CFVG HCMC MBA 22

Management Information System

RFID solutions in supermarket

Lecturer: Dr. Nguyen Hoang Vu

Members: Nguyen Thi Phuong Thao

Thai Bao Ngoc

Tran Du Hoa Binh

Tran Thi Bich Lien

Tran Thi Lan Chi

Tran Van Hien

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Table of Contents
1. Problem statement ............................................................................................................. 3
Customers ......................................................................................................................... 3
Supermarkets..................................................................................................................... 3
2. Proposed solutions & products ............................................................................................. 4
RFID – technical specifications .............................................................................................. 4
Offered products ................................................................................................................ 5
Benefits............................................................................................................................. 6
3. Financial feasibility & funding ............................................................................................... 6
Fixed cost .......................................................................................................................... 6
Variable cost ...................................................................................................................... 6
Sample customer – BigC Vietnam.......................................................................................... 6
4. Potential markets & customer approach ................................................................................ 7
Potential market................................................................................................................. 7
Marketing strategy.............................................................................................................. 7

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1. Problem statement
C ust omers
- Long time spending at supermarket
o Very long queue of customers waiting at cashiers, especially on weekend or year-end season
o Every cashier needs to take more time on each customer to check items and collect money
o Wasting time at supermarket for daily products is major concern, especially for office
employees
- It takes time and difficult to find a specific product within the long/narrow alse (though
supermarkets already support with overhead instruction tables) -> confuse or miss product
information needed.
- Have to manually calculate total amount of products while shopping

Superma rket s
- Low customer’s shopping experience, leads to loss of customer to online/smaller local shops, where
customers don’t have to wait
- High labor cost for check-out process
- Difficult to manage product on shelves, extensive effort to manually check shelf stock by end of day
- Difficult to manage the inventory & supply chain systems

Therefore, it takes time when shopping at current supermarkets in Vietnam while in the modern life;
people tend to have fewer and few time. How can we resolve this problem within the time limit is to
answer these big questions:
- How to maximize customers experience at supermarkets?
- How to minimize waiting time at cashiers in supermarkets?
- How to serve each customer with less labor cost?
- How to manage the merchandise in/out precisely and effectively?

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2. Proposed solutions & products
RFID – technical specifications
- RFID (Radio Frequency Identification) is a wireless technology allows real-time tracking of objects.
- Most RFID tags consist of a silicon microchip attached to an antenna. The tag is mounted on a
substrate, which is then embedded in or attached to an object.

Figure 1 – RFID passive tag - Courtesy of

www.rfidconsultants.com

RFID could be used for following purposes:

- Warehouse tracking: by use of RFID tags attached on each items, and RFID readers located across
warehouse, supermarket manager could check information of products on shelves at any time.
- Speed up checkout process: all items in a specific customer’s shopping cart could be checked out
instantly when they get to checkout toll, instead of traditional method of scanning each item
individually.
- Customers could have small RFID reader on shopping carts to check while they are shopping, more
detail information of a product as well as total amount they’ve picked.

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 Figure 2 – RFID application in business process - Courtesy of SkyeTec Inc.

Offered products

Figure 3 – RFID infrastructure - Courtesy of www.bakulan.info

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Supermarket checkout & payment
- RFID readers: used to read information from RFID tags attached goods
- RFID passive tag: attached to each item, contains information of that item
- Management software and application server: checkout & payment (POS)
- Trolley/shopping carts equipped with small, low range RFID readers to read information from
current items in cart

Warehouse & asset management

- RFID readers: used to read information from RFID tags attached on each item
- RFID passive tag: attached to each item, contains information of that item
- Management software and application server

Benefits
- Increase customer satisfaction: Faster checkout time (~30 seconds per customer)
- Reduce cost:
o No cashier at check out
o No inventory counter
o Improve management efficiency: real time store management
- Catch market niche: more customers, especially busy people could visit supermarket

3. Financial feasibility & funding

Fixed cost
- Hardware & Control Software: $20,000

Va ria ble cost

- RFID readers: 700$/reader
- Passive RFID tag: ~0.5-1 US cent/tag
- Labor cost to attach RFID tag & maintain infrastructure

Sample customer – B ig C Vietnam

Unit price of a mass production - passive RFID tag is 0.5 U.S. cent.
Unit price of a RFID reader is around 700$, for use with 100 sq. meter coverage
Total area of BigC Vietnam is approximately 260,000 sq. meters
 Around 2,600 readers, require initial investment of approximately 2,000,000 USD.
Annual revenue of BigC Vietnam is approximately of 400,000,000 USD. This investment takes
0.5% of revenue.

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4. Potential markets & customer approach
Potential ma rket
- From above analyst, the use of RFID technology to:
o Provide visibility in the supply chain and production line.
o Maximize customer experience
o Verify plant maintenance
- Application of RFID can be used in the following markets:
o Retail and consumer goods are the main market, which are also the largest market in term
of volume for RFID tags
o The postal & express market provides the most potential. The application can be applied for
returnable transportation products, parcels and mail.
o There are also some niche markets such as library books management, pharmaceutical and
healthcare, agriculture product tracking, etc..
- Target customers in Vietnam market: hypermarket and supermarket such as Metro (which was
deployed RFID in European market), BigC, Coopmart, Lotte mart, etc…

Marketing strat eg y

PRODUCT PRICE
Advanced technology Skimming price strategy
Unique features Offer payment term base on progress
Support set up RFID system
Total care service
PLACE PROMOTION
Direct sale method with advance technical and Exhibitions and conferences
initial investment consultant Website and internet marketing