When one of the U.K.’s largest retailers, Asda, tried out radio frequency identification with its German music supplier, it wasn’t impressed enough with the glitch-prone technology to take it any further.
Not so for the U.K. supermarket chain Tesco plc, which is currently putting in place a major RFID system and looking forward to the day when it will know, thanks to tiny RFID chips in its food packaging, when a certain product’s sell-by date is approaching.
The jury on radio bar codes, as they’re known in the U.K., is still out — and will be for a while. Indeed, the largest supermarket retailers here are divided over the benefits of RFID. Tesco and Marks & Spencer plc are major proponents of the system, while Asda and J. Sainsbury plc are not clearly convinced about its benefits to the consumer.
In the U.K., unlike the U.S., there appear to be no real privacy or security issues among the big supermarket groups with regard to RFID. The core issue appears to be whether radio bar codes can bring added value to a supermarket’s products.
“This technology will change the way we run our stores and supply chain, delivering major benefits for both consumers and staff,” said Philip Clarke, international and information technology director at Tesco.
Tesco is one of the U.K.’s biggest advocates of the radio bar code system, and as Britain’s largest food retailer, it can have a significant influence on whether vendors adopt the system. Early last year the retailer began its first pilot test, tracking deliveries from its non-food distribution center at Milton Keynes to two Tesco stores.
The trial follows smaller, item-level tests on Gillette Mach 3 razor blades and DVDs, which will continue into early next year. Tesco is currently asking its suppliers to start their own research and development activities. The chain plans to have fully completed its radio bar coding project by 2007.
One area where Tesco is looking to improve its supply chain is with entertainment products. The chain is working with its supplier Entertainment UK and the packaging company MeadWestvaco to test the use of RFID technology to track DVDs in its stores.
When a DVD is removed from a shelf, a message is sent back to a central computer. Eventually, thanks to the RFID system, staff will have an X-ray view of the stock on the shelves. For the consumer, gone will be the days of finding “The Sopranos” DVDs mistakenly put on the same shelf as “Shrek.”
“There are hundreds of different DVD lines, and they often end up in the wrong place, and it’s frustrating for customers if they can’t find the title they want,” said Tesco IT director Colin Cobain. “The radio bar codes will save staff a lot of time. They can easily see if items are in the wrong place, and how many of each type are on the shelf.
“The possibilities of RFID are endless” he added. “In the future, when a customer selects a title, a trailer could even play on a plasma screen.” Cobain foresees a day when RFID devices will be embedded in food packaging in order to alert the store to approaching sell-by dates.
M&S, which owns its supply chain and is funding 100 percent of its RFID project, is another big fan of tagging. The chain conducted its first tests on take-out food in fall 2002, and it plans to have between 3.5 million and 4 million electronically tagged food delivery trays by the end of 2004.
An M&S spokeswoman said the new system allows staff and suppliers to read stock information six times faster than normal, leading to less spoilage, more time to produce the meals, and even later dispatch times.
In October and November of last year, the company extended the trial to men’s suits. The supplier attached RFID tags to the suits inside paper labels. When the suits reached M&S’s distribution center, they were scanned. The retailer was able to take inventory quickly in the distribution center and the store. The scanned information was transmitted to the central stock database, where it was automatically compared with the existing stock profile to trigger a replenishment order.
If the system is put into production, the paper labels will be printed with the words “Intelligent Label for Stock Control.”
The M&S spokeswoman stressed that the electronic label was not, and would never be, scanned at checkout and was in no way linked to the customer’s payment details. After the purchase, the customer can cut off the label. Furthermore, merchandise can be returned to the store without the intelligent label. M&S is conducting further tests, which will be completed in June, to monitor the hoped-for improvements to stock availability. The levels of product availability and sales in the trial stores will be compared with those in a statistically correlated group of stores.
In the meantime, there are a number of RFID issues to be ironed out, including the practicality of the scanners and monitors. M&S is testing scanners that can operate at a distance of up to half a meter (less than two yards) and can read tags simultaneously.
“Each evening a member of staff would go around with the scanner, instead of manually taking stock or scanning bar codes. But there’s no such thing as a truly ‘mobile’ scanner,” the spokeswoman said with a laugh. “They are heavy and cumbersome and difficult to cart around. So we changed the wheels and made the screen smaller, but we still need to make improvements.”
With regard to RFID, M&S’s goal is for 100 percent stock accuracy, giving customers better availability of the merchandise they want, she said.
Unlike Tesco and M&S, some other big chains are taking a more cautious approach — or making no plans at all. An Asda spokeswoman said the company’s 2002 experiment with CDs was simply a test.
“It was only meant to be a trial, and we never planned to take it further,” she said. “It was an interesting learning experience, but there was never a plan to roll out an RFID system. It was more to learn about the new technology out there.”
While she would not comment further, others at Asda said there were practical limitations to the test. Readings were different depending on whether the chip was placed on the front or the side of the CD. For example, sometimes an entire box of CDs would register as just one CD, while other times the reading would be accurate.
Meanwhile, Asda’s competitor Sainsbury’s is still undecided about how to proceed.
“We trialed RFID a couple of years ago, but we found that the market was not mature enough, there was no real clarity regarding standards and there were no proven systems in place,” said a spokeswoman. “That said, we will be looking again at RFID in the future.”