Marks & Spencer has begun the UK's largest in-store trial of radio frequency identification (RFID) technology.
The move follows last year's successful implementation of around 3.5 million RFID tags on delivery trays in M&S' food supply chain. If successful, it could act as a watershed for RFID, which so far has only been tested on a small scale in-store in the UK by retailers such as Tesco and Woolworths.
RFID uses microchips to wirelessly transmit serial numbers to a reading device wirelessly, allowing goods to be tracked electronically along the supply chain from warehouse to point of sale.
Stuart Senior, IT director at M&S, said the company wanted to use the technology to ensure 100% product availability, allowing managers to fill stores with as many different types of merchandise as possible.
"With automatic tracking of stock we can get a perfect picture of the goods we have on the sales floor and in the warehouse," he said. "If we can improve data accuracy, we can replenish accurately."
M&S is paying 30p for each tag used in the project, which is partly funded by the Department of Trade & Industry. However, M&S believes the tag price will come down to about 5p eventually, said James Stafford, RFID project leader at M&S.
"All the kit we are buying at the moment is on a one-off basis but we are confident RFID will become commercially viable," he said. "The ultimate ambition would be to have tags on all merchandise, ensuring we get a return on investment."
The four-week trial, which began in M&S' High Wycombe store last week, will see 15,000 men's suits, shirts and ties tagged with ultra-high-frequency RFID devices, which M&S calls "intelligent labels".
M&S is the first UK company to use ultra-high-frequency tags, which offer faster data transfer feeds and longer read ranges than high-frequency tags. This makes them suitable for applications in which many individual items need to be read, even if they are in close proximity to each other.
The Tesco and Woolworths' trials of RFID have centred around easily stolen goods, such as razor blades and DVDs, but M&S decided on suits, shirts and ties because they are all displayed in different ways, Stafford said.
As part of the trial, M&S, with RFID technology partner Intellident, has developed two types of scanner: a gateway, like an airport metal detector, at the distribution centre and the loading bay of the store, to allow rails and trolleys of garments to be pushed through and read; and a mobile scanner in a shopping trolley, which has a handheld reader, used to read garments on the shopfloor.
By electronically checking merchandise before it is loaded on to the lorry, when it enters the store, and, after the store is closed, if it is on the shopfloor, M&S will have an accurate picture of stock levels. "We can find out what exactly is in the store based on the actual facts, rather than the deduced facts, as is the case at the moment," Stafford said.
Consumer interest groups, such as Caspian in the US and Liberty in the UK, have raised fears over RFID, claiming it could be used by unscrupulous retailers to track every purchase customers make.
M&S has made efforts to ensure privacy is protected, according to Stafford. "The tag does not transmit everything," he said. "It just includes a unique number only understood by the M&S stock management database."
Analysts have been positive about RFID, citing its potential to improve availability, cut excess inventory and reduce stock shrinkage, but the experience of early adopters in the US has highlighted concerns about the technology's reliability.
Analyst firm AMR Research said some retailers had reported that RFID tag failure rates were as high as 20%, requiring additional internal quality control procedures. AMR also said early adopters have indicated that the impact on existing IT infrastructure was greater than anticipated.
M&S, for its part, is under no illusion that RFID is a "magic solution", said Senior.
"We have always been an innovative company and technology is very much part of this,"he said. "However, we only roll out new technologies when the value is recognised by customers, employees and shareholders and take-up is readily achieved."
How does RFID tagging work?
Radio frequency identification (RFID) uses microchips to transmit serial numbers to a reading device wirelessly, without the need for human intervention. This allows goods to be tracked electronically along the supply chain from warehouse to point of sale.
However, some retailers using RFID tags have reported a failure rate as high as 20%.
M&S RFID trial
The four-week trial, which began in Marks & Spencer's High Wycombe store last week, will see 15,000 men's suits, shirts and ties tagged with high frequency RFID devices, which the retailer calls "intelligent labels"
A gateway, similar to a metal detector device, installed at the distribution centre and the loading bay of the store, allows rails of hanging garments and trolleys containing packaged garments to be pushed through and read
A mobile scanner in a shopping trolley with a handheld reader is used to read tags on the shopfloor
By electronically checking merchandise before it is loaded on to the lorry, when it enters the store and on the shopfloor, M&S gets an accurate picture of stock levels.