Article

RFID on the horizon for self-checkout

Advances in RFID technology will eventually benefit self-checkout at retail stores, but how long it will take is anybody's guess.

July 4, 2006

Just as retail customers are getting used to self-checkout barcode units, along comes a new technology that points to their eventual obsolescence. Radio frequency identification (RFID) will allow shoppers to check out purchases instantly instead of item-by-item.

Peter Honebein, president of Customer Performance Group and co-author of Creating Do-It-Yourself Customers, imagines that RFID might totally change the retail shopping experience some day.

"The shopper wheels the shopping cart through an archway, and the items in the cart are tallied automatically," he said. "And if that isn't cool enough, the archway also reads your smart card and deducts the cost of your purchase automatically as well. Or perhaps you touch your finger to a reader, which automatically completes the transaction for your purchase."

RFID promises increased efficiency to consumers, retailers and manufacturers. But it is unclear how long it will be before the technology begins to impact the self-checkout devices that customers are just becoming accustomed to.

Honebein emphasizes trust as a factor in the transition toward RFID. "There is no better way to foster trust than to slowly wean customers off what they know," he said. "EPOS and self-checkout technologies will include an RFID scanner alongside the barcode scanner while products make the transition from UPC barcode to RFID. Customers or clerks will scan the items because that is what they are familiar with. Once customers trust that RFID is not ripping them off (like customers had to trust barcodes) we can obsolete the old method and technology and bring in the new ultra-efficient ‘magic archway.'"

Mike Webster, vice president and general manager ofNCRSelf-Service, believes that self-service customers will actually accelerate the adoption of RFID. They will increase trust in the system, he argues, by scanning items with barcodes and corroborating RFID readouts where both technologies are already working together.

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"Self-checkout customers are a potential bridge between current symbology and RFID-enabled products, as (those customers) are already performing itemization and tendering during a transaction," he said. "It's this comfort level with technology and privacy that will support RFID."

Talk of new technology always sends a chill down the spine of those who recently invested in the last great innovation. But John Parsons, marketing programs manager for Fujitsu's U-Scan Self-Checkout, said retailers shouldn't worry about their investments in self-checkout.

"RFID works great in a lab environment, but has many high hurdles to overcome before it can completely replace the current scanning technology," he said. "The revolution that involves going through tunnel portals and whole-basket scanning will be transformational and require new investments. However, it is well in the distance both due to technology capability and consumer acceptance."

Parsons estimates that full transition to RFID self-checkout is 10 to 15 years away. The two key factors he identifies as determining the rate of adoption are cost and privacy.

Parsons points out that while retailers are already experimenting with RFID tags on high-ticketed, non-grocery items, the technology "is still too expensive for many low value items found in grocery stores."

Ongoing research is developing promising solutions; one promising front is conductive ink and the emerging field of "printable tags."

Brad Geiger, manager of the RFID lab at University of Wisconsin, agrees that cost is still a problem. "For most organizations, the main barrier to adoption today is lack of ROI. To overcome this, tag costs must come down further, and there must be some very visible examples of companies realizing a significant return on investment across multiple cases."

Besides cost, Parsons stresses the importance of privacy, which he said "will still be an issue in the short and medium term." Customers may fear that RFID tags will make it possible for their purchases to be tracked once they have left the store, so the tags have to be "killed" (deactivated) after transactions. Parsons notes that "tag-killing" at the register still needs to be perfected. "How do you kill certain tags (e.g. on clothing) in a staffed or check-out lane and not kill other tags on other products close by?"

Despite the challenges posed by RFID, manufacturers of self-checkout scanners welcome it. "RFID will eventually have a positive impact on self-checkout technology," said Parsons. "Fujitsu products are designed to accommodate future upgrades that extend the life of the systems."

Fear that current scanners are already obsolete is allayed by the history of UPC scanning, which, as Parsons said, "first hit the supermarkets in 1976, and the industry at large was not fully converted until 1990. RFID will probably not take the same number of years to completely penetrate the industry, but it will be a very long time for all retailers to create and implement their own value proposition for conversion to the new technology."