Twenty suppliers have begun shipping their products on
pallets marked with RFID (radio frequency identification) chips to
more than 270 stores operated by Germany's Metro.
Metro, the world's fifth largest retailer, said earlier this
year it would introduce smart-tag technology across its logistics
and storage operations by November. Initially, the company planned
to have more than 100 suppliers using RFID by this deadline.
"Not everyone is ready yet, but our plan is definitely to have
all suppliers convert quickly to RFID technology in the areas of
shipping and warehousing," said Jürgen Homeyer, a spokesman for
Metro in Düsseldorf, Germany.
The list of suppliers meeting the November deadline include
Colgate-Palmolive, Kraft Foods Deutschland, Nestlé and Procter
& Gamble.
RFID tags are computer chips equipped with miniature antennae.
The technology enables non-contact transmission of product
information such as price, manufacturer, expiration date and weight
via a radio frequency. Many retail experts believe the tags will
replace bar codes over the next decade.
In a next step beginning early next year, Metro will require
suppliers to affix RFID tags to other types of transport packaging
such as cases and crates, and eventually to individual products,
according to Homeyer.
"We are aware of the privacy concerns that many people have with
RFID, and we are openly discussing these concerns with consumers,"
he said. "But we see huge advantages - for us and our customers -
in using RFID to store information about individual products."
Metro views RFID as a way to manage the huge flow of merchandise
in and out of its stores more effectively, while at the same time
reducing both inventory losses and labor costs, according to
Homeyer. Consumers, he said, can also benefit from having products,
for instance, automatically scanned with a running tally when
placed in shopping carts.
In July, Metro launched a new centre in Neuss, Germany, where
suppliers can test RFID systems, such as readers and smart tags,
with their different packaging units under real-life
conditions.
For more than a year, the retailer has been testing the new
tracking and information technology with a number of IT suppliers
and consumer goods suppliers at its Extra Future Store in
Rheinberg, Germany.
Howeve, in March, Metro decided to drop the use of RFID tags
embedded in customer loyalty cards at its Future Store.
Metro owns and operates more than 2,300 wholesale stores,
supermarkets, department stores and specialty retailers, such as
consumer electronics stores, mainly in Germany and the rest of
Europe.
John Blau writes for IDG News Service