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European retailers have the hots for RFID

Supply chain economics

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Four in ten big European retailers are planning RFID pilots this year. In a survey, more than a third of 125 European retailers say that RFID technology is ideal for tracking goods and reducing the number of products lost in transit.

The survey, conducted by market researcher Vanson Bourne and commissioned by industrial printing firm Printronix, reveals that 25 per cent of respondents are using RFID on the case / pallet level and this will rise to nearly 40 per cent by 2006. Retailers in the UK, France, Italy, Germany and Spain were quizzed on their attitudes to RFID technology.

Confusion over European frequency requirements and standards is the major barrier to even faster adoption of RFID technology, according to Brad Jarvis, director of product marketing at Printronix.

Standards and frequencies will be decided by EPCglobal, the standards body in the RFID industry. These frequency standards are then ratified by regulators in each European country, a responsibility which falls in the UK on the shoulders of Ofcom. All should become clear in June 2004, when Ofcom is expected to confirm a new European frequency for RFID tags and readers.

The perceived high costs of RFID tags and readers are another barrier to deployment "When you're putting RFIDs on pallets and cases not instead of individual items cost is not as much a barrier. Also privacy concerns are far less significant," Jarvis says. RFID tags cost between 40c to 70c each and this will drop further with increased production.

The study shows almost a third (31 per cent) of European retailers are unsure of which suppliers to approach for RFID-compliant technology. "We're at the early adoption stage and the market is talking about a shortage of partners with knowledge. Even though IT heavyweights like Microsoft and IBM are getting into the market there's still room for more consultants, integrators and providers," said Jarvis.

Printronix is already involved in the RFID market in America and is eyeing Europe for expansion. Last September, it launched the Smart Label Pilot Printer, which embeds an RFID tag into a label, which can be fixed to a pallet or case.

Much of the interest in RFID tags to date has been generated by the decisions of Wal-Mart and the US Department of Defense to ask its main suppliers to implement the technology.

Europe's biggest retailers are just as keen and the rate of adoption is similar, Jarvis says. "With its potential to update tracking technology and improve supply-chain efficiencies, RFID will become a requirement in business-to-business transactions, both commercially and in the government." ®

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