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What Metro Knows About RFID

The German retailer invested millions in a massive display at CeBIT. The big question is, Why?
By Mark Roberti
Tags: Retail
Mar 20, 2006As I write this, I’m flying over Paris on my way back from Hanover, Germany. I was invited by GS1 Germany and BITKOM, a German IT association, to speak at the RFID Forum they organized at CeBIT, the massive German electronics fair. It was the first time radio frequency identification technology had been exhibited at CeBIT, and the Metro Group ensured that RFID made a big splash.

On Friday evening, after my presentation, I wandered over to the NCR booth. John Greaves, NCR's vice president of RFID solutions, and I were marveling at the size and quality of Metro's exhibition. "You're going to have to muster all your literary skills to try to convey this to your readers," John said. "Not possible," I replied.

It would be an exaggeration to say that the area taken up by Metro should have had its own customs and immigration department. But at 2,800 square meters (more than 30,000 square feet), the exhibit would take up an entire hall in some convention centers. It had areas that were designed to look like a store of the future. These showed off smart shopping carts, smart scales, RFID self-checkout stations, smart clothing racks and more.

There were areas designed to look like rooms in the home of the future, with a smart washing machine, a smart fridge and a smart microwave. There were also displays with explanations of how RFID is being used in transportation, sports and other applications. Since I can't adequately convey just how elaborate it was, take a look at some of the photos I shot, which are on display here.

Metro is not an electronics company. It's not a technology company. It's a retailer—the largest in Germany and fifth largest in the world. So why would a retailer spend a small fortune on a huge exhibit at CeBIT? I went over to Dr. Gerd Wolfram, managing director of MGI Metro Group Information Technology GmbH and executive project manager of the Metro Group's Future Store initiative, and said: "Gerd, what's the ROI on all this?"

He grinned. "Well, if you look in the German papers, you'll see the return on investment," he said. "We've received tremendous coverage in the press and on television. The Chancellor of Germany [Angela Merkel] mentioned RFID when she opened the fair. We're pushing RFID into the mainstream."

Metro knows, as other leading early adopters do, that RFID isn't going to deliver benefits unless everyone uses it, so pushing it into the mainstream will have long-term benefits for Metro. But there’s something else going on here. Metro is using RFID (and other technologies) to send a message to customers, potential customers and perhaps investors and potential investors: "We're a tech-savvy retailer, and we're using technology to better serve our customers."

I was at SAP's Sapphire conference in Orlando in 2002 when Metro showed a video detailing its plans to build a "Future Store." The video talked about using RFID and other technologies to create a store that would provide customers with better information and serve them more efficiently. For instance, there would be a reader in the shopping cart that would communicate the value of goods being purchased wirelessly to the cash register when a shopper went to the checkout line. This would speed up the checkout process by eliminating bar-code scanning. It all seemed many years, if not decades, away.

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