Mixing RFID in the Auto-ID Blender

By Chris Hook

Feb. 19, 2007—As I observe the different facets of how we commonly perceive RFID systems, it appears the rush to deploy radio frequency identification has caused many people to forget the humble but ubiquitous bar code. The reality is that bar-code systems have transformed our lives, our businesses and our efficiency.

I'm old enough to remember the days before bar codes were used in supermarkets, when two manual processes were used for identifying prices and capturing the data at the point of sale. One process entailed pricing items individually, using stickers marked with the unit price, then having employees read and enter the data manually. The alternative, advanced approach involved numeric price look-up (PLU) codes, still used today on fresh produce. With the advent of reduced-space symbology (RSS) bar codes in supermarket point-of-sale transactions, however, this latter process is changing as well.


What do these technology-enabled advancements represent to us as consumers? How has bar coding made a difference in retail store operations, providing a better shopping experience? For starters: much faster and more accurate data capture, and overall improvement in replenishment and other in-store operations.

With regard to commentaries referring to a "convergence" between various auto-ID technologies, I comprehend the viewpoints and agree that convergence will occur, but to what extent? I feel it is also important to consider how the differing and complementary front-end technology systems will coexist in a particular domain of use, and I suggest that this conceptual approach is less combative and more aligned with what we observe in actual practice.

Consider the use of RFID for freeway tolling, in such systems as Illinois' I-PASS or the Northeast's E-ZPass—the advent of these systems did not totally replace cash. Wholesale, overnight displacement of an older form of technology rarely occurs due to varying factors, including business inertia, the scale of deployed systems that would need to change and standards-development cycles. As it was with cash versus I-PASS or E-ZPass, so will it also be true in the case of bar codes versus RFID in supply chain operations.

I am a passionate believer in the potentially disruptive nature of new technologies, and the complexities this creates as you ponder product development—as a technology provider or system deployment, or as an end user. I note with considerable interest the increasing number of cell phones equipped with near-field communications (NFC) technology, for instance. NFC-enabled phones include passive 13.56 MHz RFID chips that can be used for contactless payments and a range of other purposes. ABI Research predicts that 50 percent of cell phones will be equipped with this technology by 2010 (see NFC Is Appealing But Lacks Infrastructure).

How might this impact other growing RFID applications, such as electronic ticketing for mass transit? First, there would be a coexistence of complementary forms of payment for services. Second, forecasts made about the rise in quantity of passive RFID smart tickets for mass transit may be suspect if disruptive influences I have described are not taken into account. A third impact involves the need to confirm that payment systems can be easily adapted to handle both NFC tickets, and contactless, conventional-format smart tickets. And a fourth is the change in the business model from the transit authority holding the float of money associated with issued tickets, to favoring those companies involved in handling the processing of micro-payment transactions, thereby deriving unexpected revenue.

Does NFC pose a disruptive threat to smart tickets? I believe it does.