No business case for item-level RFID tags unless done by suppliers, Tesco trial finds

Tesco has dropped plans to introduce item-level radio frequency identification tagging following a pilot scheme. It will focus instead on pallet-level tagging.

The supermarket said it could not make a business case for tagging high-value items such as DVDs and computer games, unless its suppliers attached the tags before they entered the supermarket's warehouses.

Speaking at the British Retail Consortium's RFID conference, Tesco group IT director Colin Cobain said, "With entertainment products, tagging is not done at source by the manufacturers and we did not find an efficient way of doing it in our warehouses."

However, Tesco still benefited from running the item-level RFID tagging trial.

Cobain said the company had changed the replenishment schedule for DVDs and games across its 1,252-strong chain of stores in the UK.

Item-level tagging allowed Tesco staff to see how many high-value goods they had in-store in real time, and during the trial it was found that shelves were being restocked about 1.5 hours later than was optimal.

During the trial, Tesco's store managers and head office staff could monitor product availability through a web application.

In a new trial to be launched later this year, Tesco will begin pallet-level RFID tagging.

Tesco RFID advice

Retailers planning RFID trials should remove the project from the control of their IT departments, according to Tesco.

"Do not have it led by IT; make sure your supply chain colleagues are the leaders of this," said Tesco group IT director Colin Cobain.

Companies should identify specific problems with their supply chains that RFID may solve. They should not start with the technology and then look for projects where tags may help, he said.