RFID: Evolving Into an Enterprise Solution

New RFID innovations may open the door to broader-based RFID solutions in the retail and business sectors.

In the Retail Sector
* EAS. The first commercially available application of RFID was a solution called electronic article surveillance. The purpose of the solution was mainly theft deterrence; by attaching RF tags to merchandise and posting sensors at the door, store staff could be alerted when an unpurchased item was removed from the premises. The EAS systems, both components of which—tags and sensors—were highly visible, also alerted potential thieves to the presence of a security program and discouraged them from shoplifting. These systems have been proven effective in reducing shrinkage. Checkpoint and Sensormatic (now a unit of Tyco Fire & Security) were two of the first companies to enter the RF-EAS commercial market in the late 1960s, and they still lead in the market today.

Walking into some retail establishments, one may get the impression not much has changed since the '70s. Particularly in clothing stores, you may still see the clunky, beige EAS tags you've been accustomed to for years. If you're like me, you've at least once had the experience of buying a fancy coat or dress and driving home only to find that the clerk left that clunky tag on. And, if you're like me, you may actually have tried to remove it with household tools (hammers, specifically) rather than drive all the way back to the store, which resulted in either an irreparable tear in the garment or a permanent ink stain. Such situations exemplify some of the drawbacks of the older types of EAS systems.

The damage these tags may cause to merchandise is a concern for retailers, as is the tags' obtrusive appearance, which many argue discourages impulse buying. Though the larger tags prevent or discourage shoplifting because they are clearly visible, that quality also makes it easier for innovative thieves to thwart the system—some have been known to leave stores with armsful of merchandise stowed in aluminum-lined shopping bags, which interfere with the transmission between sensor and tag.

In vendors' attempts to shake the clunky-tag blues, they integrated thin RF circuits into small, disposable labels that can be attached to merchandise such as CDs and electronic equipment. Even the reusable tags have become smaller and more manageable, and are now sometimes imprinted with the retailer's logo to make them more attractive to the consumer. However, the real future of the RF-EAS tags may lie within the merchandise itself.

* Source Tagging. Manufacturers and retailers now collaborate in the practice of source tagging. Source tagging solutions allow RF circuits to be embedded into packaging or merchandise itself at the point of packaging or production. Proponents of source tagging say that it will further reduce shrinkage—more items will be able to be tagged, for one—and reduce the labor cost involved in tagging at the retail location. Also, because source tags are not attached to the outside of products, they don't interfere with packaging logos and graphics, thus theoretically increasing brand recognition for the manufacturer. However, some retailers, specifically those still using the less sensitive but effective microwave technology, are unwilling to invest in the RF equipment necessary to participate in source tagging. Source tagging is widespread among pharmaceuticals and packaged products now, but the apparel market isn't yet ready to embrace source tagging due in part to a higher degree of complexity in integrating the tags into the merchandise at the source.

* EPC. Another initiative that resembles source tagging but encompasses a wider scope of use is the electronic product code initiative. This is born of the idea that an RFID-based electronic product code (EPC) can eventually replace the traditional bar-code UPC markers, providing the capability to track full shipments in detail through their shipping routes. In its most advanced form, EPC, an initiative spearheaded by the Auto-ID Center, would begin with the source tagging of each product. When the products were packed to be shipped, a separate RFID tag could be attached to each palette. Readers positioned in loading docks at the plant and at shipping destinations would identify the products on the palettes and provide that information to a server that tracks them through their route. EPC would allow retailers to automatically load new inventory into their systems as it is checked in. It would also allow shippers to recall shipments that have been damaged or tampered with even before they reach their destination. In a futuristic sense, it would even allow customers to automate their checkout process—readers near the store's exit would pick up individual EPCs in a customer's cart and announce the total cost of the items, at which point the customer could simply swipe a credit card for that amount and leave the store.