RFID for Smart Markets and Self-Checkout Gains Traction

By Claire Swedberg

Nordic ID and Avery Dennison are offering RFID technology that is more effective, flexible and low-cost than RFID systems of the past, enabling retailers to begin installing systems that will enable customers to make purchases and access product content without the need for sales personnel.

With the advent of low-cost RFID tags designed to be safe for use around food, coupled with reader and antenna engineering and the development of proprietary software solutions, passive UHF deployments are moving into the grocery market. Technology companies Nordic ID and Avery Dennison have been demonstrating that RFID can reliably track food at stores, and thereby enable smart markets and self-checkout.

Avery and Nordic ID predict that RFID deployments in the grocery market may follow a similar trajectory to RFID use in fashion, for which the technology has become commonplace, with tags often applied at the point of manufacture. The two companies demonstrated their solutions, including Nordic ID's S/MART smart market, Self Checkout station and InfoDesk (which automatically displays product-related content), and Avery Dennison's latest food purposed tag, at the National Retail Federation's 2019 NRF Big Show.

A fully automated and unmanned store

For Nordic ID, the development of affordable and effective RFID-based systems for food retailers began more than a year ago, when the company began working with IBM IX, the Interactive Experiences consulting division of IBM, to create instant checkout solutions. Following that project, Nordic ID has continued to develop a commercialized solution that can accomplish reliable RFID tag reads no matter what products they might be attached to, thereby enabling them to be used even in stores that are unstaffed.

With regard to the S/MART system, Nordic ID supplies retailers with everything but the point-of-sale (POS) software, including the reader and antenna installation at a store, and cloud-based software to capture data and provide the necessary information to a user's existing POS system, according to Juuso Lehmuskoski, Nordic ID's services and solutions VP. The system works with any suitable UHF RFID tags, which can be applied to products ranging from liquid beverages to foil packaging.

An S/MART deployment would typically consist of a combination of fixed readers installed on ceilings or walls, as well as readers and antennas on shelves to capture the tags of the goods on display. The antennas can be mounted under a shelf, or (in the case of metal shelving) be installed on top of the surface so that products can be placed directly onto the antenna. The installation also includes an RFID reader at the point of sale, along with readers installed at the exit.

A store using the technology would not require any personnel to manage sales. Instead, a shopper would arrive at the site and provide a loyalty card or credit card to a scanner or Near Field Communication (NFC) reader at the entrance. The Nordic ID software would prompt the door to unlock for that individual. The customer could then walk around the store, select items he or she would like to purchase, and place those goods in a shopping bag.

An unmanned store concept, which was demonstrated in Espoo, Finland

Once the shopper has completed selecting items to purchase, he or she can proceed to the point of sale and place a bag filled with goods—or the items themselves—on the counter, in which an RFID reader has been installed. The reader captures all of the items' tag IDs, and a touch screen at the same location displays all of the products detected. The user can simply select a prompt to complete the purchase, then walk out the door. The purchased items will be transferred in the software to a white list, indicating products that have been paid for, and a receipt can either be printed or e-mailed to the customer.

As the shopper approaches the exit, another RFID reader at that location interrogates all of the tag IDs and compares them against the white list. If any tag IDs do not match, the door will remain locked and the individual will need to use the touch screen at that location to resolve the problem—typically, by paying for any extra items, or by putting them back on the shelf. To pay for extra products, Lehmuskoski says, "[The system] can send a customer back to the point of sale or set up an auxiliary payment method at the door."

The solution could also be used to simply charge customers as they leave the store with goods. However, Lehmuskoski says, retailers tend to request the checkout process, simply because shoppers are more comfortable with that technology. "Customers are still geared to having a physical location where they do the payments," he states. In addition, the software can send data to the retailer's inventory-management system to automatically request the replenishment of purchased goods.

Nordic ID provides a variety of its readers, Lehmuskoski reports, depending on a particular use case. The firm works in cooperation with Avery Dennison, he says, because Avery has released FDA-approved tags that are versatile enough to work on liquids, aluminum cans and packaging, while being low in cost.

To ensure near-100 percent read accuracy within a grocery environment, Lehmuskoski says, Nordic ID readers and antennas have been designed in such a way that they can read tags attached to liquids or metal. The engineering consists of special antenna design, array configuration and software algorithms to ensure that tags can be interrogated reliably, and that no stray reads will be captured from products not actually being purchased or removed from the store.

The company offers its systems on a platform-as-a-service (PAAS) model. The self-checkout solution is designed for use at stores with sales associates onsite. It can thus be employed as an alternative to traditional points of sale at stores that opt to offer both choices for customers. It can be used by customers seeking a fast and easy checkout system, or to provide additional support to workers at busy stores. The self-checkout technology is being piloted by European retailers and consists of a Nordic ID reader and software linked to a store's existing POS system, according to Paul Murdock, Nordic ID's corporate development manager and chief commercial officer.

For both the S/MART and self-checkout systems, Murdock says, "We offer a platform for a company that doesn't already have RFID." The system is designed to be relatively simple to implement, he explains, since it enables retailers to utilize their existing POS software. "We've developed a platform that uses a retailer's existing point of sale," he states, "making deployment easier, without requiring changes in the POS system."

One self-checkout solution deployed last year is Indian retailer Myntra's Roadster Go store, which has an RFID-enabled checkout process using an RFID tray installed at POS counters to enable the sales of shoes and apparel. Nordic ID provides the hardware for this deployment, while a third-party supplier provides the software.

Upon entering a store, a customer identifies himself or herself with a debit card or mobile app.

Nordic ID has also released the Infodesk, a kiosk designed to enable a customer to learn more about a product before buying it. The kiosk features a built-in RFID reader, as well as a large screen that displays information about products. The reader captures the ID of a particular item's tag, then Nordic ID's software prompts the display of content about that product.

Avery Dennison's Universal tag allows RFID systems to track food, based on its ability to be safely applied to the packaging of food that will be microwaved (the tag itself is microwaveable), as well as its effectiveness when applied to metals or liquids, according to Julie Vargas, Avery Dennison's head of global RFID market development for food. That, she notes, includes products such as a can of soda.

In addition to the multi-purpose Universal tag, the company also sells specialty inlays for specific form factors and environments. "We find our customers are really interested in accelerating the experience of frictionless shopping" for consumers, Vargas says. That process will involve working with shoppers to build the most effective and intuitive solutions, she adds.

Murdock cites a combination of staffing challenges and improving technology functionality that are driving interest in self-checkout and unmanned stores in the grocery retail sector. He notes that the government of Japan, which has an aging population and fewer young people to man stores, is working with five major convenience stores to launch nationwide self-checkout locations by 2025. "They are not the only country with an aging population that will have trouble supporting these stores," he adds.

For retailers that sell third-party brands, however, source-tagging will still be required to achieve wide-scale adoption, Murdock says. Lehmuskoski predicts that the number of RFID deployments will rise this year, and that they will reach the kind of critical mass achieved in the fashion industry by next year.

RFID will not be the only technology in use, Lehmuskoski predicts. For instance, Amazon is using camera-based technology to enable unmanned store functionality, with artificial intelligence identifying which items a customer is taking from a shelf. "My take is that the future will probably include a combination of multiple technologies," he states, "RFID being one of the dominant ones."