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RFID Transforms Customer Service, Retailing and Consumer Goods
By Peter Harrop, Chairman, IDTechEx 2010/9/29

First time round, it ended in tears. Six years ago, some of the consumer goods companies and some of the retailers they supplied said that billions of RFID tags would shortly be applied to pallets and cases. However, it transpired that this was tricky to do at the UHF frequency chosen and, although the RFID suppliers and consumer goods companies lost several hundreds of millions of dollars trying to make it happen, it only benefitted the retailers. And the retailers were very reluctant to invest much money or even staff training into the opportunity. Fast forward to today and only a modest number of pallets and cases are tagged but, at last, a price rise for the tags has stuck and the RFID tag makers can see losses reducing even if major sales remain elusive. The system integrators have made a little money on the enterprise throughout. First time round, it ended in tears. Six years ago, some of the consumer goods companies and some of the retailers they supplied said that billions of RFID tags would shortly be applied to pallets and cases. However, it transpired that this was tricky to do at the UHF frequency chosen and, although the RFID suppliers and consumer goods companies lost several hundreds of millions of dollars trying to make it happen, it only benefitted the retailers. And the retailers were very reluctant to invest much money or even staff training into the opportunity. Fast forward to today and only a modest number of pallets and cases are tagged but, at last, a price rise for the tags has stuck and the RFID tag makers can see losses reducing even if major sales remain elusive. The system integrators have made a little money on the enterprise throughout.

As with many false starts in industry, this has led to a generalization that RFID is of no use in that sector. However RFID is now being adopted very rapidly for retailing, consumer goods and customer service. It is just that it is happening in a completely different manner, tagging items, using RFID-enabled mobile phones and RFID cards for payment, improving the consumer experience in other ways and reducing crime. This is a global phenomenon: for example, INSIS in Argentina analyses such progress in Central and South America.

Tagging the items themselves benefits everyone in the value chain so even jewelry, artificial fire logs and knives are being tagged before appearing on the shelves. Most dramatically, about 100 retail chains have apparel tagged at manufacture, including full-range general supermarkets. The business case is so clear and compelling that the number continues to rise rapidly and the result is better stock control particularly reducing the number of stockouts. Imaginatively used, it is also providing many secondary benefits such as recommending accessories using a "magic mirror." Watch Gerry Weber in Germany and NP Collection in Finland to see what the more enterprising retailers are achieving.

NXP is a RFID chip supplier for this sector and most others. Avery Dennison is the RFID tag supplier to consumer goods and retailing applications by offering the UHF labels required, though it also offers HF inlays to the favorite RFID frequency HF (13.56 MHz). RedBite Solutions and Sony Supply Chain Solutions are progressing RFID systems from factory to shelf that join up the dots. Indeed, Savi has made a huge success of applying RFID to heavy logistics such as intermodal containers using 433 MHz active tags.

Active RFID is a fast growing sector of the US$5.63 billion global RFID market analyzed in the IDTechEx report "RFID Forecasts, Players, Opportunities 2011-2021". This market will grow about four times in value in the next years according to IDTechEx, which forecast the recession proof five times growth of the RFID market over the last ten years. Part of that is three billion apparel tags being fitted in 2015 for example.

CETEMSSA in Spain is using similar RFID approaches for both consumer goods and health care. Of course, for the lower-priced items, lower-cost RFID is needed but help is at hand from Sunchon National University, EXAX and WCU in South Korea replacing the silicon chip with entirely printed RFID. There is now even RFID combined with holograms to provide potent anticounterfeiting of valuable items thanks to a new invention from Optaglio of the Czech Republic. Indeed, RFID to GS1 standards can subsume the antitheft function and make shrinkage a thing of the past.

RFID-enabled phones are at last becoming available beyond the forty million plus in action in Japan. The global Near Field Communication NFC standards at HF let such phones act as passive or active RFID tags and even as RFID readers. NFC is being used for mobile payments at centre Pompidou’s Teen Gallery. Twinlinx is progressing this type of application. In due course there could be more than one billion mobile phones supplied yearly with this capability as standard, subsuming city car, financial card and other functionality. People using a mobile phone instead of a computer, wristwatch, alarm clock, video game will also use it in place of cards.

sQuid is an independent eMoney network that enables consumers to safely and securely preload money on to a sQuid account, which can then be used to make contactless payment for the little things in life, instead of using cash. sQuid’s prepay application enables cashless payments for many different functions such as eMoney for retail payments, ITSO (Transit) schemes, Council card initiatives (such as Bolton’s BSmart), school cashless catering, campus environments and retail loyalty programs.

It is realized that RFID can improve customer service beyond making it more likely that what you want is in stock. This applies in retailing and also in the hospitality industry where RTP in the U.S. is creating a new customer experience using RFID. Queralt and Cypak are improving health care customer services with RFID and Guide Dogs for the Blind in the U.K. is using RFID to help the blind to go shopping. Helsinki Metropolia University of Applied Sciences in Finland is perfecting RFID for people flow management. Cambridgeshire County Council in the U.K. has an adoption of RFID for library management that customers appreciate.

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