Can Radio Frequency Identification Improve Product Freshness and Reduce Out-of-Stocks?

Are there any examples of RFID business models in supermarkets?

—Name withheld

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Using radio frequency identification technologies in a supermarket can be challenging since so many items are low-cost. But an analysis of the results of a pilot project carried out in Italy shows that the use of EPC Gen 2 passive ultrahigh-frequency (UHF) RFID tags on product cartons can reduce the rate of supermarket out-of-stocks, as well as improve product freshness (see Italian Study Shows How RFID Can Help Reduce Supermarket Overstocks).

The University of Parma's RFID Lab ran a pilot designed to assess the value of radio frequency identification within the retail supply chain. Auchan was the only company that played an active role, by testing the technology at its distribution center and stores, while the other participants funded the project, provided consultation and observed the process.

The pilot aimed to track the movements of cartons filled with products into and out of an Auchan DC, and to the dock doors of two of its stores. Once the goods were removed from the tagged cardboard boxes in which they were shipped and stored, the tags were read a final time at a store's trash compactor as the cartons were destroyed, thereby indicating that the products previously packed within must be located on shelves at the front of the store.

During the project, readers were installed at the dock doors of Auchan's DC in Calcinate (Bergamo), Italy, as well as in the receiving area at two Auchan stores, in Curno and Roncadelle. Auchan's staff attached EPC Gen 2 RFID labels to approximately 30,000 cases of goods during the course of the study, including fresh pasta and sauces, cheeses, hams and other perishable goods, along with 14 different types of canned or boxed dry goods, such as coffee and pet food.

The University of Parma's researchers concluded that the use of RFID could improve product freshness by reducing the need to overstock shelves. The researchers did not calculate the return on investment.

—Mark Roberti, Founder and Editor, RFID Journal