Jan 31, 2006This article was originally published by RFID Update.
January 31, 2006—In what is growing coverage of RFID by the venerable business publication, Forbes.com has posted an interview with Dick Cantwell, Gillette vice president and chairman of EPCglobal's board of governors. As the article notes, Cantwell "is in an unusually good position to judge where EPCglobal and RFID are going." Under Cantwell's leadership, Gillette has established itself as the quintessential RFID early adopter. Its razors are widely referenced as just the type of small but relatively pricey consumer packaged goods that "shrink" as they pass through the supply chain and would benefit greatly from RFID's promise of granulated supply chain visibility. Additionally, Gillette's November 2002 agreement to purchase 500 million tags from Alien Technology was groundbreaking. More than three years later, it still holds the record as the biggest single EPC tag sale ever. (Recall that Gillette's RFID prowess is now an asset of Procter & Gamble, who acquired the company for $57 billion last year.)
Not surprisingly, Cantwell is bullish on RFID. He notes that EPCglobal is now 650 members strong and that there are seven Auto-ID centers worldwide (more on Auto-ID Labs). Gillette is getting nearly 100% data verification, and tag failures have dropped below 1%. Cantwell is even optimistic about the advent of 5-cent tags, believing it to be a "reality within the next few years." This optimism is particularly notable since many industry thought leaders have started eschewing the "5-cent tag" concept, concerned that such a focus is myopic and even wrongheaded.
What is most valuable about the interview is Cantwell's discussion of Gillette's proprietary approach to tagging, dubbed the EPC Advantaged Strategy. The company categorizes its products into one of three tiers: "Advantaged", "Testable", or "Challenged". Advantaged goods are the "low-hanging fruit" that "clearly benefit from the EPC", such as new products and promotional displays. Testable goods are on their way to becoming Advantaged, but the RFID benefits are not yet well understood and need to be explored further. The last tier, Challenged, represents goods for which RFID tagging is hard to economically justify.
The other key takeaway from the Cantwell interview is his emphasis on the value of display tagging: "The rationale for tagging displays is overwhelming... Up to 40% of stores do not take full sales advantage of displays, because they fail to get promotions out onto the retail floor in time. Stores see a 20% uplift in sales if they get displays out for the full promotional period." Cantwell's enthusiasm squares with a trend occurring throughout the retail space. Most notably, giant US pharmacy Walgreens announced in December that it will roll out RFID-enabled promotions display tracking technology from Goliath Solutions across its more than 5,000 nationwide locations (more on the Walgreens deal here).
Read the Cantwell interview at Forbes.com
