see Round Rock Completes Licensing Deals With Majority of RFID Vendors, Update on the Round Rock Patent-Infringement Lawsuit and Motorola Solutions, Smartrac Settle Patent Litigation by Round Rock).
Throughout his career, Kay has written about RFID for numerous publications, including RFID Journal (see Closing the RFID Knowledge Gap in Apparel and Footwear and Missing: Specialty Apparel Retailers), and he composed his first article for this publication in 2004 (see Take RFID Away From the CIO). By 2005, Kay was contributing to other publications as well, sharing observations with the broader retail community, in addition to providing presentations at conferences. “I have always loved writing,” he states. He’s especially proud of the annual “state of the union” reports he cowrote with JP Kamel for Apparel Magazine for more than a decade, until that publication merged with RIS News in 2019.
As a consultant for retailers, Kay says, he enjoys the broad variety of assignments on which he embarks. “In the morning, I could be meeting with the CEO of a specialty apparel retailer and discussing an RFID rollout to their fleet of stores,” he states. “Later in the day, I could be working on ROI analysis for a consumer electronics retailer.” The next day could see Kay performing analysis for a private equity firm or conducting research for an upcoming presentation. “Every week is different, and that keeps me on my toes.”
Kay hopes to be remembered as someone who became a trusted partner to many of the world’s most popular brands and retailers, and he hopes to have raised the profile of RFID within mainstream retail media. Throughout the past 20 years, he has played a key role in the evolution of retail RFID ROI models, by ensuring that the models accounted for increased full price sell-through, and not merely the number of extra units sold.
Ultimately, Kay says, RFID technology is a tool that can help to ensure success for retailers, and that is his primary focus. Although he is passionate about RFID’s role in improving retail experiences, he’s quick to point out that he’s not a zealot. “At heart,” Kay explains, “I’m a retail consultant who happens to know a lot about RFID.”
Key Takeaways
- Consultant Marshall Kay has made a career out of understanding retailer challenges and the RFID tools available to address them.
- Kay sees a growing diversity in RFID technology use cases and benefits.