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RFID Tracks Video and DVD Rentals

TVL and Matrics have created an integrated system that uses RFID tags to track rental inventory.
By Bob Violino
Tags: Retail
Aug 18, 2003Aug. 19, 2003 - Many companies that rent videos, DVDs and computer games struggle to track their inventory. Movies are often picked up by customers and put back in the wrong place, and thieves find ways to spirit coveted titles out of stores. TVL, a software application development company that focuses on asset tracking, has integrated
Matrics' Shoemaker
RFID technology from Matrics, a Columbia, M.D.-based systems provider, with its own Rapid Rental software to help solve both problems.

The system, which TVL demonstrated at an industry trade show held in Las Vegas last week, is comprised of the Rapid Rental software, RFID tags on the items to be tracked, and RFID readers situated in the store shelves, above the return bins and at the exits.

Two-inch by two-inch Matrics tags, which operate at 915 MHz and are based on the Auto-ID Center's proposed Class 0 Electronic Product Code specification, are inserted under the factory label on the disc or videocassette. The unique serial number on the tag is associated with the rental title in the Rapid Rental software.

The system keeps track of each title's position on the shelf. If someone picks up the item and continues shopping, its status is changed to "roaming." When the person checks out, the system is updated so that when the customer passes the exit reader, no alarm sounds. When the title is tossed into the return bin, a reader scans the tag, and the item is automatically checked back into inventory so it can be rented again immediately.

"This solution is designed specifically for this industry," says TVL president Todd Edmondson. "Right out of the box, a rental chain can begin getting value from it."

John Shoemaker, VP of corporate business development at Matrics, says the tags cost about 50 cents each, and the smart shelf technology, which can be added to a company's existing shelves, costs about $30 or $40 for each three-foot section. Prices will come down as volumes go up. But in the short term, deploying the RFID system in a large video rental store would be an expensive proposition.

Still, the system could pay for itself over time. Rental companies will save labor costs associated with taking inventory, and the system could reduce losses due to theft. But the biggest benefit may be increased revenue. Rental companies derive 70 percent of their revenue from new releases rented on Friday and Saturday night, so knowing where all the copies of hot movies are in real time should increase turns.

"We're bringing visibility to the video management industry," says Shoemaker. "With this system, store owners will know what they have and what customers want to rent and don't want to rent. That's very powerful. It could make or break stores operating on thin margins."

TVL says its Rapid Rental point of sale and rental management system is used by more than 6,000 video and DVD stores in the United States, Canada and the United Kingdom. The target market for the new system is chains that manage several million dollars worth of inventory.

Edmondson says the system will become more attractive if the studios agree to put the tags on the DVDs. That's not out of the question. Since the studios typically get a cut of each rental, the tags would provide a way for them to better track how often movies are rented. And they could probably pass some of the costs along to the chains in the form of higher prices for each DVD or videocassette.

A Canadian chain that did not want to be identified has expressed interest in the system. TVL and Matrics will run a pilot with the company. An entire store will be outfitted with smart shelves to determine the business benefits of deploying the system.

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