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There's Absolutely Nothing to Worry About. Now Take Your Pil

By M. KUSHNER 2004-06-19 05:48:11 PM

02:00 AM Mar. 12, 2003 PT

In a move wireless industry analysts say will infringe on customers' privacy, clothing designer Benetton plans to weave radio frequency ID chips into its garments to track its clothes worldwide.

The chips will help the Italian clothing manufacturer cut costs by eliminating the need for workers to take inventory by manually scanning individual items of clothing. It will also protect the garments against theft, analysts say.

Today's the Day. But analysts warn that the RFID chips could pose significant risks to customers' privacy because they would allow anyone with an RFID receiver to locate customers wearing Benetton clothes, including companies that want to sell them their products.

Mike Liard, an analyst with technology research and consulting firm Venture Development, said the more companies that embed RFID tags in their products, the more likely it is for someone to drive by a home and say, "'Look what we've got in there. An HDTV is in there, and she wears Benetton.'"

"That's a huge concern," Liard said.

Privacy advocates fear that consumers will be bombarded with intrusive advertising since a history of customers' purchases and their identities would be linked with the tag even after they leave the store.

Richard Smith, an Internet privacy and security consultant said he is eerily reminded of a scene from the movie Minority Report, when Tom Cruise enters a department store and is welcomed by a billboard ad. But instead of scanning his eyeballs as was done in Minority Report, his Benetton shirt would be scanned to identify him.

"It's extremely intrusive," Smith said of Benetton's proposed RFID system. "The surveillance network would be initially built to sell clothes in the store but could be used for this other stuff. You don't need to build anything new for that."

Among other businesses, luxury clothing retailer Prada already embeds RFID inventory tags into its clothing. Procter & Gamble, Wal-Mart and British retailer Tesco are other companies mulling over using smart tags for restocking, anti-theft and anti-counterfeit purposes.

Royal Philips Electronics is shipping 15 million RFID chips, which are the size of a grain of sand, to Benetton this year.

Phillips claims the effort is "the world's largest and most comprehensive item-level tagging implementation of RFID technology in the fashion industry to date."

Benetton, which makes casual clothes and sportswear for men, women and children, said it would weave the technology into the collar tags of clothes that cost at least $15 to keep track of them as they ship.

"Benetton has thousands of retail outlets worldwide and therefore wanted to put in place a future-proof technology to bring clear cost benefits to the business, while seamlessly enabling garments to be tracked throughout their lifetime," Terry Phipps, electronic data processing director at the Benetton Group, said in a prepared statement.

The RFID technology offers Benetton a number of advantages, not the least of which is its ease of use. Unlike a bar-code scanner, which must be held directly in front of the item being scanned, employees with RFID receivers or shelves with the technology can scan entire boxes of items from up to five feet away.

The technology would thus require fewer people to scan clothing items for inventory purposes.

It also lets business managers easily store detailed information about customers' buying habits that could spur further sales. For example, when a Benetton customer makes a purchase, a sales clerk could pull up that client's history and say, "Last time you were here, you bought


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