business news in context, analysis with attitude

Content Guy’s Note: Each Monday, we are featuring an article previewing some aspect of the annual Food Marketing Institute (FMI) show, scheduled for May 4-6 in Chicago.

One of the more interesting booths at the year’s Food Marketing Institute (FMI) show in Chicago should be the Auto-ID Center exhibit, which will give attendees a hands-on experience with emerging technologies that will reshape the retailing business.

To get a sense of what attendees can expect from this exhibit, MNB conducted an exclusive e-interview with Ted Mason, FMI’s director, EPS Network Services & Emerging Technologies.

MNB: What’s going to be featured at the Auto-ID Center exhibit at FMI in Chicago?

Ted Mason: Under the Auto-ID Center at MIT banner, the booth will present technologies capable of supporting the lab's vision of EPC implementation at the pallet, case, and item levels. Show attendees are encouraged to come and "play with an EPC" and experience how the technology might be applicable within their operations. Matrics, Checkpoint, Tyco/ADT/Sensormatic, and Accenture will be demonstrating their respective technologies.

MNB: What is your sense of how much education retailers and manufacturers need on this issue?

Ted Mason: I must preface the response below with just what FMI's role regarding the EPC is. FMI has been providing the industry education about the EPC technology for three years. Generally, those members participate with FMI events featuring the technology have an awareness of the EPC and are now moving to understand its actual application. Just as with many other emerging technologies, articles and presentations about the EPC may provide an awareness of the technology. New technologies often require hands-on demonstrations for users to fully understand their capabilities. For example, the FMI I/T Committee has become well informed about the EPC, but a site visit where they actually interacted with the technology was perhaps a turning point in their embracing the operational possibilities the EPC. The committee has released a white paper containing their first thoughts on how the EPC may provide benefits to the warehousing operations of the food industry.

While operators of various sizes have been actively investigating the EPC, there is a need for wholesalers and independent operators to further their understanding of the technology. FMI is providing information to them through the Independent Operators Division headed by Michael Sansolo. A few FMI members have joined the Auto-ID Center and perhaps wholesalers will examine the possibility of participating with the lab on behalf of the markets they serve.

MNB: During the past few weeks, Benetton announced that it was backing off RFID for the moment, while Marks & Spencer is moving ahead. What’s the implication of these two announcements, and what do they mean for the food industry?

Ted Mason: The expanding number of companies establishing pilot programs speaks for itself in demonstrating there is great potential for the technology. At this early stage of pilot programs, however, there is still much to learn. Judging the expected benefits of the EPC for retailers and consumers solely on a limited number of early pilot programs is premature. New technologies succeed or fail based upon the level of benefits delivered to all stakeholders. Were the early Internet-based banks and banking programs successful? Not entirely, yet their experience paved the way for today's expanding use of Internet banking and bill payment technology. Each new EPC pilot program offers the same learning opportunity for refining the value proposition for retailers and, ultimately, for the consumers they serve.

MNB: Give us an update on where the industry is in terms of pilot programs, and what the prognosis is for implementation.

Ted Mason: End user and technology-vendor members of the Auto-ID Center have been moving forward with pilot programs and are on schedule with the lab's original timeline. From pallet, case and item pilots, several lab members are applying EPC technology to specific needs within their organizations. One company is piloting the use of the EPC in tracking DVD players within their distribution system while another is tracking prescription drugs from bulk to individual patient containers. One supermarket operator is currently participating in a pilot program testing the capabilities of the EPC system to deliver real-time product movement from "smart" retail shelves directly to the manufacturer to better aid replenishment.

MNB: Privacy concerns continue to be voiced from some sectors. How difficult is it going to be top assuage this segment of the consumer population?

Ted Mason: The industry is quite sensitive to privacy concerns and we are exploring solutions. One possible answer is to give consumers the option of deactivating the EPC microchip once the product leaves the store. As with the data gathered in frequent shopper programs, we can limit access or allow consumers to control the information collected and shared. We can gather the information only at the aggregate rather than personal level. As the technology is introduced, we will work closely with consumers to earn this trust that it will not compromise their privacy.
KC's View: