March 23, 2009
Basket-At-Once Scanning Still a Ways Away
By Tom Ryan
The technology is available and the costs
are reasonable (tag prices are close five to eight cents each) but it appears
that basket-at-once scanning is far from being adopted at retail.
The main problem is the lack of a logical and cost-effective way to get the
tags onto the products themselves.
Himanshu Bhatt, global solutions executive
and program director for IBM sensors and actuators, told Retail Customer
Experience, the bi-monthly trade publication, that a branded apparel
retailer, which does its own manufacturing and "have their own captive
supply chain," might be able to affix RFID tags as the last step in
the private label manufacturing process.
But stores selling multiple apparel brands
have the challenge of getting all those multiple suppliers tagging products
themselves. A multiple-brand apparel retailer could put on the tags themselves
but would lose all the benefits those tags provide down the supply chain.
That dilutes the overall value proposition in moving toward such RFID technology.
"In my estimation, it will be some
time before we see it," said Jason Goldberg, vice president of marketing
at retail design firm MTI. "Way before every product for sale in a
store is source-tagged, you’ll see some retailers manually tagging SKUs,
and the stores most likely to do it are niche specialty retailers that
won’t benefit from cart-at-once scanning."
Indeed, a much longer wait is expected for
supermarkets, which stand to benefit the most from basket-scanning technology.
The channel faces the challenge of not only affixing tags to thousands
of items, but RFID technology still has some problems reading multiple
items in tight spaces that are typical of a grocery shopping basket.
"The retail industry wants to utilize
the UHF/EPC technology because of the distance-reading characteristics,
but the laws of physics still keep the RFID world in check," Tom Napier,
who developed a successful RFID application to handle the check-in and
check-out of documents for a Canadian government agency, told Retail
Customer Experience. For instance, if you have two RFID-enabled credit
cards in your wallet, he said, neither one will work on a contactless terminal
because they interfere with one another.
"The same will hold true with UHF tags," he
said. "If one item’s tag is too close to another, both are useless
as tracking devices. Combine that with water and other metals, and a basket
of goods will be very difficult to scan 100 percent of the time."
Discussion Questions: Do you think the potential benefits of basket-scanning
warrant the pursuit of a technology solution given all the hurdles? Do
you expect it will eventually happen with RFID or do we need to wait for
another technology to come along?
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We’ll have to wait a bit longer to wheel our carts straight from the aisles to the car. The technical hurdles will be overcome, no doubt. Eventually, there will be sufficient efficiencies to be gained throughout the supply chain to tag every item as close to manufacture (or harvest) as possible.
There are still social and practical issues to work out, especially at the supermarket. Items sold by weight are one issue–imagine being stuck behind the person who forgot to separate their weighables fishing through the cart trying to extract a bag of plums to be weighed at the checkout kiosk!
I agree that the supermarkets stand to reap the biggest benefits from basket-at-once. But with so many different CPG companies stocking their shelves, less-than-acceptable accuracy and read rates on too many items with RFID–as well as questions surrounding widespread adoption–will continue to be major roadblocks. Yes, tags have significantly dropped in price, but especially in the current economy, can supermarkets truly make the case to all their suppliers to adopt the technology?
And building on what Frank said earlier, retailers need to weigh the relatively low purchase price of many CPG goods, such as a pack of gum or a can of soup, to the cost of a fur coat and determine if the ROI is there. Once retailers and suppliers figure out what it’s worth , then comes the stumbling block of who pays for it. Will retailers install and pay for front end readers? Will manufacturers tag every SKU in their portfolios? And how do supermarkets handle PLU items in meat, produce, and fresh seafood?
The other remaining debate, as Frank mentioned, centers on the trade-off between the ease of instantaneous check out, and high-touch customer service, and determining which is more important.
Sam’s Store is in the middle of a trial with the University of Arkansas RFID Lab right now, which was to be completed this year but has been pushed to next year.
With technology at the stage it is right now, there are little adherent benefits and many possible problems. Read rates in a total basket are questionable along with certain products of liquid, foil, etc.
We are far away from this technology and unless you have a tremendous volume, the investment is huge.
The statement in the article above “if you have two RFID-enabled credit cards in your wallet, he said, neither one will work on a contactless terminal because they interfere with one another.” is incorrect. Near Field communications used in Contactless Readers has a range of about 2 inches to eliminate the described scenario as an issue.
There seems to be a disconnect on this RFID tagging issue. First, almost 100% of apparel merchandise is source tagged. Very few apparel retailers even have tagging lines in their DC today, except to solve problems. Even at 5 cents a tag, only higher value merchandise and high theft merchandise can justify RFID tags.
Now the real issues; do retailers of higher value merchandise want no customer interface? What retailer wants self scanning on a fur coat? The answers are no and none. The higher the value is, the more important customer service is.
