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Retailers See RFID's Potential to Fight Shrinkage

Store operators are beginning to explore new applications for radio frequency identification, including using it as a tool for preventing product theft—or for reducing its impact.
By Mary Catherine O'Connor
Aug 15, 2008A growing number of retailers are beginning to see RFID as a tool not only for improved product visibility, but also for preventing product theft—or, at least, for reducing the negative impacts of product shrinkage. That's one trend that emerged at RFID Journal's third annual RFID in Fashion conference, held this week in New York City.

A number of speakers at the event, representing three retailers that are either testing radio frequency identification or have already deployed it, noted that RFID as an electronic article surveillance (EAS) tool is a compelling use case. Earlier this week, Northland, an Austrian retailer of outdoor gear, revealed details about a pilot test it has started to evaluate the use of EPC Gen 2 RFID tags as EAS devices (see Outdoor Clothing and Equipment Retailer Tests RFID-EAS Tags).

Bill Hardgrave
Bill Hardgrave, director of the RFID Research Center, which is part of the Information Technology Research Center (ITRC) at the University of Arkansas, provided attendees with results of a study he carried out with the help of Justin Patton, the center's managing director, and a group of students. The team examined the feasibility of employing passive EPC Gen 2 tags to trigger an alarm when brought through a read portal. Hardgrave tested the tags alongside conventional EAS tags, read in parallel scenarios (for preliminary results, see University of Arkansas Study Finds RFID Can Add Value to EAS).

Hardgrave and his colleagues tested the tags within the lab, attaching RFID hangtags to a large number of garments and attempting to mimic, as closely as possible, seven real shoplifting scenarios. For instance, they, stuffed 50 tagged items into a shopping bag lined with aluminum foil, tucked some items under their arms, or wore tagged products under clothing to see if an RFID interrogator could detect them. The results were good, he reported, but not always perfect.

In the test in which tagged goods were worn under a tester's clothes, for example, the RFID tag was read in only 63 percent of attempts to pass a security portal, whereas the conventional EAS tag was detected every time. But for the majority of the testing scenarios, the RFID tags performed as well as the EAS tags in terms of being detectable by the readers. And the advantage of reading an RFID tag at an exit portal is that if an item is stolen, the user will be able to ascertain exactly what was taken. This enables a retailer to adjust store inventory levels to reflect the theft.

When large populations of RFID tags were brought through a portal, Hardgrave said, many individual tags were identified. For instance, in a test in which a group of 50 tagged items were brought through the portal 30 times, using two types of EPC Gen 2 tags (a small model designed for item-level tagging and another with a larger footprint, more appropriate for case-level tracking), and moving through six distinct paths through the portal, nearly all (about 95 percent) of the 18,000 possible individual tag reads (50 tags x 30 passes x 6 paths x 2 tag types = 18,000) were successful. (To download the complete study, visit itri.uark.edu/research and enter "rfid" as the keyword.)

Hardgrave reminded attendees that even without reaching 100 percent read accuracy on the tests in which RFID was used as an EAS tag, the use case for employing RFID for EAS applications should have retailers jumping. "If retailers got visibility into even just 75 percent of lost [stolen] items—that is, knowing what was stolen, where and when—that would make the cost of deploying the technology worth it," he said. By knowing what has been stolen, a retailer can then make sure to replenish its stock, which should reduce the need for safety stock and also boost sales by ensuring that the products consumers want—and that store associates expect to have on site, based on inventory—are, in fact, available.

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