Consumer Attitudes toward RFID Usage

Introduction

The term RFID refers to radio frequency identification and describes transponders or tags that are attached to animate or inanimate objects and are automatically read by a network infrastructure or networked reading devices. Current solutions such as optical character recognition (OCR), bar codes, or smart card systems require manual data entry, scanning, or readout along the supply chain. These procedures are costly, time-consuming, and inaccurate. RFID systems are seen as a potential solution to these constraints, by allowing non-line-of-sight reception of the coded data. Identification codes are stored on a tag that consists of a microchip and an attached antenna. Once the tag is within the reception area of a reader, the information is transmitted. A connected database is then able to decode the identification code and identify the object. Such network infrastructures should be able to capture, store, and deliver large amounts of data robustly and efficiently (Scharfeld, 2001).

The applications of RFID in use today can be sorted into two groups of products:

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  The first group of products uses the RFID technology as a central feature. Examples are security and access control, vehicle immobilization systems, and highway toll passes (Inaba & Schuster, 2005). Future applications include rechargeable public transport tickets, implants holding critical medical data, or dog tags (Böhmer, Brück, & Rees, 2005).

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  The second group of products consists of those goods merely tagged with an RFID label instead of a bar code. Here, the tag simply substitutes the bar code as a carrier of product information for identification purposes. This seems sensible, as RFID tags display a number of characteristics that allow for faster, easier, more reliable, and superior identification.

Once consumers are able to buy RFID tagged products, their attitude toward such tags is of central importance. Consumer acceptance of RFID tags may have severe consequences for all companies tagging their products with RFID.

Background

While consumers constitute the final stage in all supply chains, their attitude toward RFID has hardly been considered. Previous studies have mainly dealt with RFID as an innovation to enhance the supply chain and the resulting costs and benefits for companies along the value chain, that is, suppliers, manufacturers, retailers, and third-party logistics (3PLs) providers (Metro Group, 2004; Strassner, Plenge, & Stroh, 2005).

Until now, few studies have explicitly considered the consumer’s point-of-view (Capgemini, 2004, 2005; Günther & Spiekermann, 2005; Juban & Wyld, 2004), and some studies merely present descriptive statistics (Capgemini, 2004, 2005). The remaining few analyzed very specific aspects such as consumer fears concerning data protection and security (Günther & Spiekermann, 2005). Nevertheless, initial results indicate a strong need to educate consumers about RFID. Although consumers seem to know little about this new technology, pronounced expectations and fears already exist in their minds (Günther & Spiekermann, 2005). Therefore, future usage of RFID in or on consumer goods will be strongly influenced by their general acceptance of, and attitude toward, RFID.