retail news in context, analysis with attitude

The New York Times this morning reports on the growth of radio-frequency identification (RFID) technology, which is being utilized in specific tests -- conducted by Tesco and Gillette in the UK, and Procter & Gamble and Wal-Mart in Oklahoma, for example -- to deal with issues of both security and product movement.

RFID, according to the NYT, allows companies to tag “clothes, drugs, auto parts, copy machines and even mail with chips laden with information about content, origin and destination. They are also equipping shelves, doors and walls with sensors that can record that data when the products are near. ‘We want to track all of our merchandise, and that includes items that people are unlikely to steal,’” William C. Wertz, a spokesman for Wal-Mart, told the NYT.

The paper cites one test at the Gap, where use of RFID helped sales because the company was able to keep from running out of popular items.

The only thing keeping the tags from becoming ubiquitous is cost. Currently they cost roughly 30 cents apiece, but when they get down to a nickel or less, the industry and consumers can expect to see the technology explode, especially once product tags are as universally readable as bar codes.
KC's View:
The only downside to this that we (and others) see is the consumer privacy issue.

How will industry convince consumers that once the product goes out the door, it no longer will be tracked? Or that if it is tracked, it will be for reasons that help, not hurt, the consumer?

Good piece. And worth reading over at www.nytimes.com. (Free registration required.)