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Analysts said the move, which at 15 million tags will be the largest RFID implementation in the fashion industry to date, will be replicated by other closed-loop supply chain or vertically integrated manufacturing retailers, even before RFID standards are agreed on.
Terry Phipps, consulting chief information officer at Benetton, said the system, based on tags which use Royal Philips Electronics' I.Code semiconductor technology to be integrated into labels by Lab ID, will allow the company's 5,000 independently owned stores in 120 countries to get stock on the shelves more quickly.
The system will scan incoming boxes that use RFID-embedded shipping labels, he said, allowing Benetton employees to enter the new merchandise quickly into the store's inventory using handheld devices, from Psion Teklogix.
Since only Benetton stores sell the company's products, the problem of tag compliance from different RFID suppliers is avoided, making the control of the supply chain a certainty, Phipps said.
"This is a huge saving for our [store owners]," he said. "It makes the management of the shops much more efficient."
The tags will include information about the colour, quantity and size of the garments, as well as the date of manufacture. But when the items leave the stores, the RFID labels will be disabled, Phipps said, so that they cannot infringe the privacy of customers.
"Once a garment is sold, it is not part of your inventory any more," he said. "It is not your property any more. There is no client information, no final customer information that is attached in any way, shape or form."
The Benetton implementation of RFID devices is "the tip of the iceberg" for similar deployments, said Peter Abell, an analyst at AMR Research.
"People are all actively looking at putting it into footwear or apparel to improve goods tracking, reduce theft and improve inventory control and monitoring in stores," he said.
"I believe that there will be more closed-loop supply chain or vertically integrated manufacturing retailers announcing RFID initiatives, even before standards are agreed on from the ePC RFID initiative."