RFID has the potential to provide customers with more product information than ever. But a new report claims that food manufacturers and retailers will have to be careful that the technology is not used against them, writes Anthony Fletcher.
The paper, published this week by Wireless Healthcare , identifies a number of customer services, such as dietary guidance and food allergy alerts, that could use RFID tags. These services, which would employ mobile devices fitted with RFID scanners to provide information relating products on sale in stores, could be run over conventional mobile networks.
The Cambridge based consultancy believes that RFID technology can therefore be used to open up a product to a range of on-line services.But manufacturers will not want third parties overlaying alternative databases over their business. Some of the services provided by other organisations might be relatively benign but others, such as ethical shopping services and Kelkoo-type price comparators, could disrupt the manufacturer's business model.
The paper concludes that retailers will be faced with three choices.Firstly, they could abandon deployment of RFID technology in customer facing applications and deactivate tags when products are placed in their stores.
Alternatively they could use blocking tags, such as those recently demonstrated by RSA, to prevent third parties accessing RFID data. However, this could prove controversial if those third parties were providing dietary information and allergy alert services.
Finally, stores could build their own information services by migrating existing, barcode scanning based, automated shopping applications to an RFID platform. Once in place, these services could be enhanced by adding functions giving the customer access to these features via aconventional mobile handset or wireless PDA.
In any case, RFID appears to be here to stay. In an international study undertaken by IT consultancy LogicaCMG, the majority of the companies interviewed in the Netherlands, UK, Ireland, Germany, France and Belgium, gave RFID top priority in terms of planned IT investment. The study shows that half of the 50 companies interviewed in Europe have or are planning to deploy RFID pilot projects throughout 2004, with the vast majority planning to start implementing the technology within the next three years.
"The research shows that we are on the threshold of a breakthrough of RFID technology in the European market," said Paul Stam de Jonge, director sales and marketing at LogicaCMG.
RFID technology is based on a relatively simple concept. It consists of two elements that communicate through radio transmission - a tag and a reader. The tag contains a small chip and an antenna and can be placed on any object. The information on the tag, such as an identification number, can be transmitted to an RFID reader over a distance of a few metres.
The readers are placed in various locations throughout the supply chain. RFID allows objects to be electronically identified and followed throughout the complete distribution chain.