The day when RFID (radio frequency identification) replaces bar codes for identifying products is at least 15 years away, according to an executive of German retail giant Metro, which is leading the smart-tag charge in Europe.
"We will see RFID increasingly replace bar code for certain products but the technology won't be used to identify all products for a good 15 years or more," says Gerd Wolfram, managing director of MGI Metro Group Information Technology.
Metro is collaborating with several IT companies, including IBM, Intel and SAP, and more than 40 additional consumer goods and technology suppliers to develop RFID systems for the retail sector. The retail giant operates Europe's largest RFID test bed.
Wolfram cites high unit prices for RFID chips and radio frequency interference issues with some products among several challenges that need to be overcome for a mass rollout of the smart-tag technology.
Another is data privacy, Wolfram concedes. Consumers need to know that RFID is about giving them a "richer shopping experience" and not about tracking their whereabouts, he says.
Consumer uneasiness about the use of RFID forced Metro in 2004 to drop the use of smart tags in customer loyalty cards used at its Extra Future Store supermarket in Rheinberg, Germany, where the retail group is testing several new IT retail technologies.
Consumers Against Supermarket Privacy Invasion and Numbering (Caspian) and other privacy and civil liberties advocate groups have been lobbying hard against a widespread deployment of RFID, worried that the technology could create an Orwellian world where sales clerks or law enforcement officials could read a handbag's contents by simply waving an RFID chip-reading device's wand.
Currently, Metro is using RFID in its logistics operations. More than 40 suppliers are tagging their pallets and boxes with smart tags.
The company expects to more than double that number when second-generation RFID chip technology becomes available in the second half of this year.
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