Jan 13, 2005IT professional services firm IconNicholson believes that many retailers already have a strong reason to deploy radio frequency identification (RFID) at the item level: to replace existing electronic article surveillance (EAS) systems.
"We have clients that are seeing a return on investment from RFID tagging at the item level just from security and replacing EAS systems with RFID," says Rachael McBrearty, vice president of creative strategy at IconNicholson's RFID Practice.
The company says one of its clothing retailer clients has already decided to use RFID tags for its in-store security systems after testing RFID as an EAS replacement. "We found that EAS security systems worked around 84 percent of the time, while the new RFID system registered in the mid-90 percent range," says McBrearty, who notes that the trial compared EAS and RFID systems from the same manufacturer.
IconNicholson believes there are already cost advantages to using RFID. The New York City-based firm says that an EAS tag typically costs around 4 cents less than a UHF RFID tag, which is currently priced at around 28 cents a tag in volumes of 200,000. But the initial price advantage is negated because EAS tags have a lifespan that ranges from 8 to 30 uses before they must be replaced. RFID tags, on the other hand, do not have a limited lifespan that requires replacement, and therefore RFID tags are cheaper to use over the long run. In addition, says McBrearty, retailers incur labor cost to attach EAS tags to with the individual EAS tags to the items they sell. "Labor for EAS tagging items can range from 10 to 13 cents," she says. RFID tag, on the other hand, can be imbedded in a hangtag and attached to the items by the items' manufacturer.
RFID tagging at the item level can be used for a range of purposes, including inventory tracking and self-checkout, and the cost of RFID readers is similar to that for their EAS counterparts, says McBrearty.
IconNicholson says its clothing retailer client will use RFID item-level tagging on a new brand of clothing this year, with tagging set to take place at the garment manufacturer's warehouse.
IconNicholson has already helped deploy RFID systems at stores operated by fashion house Prada (see Learning from Prada). Other retailers will get a chance to see IconNicholson RFID applications in action as part of the X05 Real Store RFID display, which IconNicholson developed in collaboration with the National Retail Foundation as part of NRF's upcoming show, to be held in New York on Jan. 17 and 18.
Using UHF RFID tags, readers and antennas from Symbol Technologies, the 200-square-foot X05 Real Store will demonstrate four applications that make use of item-level RFID tagging. Four types of products—CDs, T-shirts, figurines and books—will be fitted with tags, and readers will be place at four separate areas. A smart shelving display—consisting of a display monitor, an RFID reader and two shelves fitted with RFID antennas—will show how the system can automatically update a store's inventory record as items are removed. At a "hot spot" containing an RFID reader, a customer can scan a products tag and a monitor will then display related product information.
An RFID-enabled checkout will also let show attendees carrying either an RFID-enabled show pass or MasterCard's PayPass RFID cards to operate the self-service checkout. To demonstrate the technology's antitheft capabilities, an RFID perimeter security system will provide real-time, detailed data about items leaving the store.
IconNicholson has also developed the RFID attendee-tracking system that will be used at the NRF show. This system will use 16 pedestals, which IconNicholson will place at entrances to the show floor and conference rooms. Each pedestal will have a reader and four antennas to monitor attendance. NRF show attendees have the option of signing up for a show pass with or without an RFID label; so far, around 65 percent have opted for an RFID-enabled pass.
