RFID Revolution Not Here Yet

Discussion
Aug 09, 2006
George Anderson

By George Anderson


A recent report in The Dallas Morning News said proponents of radio frequency identification (RFID) have made claims that the technology would make many daily activities easier for consumers.


While milk cartons with RFID tags that alert a household when it’s time to replenish are not here yet, there are some instances where the technology has consumer applications, such as Mobil’s Speedpass and EZ-Pass toll systems.


For now, however, most current use of RFID is tied to large organization supply chain needs.


That, say experts, will change.


Julie England, general manager of the RFID division at Texas Instruments, said. “The consumer over time is going to experience more and more the convenience of RF-enabled devices in their daily lives. We’re on that path. There are no major roadblocks, but there are some hurdles to get over.”


Diana Hage, who heads up the RFID division at IBM, sees a number of consumer applications for RFID being ready in the not-too-distant future.


She cited McCarran International Airport in Las Vegas for tagging luggage with RFID tags.


Samuel Ingalls, assistant director of aviation, information systems, at McCarran, said consumers will get it. “If this has the capability to enhance the chance that my bag arrives when I do, they can really grasp the benefit of it.” 


Discussion Questions: Where do you see consumer applications for RFID becoming common in the future? What will that mean for retailers?

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10 Comments on "RFID Revolution Not Here Yet"


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William Dupre
Guest
14 years 6 months ago

Using expensive technology to track shopper patterns through the store is a waste of money. In the early 90’s, VideOcart tracked millions of shopping trips and no one was interested in purchasing the data (marketed by IRI). If a brand manager is tracking real-time shopper movements in the aisle, the only outcome is certainly being fired by his boss, also looking at the data. It’s not actionable. If no one is shopping the aisle, there is nothing that can be done to change the shopping behavior in real-time. This is like tracking market share data by the hour. If this data had real value, the IRIs, NPDs or VNUs of the world would be all over it.

Item level tracking using RFID is not in the future. Do you really think you can change the basic rules of physics, water and metal refraction and diffusion? Something will happen but it won’t be RF.

Herb Sorensen
Guest
14 years 6 months ago
If you look at the “ID” aspect of RFID, you can generalize applications to uses of identification technology, and more importantly, to relationships among identified entities: people, items, locations, etc. For example, EZ Pass relates the ID of a vehicle to a point of passage to an amount of money; and creates a transaction based on those relations. In the near term, this kind of replacement application will lead the way for introduction of RFID – simply doing something we have been doing all along, but in a more efficient manner. This is what happened 30 years ago with scanning technology, which made its way through the retail world with a lot of promise, but really only implemented as a replacement for totaling up the shopper’s payment at checkout (relating the shopper – transitory ID – to the items they were purchasing and the amount to collect from them.) But look at where this has gone in terms of “relationship marketing,” with loyalty cards and all that has followed. Today, 30+ years later, using scanning… Read more »
Matt Werhner
Guest
Matt Werhner
14 years 6 months ago

If retailers want to start embracing this, they should start with accepting contactless payments. This seems to be the fastest growing consumer application for RFID at the present time. That said, the number of consumers currently holding contactless cards is not impressive; however, I still believe that this RFID application has the potential for explosive growth.

Mark Lilien
Guest
14 years 6 months ago

People don’t need RFID to tell them they need milk. If RFID improves in-stock positions at retailers, there will be fewer wasted shopping trips. If RFID was universally applied to high-value frequently stolen items, such as cars and laptops, it might be appreciated. If it was miniaturized and applied to high-value jewelry, people would buy it. Most RFID applications are best for businesses, not individuals.

Ron Margulis
Guest
14 years 6 months ago

Within the next three to five years, RFID will be deployed broadly for fraud prevention and warranty/maintenance activities on high priced ($500 +) items. Hi-fashion handbags will have tags embedded in them so companies can track them to ensure legitimate sales and 50-inch plasma TVs will have tags to provide data for service professionals. This kind of item level tracking will help retailers deliver better customer service by making returns and repairs easier and by proving that products are genuine. Costs should ultimately be reduced as well, leaving the privacy issue as the biggest challenge for retailers to address. And, as companies tag items at lower prices five to 10 years from now, privacy will no doubt have to be addressed. Best to start now.

