Despite the fuss, RFID, or Radio Frequency Identification tags look set to replace bar codes at the checkout. The problem is in convincing a nervous public that they are a beneficial technology.
An RFID tag comprises a microchip and a tiny antenna that transmits the data from the chip to a reader. The reader is activated whenever the antenna comes into range and the data can be used to ring up a purchase or trigger an event, such as opening a door. Usually the range is no more than a few feet.
In the Rheinberg store, loyalty cards and smart shopping trolleys guide customers to chip-enabled goods, using stored information on past shopping habits to point out special offers or the location of preferred products.
The products also communicate with the smart shelving on which they are located, indicating when more stock is needed, and with the checkout desk, speeding up the payment time.
The new technology should improve retail efficiency by making stock checks and payment easier. It also improves in-store security because the tags can be used to track a product.
But this is where the problem lies, because tracking is not necessarily something that a consumer wants, particularly after he or she has left the store.
Bennetton recently announced that it was going to introduce the technology in its clothes. Consumers Against Supermarket Privacy Invasion and Numbering (CASPIAN) promptly campaigned for a boycott of Bennetton. The Italian company back-peddled, saying it would first conduct a feasibility study into RFID technology.
But the privacy implications are real. Stores implementing the technology must consider whether or not they need to have activated chips within products once they have left the premises.
A major reason for keeping the chips active is to monitor returns – an occasionally necessary link in the retail supply chain. If chips are left active, consumers need to be told up-front about what is being done and why. They must be given the opportunity to opt out of this.
Meantime Metro and its partners are happy with the new technology. John Davies, Intel VP for solutions channels, and involved in the project, told Reuters, "This feels to me like a watershed." He added, "It's going to change the way retailers do their business and, over time, the way people shop.”
RFID technology and addressing the privacy fears is the subject of the Rob McCallough's Rough Diamond column in this month's free OUT-LAW Magazine.