And you thought your biggest worry was online spyware.
Researchers at IBM have created a “smart” shopping cart which contains an interactive screen and scanner. If a shopper is part of a store’s loyalty system, the cart can provide a shopping list based upon her prior purchase. It can recommend items that are on sale. And it might contain a localized GPS system to show the route to a particular product in the store.
Reported by the Australian New Age, the cart is only one technology being tested, ostensibly to enhance the retail experience.
Other technologies can help retailers track individual product units through the supply chain. This week, Wal-Mart has told its suppliers that they must use radio frequency identification (RFID) on cases and pallets by 2005.
Also this week, the US Department of Defense (DOD) Monday established its official RFID policy. The policy, effective January 2005, requires all suppliers to use passive RFID tags on the lowest possible level of packaging — per part or item, per case, or per pallet. DOD has already used RFID wristbands on patients in the Iraq conflict.
Profit is the driver
RFID technology promises to make the supply chain more efficient, which should reduce costs, thereby raising profits. That’s why global firms like DHL Worldwide Express are interested. The firm handles 160 million packages a year; this technology can inventory packages inside passing cargo containers at the rate of 300 items per second.
One analysis suggestst that Wal-Mart, the world’s largest retailer, could save up to $8.35 billion per year; that is more than the total annual revenue of half the companies on the Fortune 500.
Action has been faster in Europe than in the U.S., especially when looking at retail applications. Marks & Spencer tracks gourmet take-home foods with RFID tags which are embedded in 3.5 million food trays and dollies. The company says it has reduced employee hands-on time 80%. The investment is substantial, but advocates for the technology talk about payback in one-two years.
Last month, Marks & Spencer was testing RFID tags on men’s clothing. The tags were contained in a disposable paper label, Intelligent Labels, attached to a selection of men’s suits, shirts, and ties. The label is designed to be cut off and thrown away after purchase.
Privacy may be the brake
If this makes your privacy bones shudder, you’re not alone. Consumers Against Supermarket Privacy Invasion and Numbering (CASPIAN) has proposed legislation, The RFID Right to Know Act of 2003, to require mandatory labeling when an item contains an RFID tag. It would also prohibit companies from linking the chips with personally identifying information (like the smart cart, above).
On an individual product, RFID is like a bar-code on steriods. For example, All Gillette Mach 3 razor blades have the same bar code. But with RFID tags, each packet of Mach 3 blades could have a unique Electronic Product Code (EPC) embedded in a very tiny microchip, complete with radio transmitter.
CASPIAN has developed a “Boycott Gillette” web site to protest the use of RFID tags on individual razor packages. The chips can trigger a hidden camera to snap a photo when somone takes a package off the shelf; another snap can occur at checkout.
In the UK, supermarket chain Tesco tested RFID tags with this capability to prevent shoplifting; the result was consumer protests.
In the US, retail giant Wal-Mart cancelled a trial of Gillette’s smart shelf system that was slated for an outlet in a Boston suburb; the company said it wanted to focus on warehouse and distribution applications.
Benetton is another manufacturer that has squashed RFID testing after public announcements.
Time quoted futurist Paul Saffo: “Privacy mavens are going to wring their hands over this, and I’m sympathetic, but RFID is too good to stop.”
Who’s behind this research? None other than MIT, in a consortium with four other research universities and about 100 global firms; for more info, see the AutoID Center web site.
Or reliability may be the brake
Some analysts suggest that the technology is not ready for prime-time, both in terms of cost and reliability when compared with UPC codes. Moreover, the benefits do not accrue until there is both in-stock and out-stock tracking.