Kenneth A. Grady
Guest
Kenneth A. Grady
14 years 6 months ago

The RFID concept will infiltrate consumers’ lives as prices come down and useful applications of the technology are developed. Right now, it is mostly in its geeky phase (applications that are done “because we can”), with the exception of some of the contactless payment options.

I agree, at least for the foreseeable future, that most applications will be for businesses rather than consumers. Tracking luggage and other high value items can be useful. Speed payments are a convenience. Niche applications like tracking book, CD or DVD collections may come into play. Consumers will be a bit more reluctant to use RFID because of privacy concerns and a slower curve to understand the real benefits to them of the technology.

Mark Heckman
Guest
14 years 6 months ago

RFID is making a difference subtly on the consumer side of the business in a number of ways. Clearly, one could argue that any progress made with RFID on the supply side that promotes better variety, in-stock conditions, and more timely and relevant promotions is an indirect “win” for the consumer.

Moreover, as we utilize RFID technology to actual track shopper trips through the store, as is happening today for both brands and retailers, RFID can enable stores to be more consumer-centric in the way they both design and merchandise stores. As RFID becomes more economical and widespread in its presence, you will also begin to see the supply-side, (tracking of cases of product), connect to what happens to the product in the store, then connected to how the customer interacts with the product and category within the store.

Exciting times ahead!

Nikki Baird
Guest
Nikki Baird
14 years 6 months ago
I heard about the most fabulous application of RFID. It was a combination electronic article surveillance tag with a unique RFID identifier and a little green LED light on it. The tag was attached to jeans, and the display was a wall of jeans – you know, like you find at department stores all the time. To the left was a touch screen kiosk, where you selected the size you wanted, and then all the jeans with that size lit up the little green lights so that you could find them immediately in that massive wall of jeans. Now THAT is an application that would have tremendous value to a consumer. Where is it? In testing. There are some process issues in the way – like, how long do you keep one size flashing before you let a consumer enter another size? These kind of applications turn the whole concept on its head. Sure, consumers benefit when retailers don’t stock out of products, but that’s like saying that I benefit when my trash company picks… Read more »
Race Cowgill
Guest
Race Cowgill
14 years 6 months ago
None of the factors that most affect an organization’s efficiency, profitability, and growth have to do with technology, including RFID. The overall consumer experience in retail continues to be quite low, and none of the reasons for this have to do with the lack of technology, including RFID. Our data shows that every organization has a number of profound problems that it is not solving and that are responsible for over 80% of an organization’s poor performance; none of these problems can be solved by technology or by RFID. The above issues are very uncomfortable for organizations to face and address. This is why organizations look for simpler and “more interesting” issues to spend their attention on. These other issues are used as distractions because the big issues are so daunting and stubborn, and frankly, organizations do not know how to solve them (and so they often stop seeing them as problems). Technology has its value, but not nearly in proportion to the attention we give it and money we spend on it and time… Read more »
Laura Davis-Taylor
Guest
Laura Davis-Taylor
14 years 6 months ago
I agree with Nikki completely. There are many, many applications for RFID that can help create better shopping experiences for our legions of frustrated customers. No, the current problems don’t reside in a lack of technology. However, in some cases, they can be partially solved with creative technology applications. The critical issue with consumer-facing RFID applications is privacy. We already see the response to online cookies and, with the ability for RFID to be a physical cookie, we really need to pay attention to those learnings. Germany’s Metro Market Future Store was a sobering example of this. (See The METRO Extra “Future Store” – Spychips.com) What’s interesting about Nikki’s example is that it is an RFID application that can solve issues w/o personal ID intrusion. With applications like this, we have the ability to “teach” people with positive experiences that it can be a delightful tool. Testing these applications slowly for consumer response, and moving cautiously into more personally “connected” applications, certainly seems like a prudent move. Ditto on the other comment that we “have… Read more »
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