Mar 05, 2009Walgreens, the United States' largest drugstore chain, has completed a nationwide installation of an RFID tracking solution for promotional displays in all but a few of its 5,000 stores. Cosmetics firm Revlon has announced that data derived from the system has helped it achieve increased sales from its promotions at Walgreens.
The deployment began in 2007 (see Walgreens to Use Tagged Displays), as the result of eight years of pilots and testing that involved the system's developer, Goliath Solutions, as well as Revlon and other consumer packaged goods (CPG) vendors. In addition, the drugstore chain soon plans to test an upgraded version of the system that would allow RFID interrogators to be utilized with EPC Gen 2 UHF tags rather than with the proprietary semi-passive tags currently in use.
According to a statement issued by David Van Howe, Walgreens' VP of purchasing, the RFID system has enabled the drugstore chain and its CPG suppliers to manage the promotional displays more effectively, thereby increasing sales of the promoted products. Walgreens declined to answer questions for this article, however, and Revlon officials did not respond to phone calls requesting additional information.
Revlon is one of many CPG suppliers tagging displays at Walgreens, says Gary Overhultz, Goliath's COO. The cosmetics company's goal, he says, is "to gain an understanding of how those materials are successful, and ensure they [Walgreens and Revlon] fully take advantage of opportunities to improve the execution of those promotions."
Revlon was interested in determining the value of the various displays, based on the quantity of displayed products sold. The firm found that by using the sales and location data related to these displays, it could better ensure that the most popular displays were placed on the sales floor at the proper time and location, thereby increasing sales. Those increases, Overhultz says, have proven to be between 200 and 400 percent greater than sales achieved without using the system.
The system employs RFID hardware and software designed and supplied by Goliath, and requires only a single RFID reader be installed in each store, wired to an array of antennas embedded in the ceiling so they cannot be seen. Battery-powered semi-passive Goliath RFID tags, operating at 902-933 MHz, are attached to promotional displays by either Walgreens' staff members or the CPG supplier. The tags lie dormant until an RFID interrogator instructs them to transmit their data.
Data from the point-of-sale terminals is also sent to the server. The software compares that information against the promotional display's store location, in order to evaluate the effectiveness of a specific display and its location. Walgreens' suppliers then pay a monthly or per-use fee to access that data.
The semi-passive tags have a long read range—100 to 200 feet—making them a good choice in stores. However, EPC Gen 2 UHF tags would be less expensive and more appealing for retailers, since such tags are offered by a number of RFID vendors, typically for logistics solutions. A proof-of-concept test is slated to begin at the end of March, Overhultz says, in a Chicago-area Walgreens. If the technology appears to work properly with the new tags, he adds, the readers can be replaced in all of the drugstore chain's locations.
According to Overhultz, because the read range of passive EPC Gen 2 tags is shorter than that of the Goliath semi-passive tags, more antennas may be required in a store's ceiling. However, he notes, Goliath has developed the system to read passive tags at distances greater than that usually attained for passive tags. He declines to describe how long that read range might be, or how the Goliath engineers have achieved such a range. He adds, however, that the interrogators would be unlikely to capture Electronic Product Code (EPC) numbers from tags the CPG companies place on products or cartons for logistics purposes. The display tags intended for reading by the Goliath system, he explains, would need to be applied at the best location for capturing reads from the ceiling antennas.
In some cases, Overhultz says, stores may choose to continue utilizing the existing semi-passive system. "Because long-range reads will be valuable for other applications," he notes, "we will continue to read such tags in addition to passive EPC tags." This can be accomplished with a multi-functional reader, designed and sold by Goliath, that could operate with either Goliath's semi-passive tags or passive EPC Gen 2 tags.
Wal-Mart is another retailer that has employed radio frequency identification to track promotional displays. One of its suppliers, Procter & Gamble, has indicated that the use of RFID to monitor when displays are moved to the sales floor has resulted in improved promotional effectiveness and increased sales and (see P&G Finds RFID 'Sweet Spot'). Nonetheless, P&G recently opted to cease tagging the product displays it sends to Wal-Mart (see Procter & Gamble Halts Tagging of Promotional Displays).
