The new age of RFID

Radio Frequency Identification (RFID) technology has been in use over the last three decades. It has allowed the retail sector to greatly improve stock control, and the logistics industry to authenticate and manage supply chains. As the technology has developed it has allowed more data to be included on the RFID tag itself, but also more data can be extrapolated from how it is used. Traditionally used in these sectors, its flexibility has meant that it is now being used in a host of other ways.

Among the claimed benefits are that it can reduce warehouse and labour costs, out-of-stock occurrences, theft and point-of-sale labour costs, whilst improving forecasting and planning and the customer experience. It is this improvement of the customer experience that has led to some of the most novel uses of the technology; such as in automatic interactive tours in art galleries and museums; where individuals’ experiences are tailored depending on the exhibits they are viewing. London’s ‘Oyster’ cards are now an established form of the technology in daily use, and Barclaycard’s contactless technology cards; which allow customers to pay for up to £15 of purchases by simply swiping their card over the payment point; have also been subjected to an increased awareness campaign.

Consumer demand for high-quality produce of traceable origin means there is great potential for using RFID for supply chain management in the food industry. The University of Wolverhampton is the coordinating partner in an EU-funded project to showcase the use of RFID in food traceability. 11 partners from six countries are involved in the project, which aims to demonstrate to companies in the food sector what is needed to implement RFID; in addition to new technology this often also includes new business processes, skills and management. The project also aims to provide new royalty-free RFID software, thus lowering the cost of implementation.

Security concerns

The American store giant Wal-Mart recently announced that it would be putting removable RFID tags on individual clothing items such as jeans and underwear. (Wall Street Journal, July 2010). This led to concerns that while the tags can be removed, they cannot be turned off; leading to potential exploitation. However, Scott Bradner; a senior figure in Internet governance and University Technology Security Officer at Harvard University; plays down the potential privacy fears of this development, saying: “the Wal-Mart announcement is not too bad since they claim that the RFID will be in tags not in the clothing itself.”

The majority of RFID tags used in the retail sector are removed upon purchase and hold no personal data. However the information they provide can help to build meaningful relationships with customers based on their individual behaviour and preferences. Customers feel more looked after and can benefit from not having to repeat the same information many times over. As a result, retailers are moving on from having a purely transactional relationship with their customers, to one that is more personalised and uniquely tailored to the demands of the individual.

The information that RFID tagging can provide about stock levels and customer preferences, or about product origin can prove invaluable to businesses. This information can in turn vastly improve customers’ experiences. The convenience and diversity of application of the technology means that it has an inarguable part to play in our future.