Even with self-scanning, this may be fine for the express lane, but a customer with a large purchase should have a direct, pleasurable interface with a representative of the company. No customer interface reduces the shopping experience gap between brick & mortar and internet retailers. This may not be a good idea.
Self-service took a major education initiative to get consumers to pick their own items from shelves. Using UPC codes for pricing took a major educational initiative. Once the technology makes “basket checkout” reliable, then another major educational initiative for consumers will be necessary.
I’m sure the technology problem will be solved one day–whether through RFID or another technology with fewer feedback issues. The real question is, will consumer acceptance be as forthcoming?
As Ryan above noted: “The real question is, will consumer acceptance be as forthcoming?
In a traditional checkout lane, the customer derives a tremendous amount of information by watching their purchases move along the belt, hearing one beep per item and seeing the prices ring up on the customer display simultaneously. This all has to happen at human speed (slow) to maintain trust.
Even with an ‘instantaneous checkout’, the customer will likely want to linger in the lane checking their receipt vs. their purchases. It will likely involve a lot of rummaging around, since the order or the receipt won’t match the (dis)order of the full cart.
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We’ll have to wait a bit longer to wheel our carts straight from the aisles to the car. The technical hurdles will be overcome, no doubt. Eventually, there will be sufficient efficiencies to be gained throughout the supply chain to tag every item as close to manufacture (or harvest) as possible.
There are still social and practical issues to work out, especially at the supermarket. Items sold by weight are one issue–imagine being stuck behind the person who forgot to separate their weighables fishing through the cart trying to extract a bag of plums to be weighed at the checkout kiosk!
I agree that the supermarkets stand to reap the biggest benefits from basket-at-once. But with so many different CPG companies stocking their shelves, less-than-acceptable accuracy and read rates on too many items with RFID–as well as questions surrounding widespread adoption–will continue to be major roadblocks. Yes, tags have significantly dropped in price, but especially in the current economy, can supermarkets truly make the case to all their suppliers to adopt the technology?
And building on what Frank said earlier, retailers need to weigh the relatively low purchase price of many CPG goods, such as a pack of gum or a can of soup, to the cost of a fur coat and determine if the ROI is there. Once retailers and suppliers figure out what it’s worth , then comes the stumbling block of who pays for it. Will retailers install and pay for front end readers? Will manufacturers tag every SKU in their portfolios? And how do supermarkets handle PLU items in meat, produce, and fresh seafood?
The other remaining debate, as Frank mentioned, centers on the trade-off between the ease of instantaneous check out, and high-touch customer service, and determining which is more important.
Sam’s Store is in the middle of a trial with the University of Arkansas RFID Lab right now, which was to be completed this year but has been pushed to next year.
With technology at the stage it is right now, there are little adherent benefits and many possible problems. Read rates in a total basket are questionable along with certain products of liquid, foil, etc.
We are far away from this technology and unless you have a tremendous volume, the investment is huge.
The statement in the article above “if you have two RFID-enabled credit cards in your wallet, he said, neither one will work on a contactless terminal because they interfere with one another.” is incorrect. Near Field communications used in Contactless Readers has a range of about 2 inches to eliminate the described scenario as an issue.
There seems to be a disconnect on this RFID tagging issue. First, almost 100% of apparel merchandise is source tagged. Very few apparel retailers even have tagging lines in their DC today, except to solve problems. Even at 5 cents a tag, only higher value merchandise and high theft merchandise can justify RFID tags.
Now the real issues; do retailers of higher value merchandise want no customer interface? What retailer wants self scanning on a fur coat? The answers are no and none. The higher the value is, the more important customer service is.
Even with self-scanning, this may be fine for the express lane, but a customer with a large purchase should have a direct, pleasurable interface with a representative of the company. No customer interface reduces the shopping experience gap between brick & mortar and internet retailers. This may not be a good idea.
Self-service took a major education initiative to get consumers to pick their own items from shelves. Using UPC codes for pricing took a major educational initiative. Once the technology makes “basket checkout” reliable, then another major educational initiative for consumers will be necessary.
I’m sure the technology problem will be solved one day–whether through RFID or another technology with fewer feedback issues. The real question is, will consumer acceptance be as forthcoming?
As Ryan above noted: “The real question is, will consumer acceptance be as forthcoming?
In a traditional checkout lane, the customer derives a tremendous amount of information by watching their purchases move along the belt, hearing one beep per item and seeing the prices ring up on the customer display simultaneously. This all has to happen at human speed (slow) to maintain trust.
Even with an ‘instantaneous checkout’, the customer will likely want to linger in the lane checking their receipt vs. their purchases. It will likely involve a lot of rummaging around, since the order or the receipt won’t match the (dis)order of the full cart.