Marketers still thinking about RFID

Fakes and thefts are a problem for upmarket apparel marketers, pharmaceutical firms and other marketers of expensive goods. Can RFID (radio frequency identification) tagging help?

An RFID tag (or chip) contains unique and specific data about the item, such as manufacturer name/origin/date, size, colour, model number, and so on. When read electronically, the RFID tag indicates whether that item is what and where it should be. This enables companies to track their products throughout the supply chain and, just as important, determine which items are genuine and which look-alikes are fakes.

The tags have been tested before, but as the price of the technology continues to drop, more marketers are likely to give RFID a try. Gerry Weber, the German fashion firm, is attaching RFID tags to distinguish its genuine products from fashion fakes made by counterfeiters. Other marketers have tested RFID, as well. One use is to check inventory levels and pinpoint any losses.

However, privacy issues remain a concern for consumers. The European Commission has a page devoted to practical RFID uses. For more on the latest RFID news, click to the RFID Journal.

RFID, marketing and privacy

A few years ago, when the RFID (Radio Frequency Identification) tag was a new idea for tracking products in warehouses, toting tolls and taking store inventory, the cost per tag was high and consumers knew little about this technology.

Today, the price per tag is much lower, which means RFID can be a cost-efficient way to handle many marketing functions. As the price of RFID tags and readers drop, RFID will become commonplace in stores, factories, airports and other public places.

The Finnish furniture manufacturer Martela, for example, adds RFID tags in hidden areas of its products (see left). As part of its full service to business customers, Martela then returns to the customers' facilities every year to inventory the furniture and identify broken or worn-out items to be replaced. Thanks to RFID, this is a speedy process that saves business customers time and money--and gives Martela a competitive advantage over other suppliers.

Privacy concerns remain, however. Consumers don't want RFID tracking their movements or use of individual products. Security is another issue: because RFID tags communicate via radio signals, they might be intercepted and/or blocked.

Walmart, for instance, has added RFID tags to many clothing items in its US stores. Although the retailer plans to "turn off" the RFID when clothing is purchased, privacy advocates worry that some tags will be missed or that the tags will be used to link individual purchasers to specific items and transactions, raising the threat of identity theft.

Stay tuned for more on the future of RFID and marketing.