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TAGGING intelligent systems – Rocket science for retailers

This is certainly the perception that global retailers have. As Mike Schuck of the British Retailing Consortium aptly commented: "The IT people of tagging are already circling Mars rather than lighting the blue touch paper of the earthbound firework." 

The whole tagging scenario for retailers, their suppliers and even the consumers is a very complex one.Mr Schuck explains the retailer’s view and aspirations for such items: "Retailers are very cautious of the promises of what IT within the tagging question can provide.

There is still a fairly substantial gap between dream and reality. Retailers understand the potential of RFID and the increasing need to be global but, up until now, there are still three different types of tag and retailers are desperate to have a unifying market.

When such a thing happens it will not only benefit the retailer but it will also be a huge added value element for the consumer for, up until now, tagging is only perceived as being a security issue. The potential for RFID intelligent tagging is enormous.

For example, each tagged product would have the guarantee built in, date of purchase and location and any other information relevant to that product.It will make exchanging the product easier for the customer and, for the retailer, it prevents fraud.

In reality the consumer gets a ‘lifetime’ information tag and the retailer gets a full ‘travel of goods’ trail. This ultimate tag would greatly reduce theft and loss and this is particularly relevant when one considers that the average breakdown of product slippage is a third in production and transit, a third from the retailers own staff and the remaining third from dishonest consumers."

There is, in what Mr Schuck says, an element of hope as well as frustration and it is specifically a retailer’s view. Another significantly more buoyant appraisal of retailers and tagging systems is held by Martin Swerdlow of Integrated Product Intelligence, a company based in London who, while understanding Schuck’s fears and frustrations does have answers.

"I believe the retailers principle problem is that they actually want the tag to be integrated into the product at the point of manufacture. This would mean that they would not have the financial overhead of tagging or the problem of tagging by a potentially dishonest member of their own staff.

"The problem at the moment, without any form of unification, is that the manufacturers or suppliers would have to employ different technology for different retailers. At present this is an interactive problem with no simple answer.

"If RFID replaced all the other forms of technology, the problem would disappear at a stroke but, in reality, the robustness compared with other technologies is not proven and the cost is significantly higher."

What is also worth remembering is that while tagging used to be all about security RFID is about a lot more, as the silicon radio frequency technology allows data input and other technologies don’t.

Retailers have over the last five years been playing a significant part in the development of intelligent tagging systems making UK plc the most advanced in the world for RFID in business situations.

This enthusiasm is growing as retailers are better able to understand the potential but, in reality, it will be some time before they can in confidence roll out a significant RFID tagging programme. It will also require major investment.

Mr Swerdlow, despite the perceived problems, remains enthusiastic as to the potential. "Imagine in five or so years time walking into a supermarket where your shopping list has been recorded from the items thrown away in your dustbin so that the retailer knows exactly what you need to replace," he says.

"While this may seem like science fiction, it is worth remembering that in 1992 the CSIR in South Africa announced the invention of a supertag that had the potential to make stores completely checkout free.

"Everything was recorded as you left the store and could, in theory, have been directly debited to your store or credit card.Surely, the consumer would benefit? From the retailers point of view this form of tag would enable a commercial transaction to take place without the staffing element being applied and in a totally secure way."

There is no doubting the potential of a robust and proven RFID system.It enables all parties, not just the retailer and consumer, to communicate throughout the whole supply chain management enabling ‘just in time deliveries’, detailed stock control and much more.

There is however one worrying issue that companies such as Integrated Product Intelligence are now having to take on board and that is ‘privacy’.

Just how much personal information will the consumer want the retailer to have? This is almost a chicken and egg scenario because, until the retailer has the ‘personal’ shopping information, it cannot offer the benefits that RFID can give them.

How are the tagging manufacturers shaping up to the challenges that users are increasingly throwing down? One company that is specifically targeting product theft in a technologically flexible way as well as at manufacturing source is Sessions of York with a new range of EAS labelling machines.

One of the benefits of its new systems is that the tag itself can incorporate Acoustomagnetic (AM), Electromagnetic (EM) or Radio Frequency (RF), enabling the manufacturer of the products to tailor make the tag to the retailers own security systems.

Another significant development in the actual tag is that, unlike other standard security tags, its system allows their tags to be supplied integrated into widely used self-adhesive labels.

The tagging machines themselves also operate at high-speed automatic application.At first glance this would seem to be a simple and logical step, the benefit to the retailer being that it is done at product source to his or her own security system requirements.

Tagging systems have in the past been synonymous with bulk and ugliness. Try on a jumper in a store and receive a dig in the ribs from a huge piece of white plastic. What would happen if these ubiquitous tags could be of a more contemporary profile as well as product branding?

A tall order – not if you are Burberry or House of Fraser who use tags supplied by Unisto. "The company, although founded in 1926, always focused on brand profiling and security seals," explains Donald Miller of Unisto.

"Nowadays we have made the development of high quality security seals and image building brand identification products the company’s speciality. Working in conjunction with Sensormatic in Europe we have developed an injection-moulded tag that can be branded and hold a Sensormatic Ultra-Strip label, both protecting and hiding it from view.

"The Brandsecure tag is attached to the product by the use of a cord loop, a patented slider on the loop enables it to be closed on the product and held in place securely.

"One of the major benefits to retailers is that the branded body and Ultra-Strip are reusable with only the cord loop and slider needing to be replaced, making it a cost-effective solution.

"This system and our other Brandsecure-Plus Tag offer the retailer of high value items the obvious benefit of branding in keeping with the quality of each product as well as keeping them secure in the retail environment.It also does not affront the well healed consumer that is important."

As can be seen there are great efforts being carried out by both tag manufacturers and retailers alike. Darren Ratcliffe of Checkpoint Metro emphasised some key elements for retailers to bear in mind, particularly with reference to RFID.

"Tagging today, such as RFID, is simply not a product costing 50p a tag. It is a system that can save pounds as well as time and management function. It is a concept procedure.When fully developed RFID will seem quite cheap as it is a management tool for the supply chain.

There are also some significant cost reductions coming into the RFID arena, such as the removal of the antenna on the tag to be replaced by carbon ink as a printed antenna. Other polymers are also being developed for this element.

What is critical is to have the right system. We produce short range that gives a static reading. We also produce long range that is applicable to entry/exit of products. There are continuing trials going on which, as they proceed, actually open up more possibilities for the retailer as the technology is better understood."

The initiatives are not just manufacturer/retailer based. The Home Office has committed £5.5M of funding for the trialing of chipping of goods in order to take the process further. In the latest round of funding Argos, Unilever and Allied Domecq all received finance for further investigation and trials.

The initiative is a two-year project with the latest tenders being in for January 2002. This kind of work, alongside manufacturers and end users, is currently making UK plc the foremost player in the world for RFID.

What the retailers need is for the trials to be successful and fully understood so that they can action the process into their total supply chain management. Let’s hope that this is sooner rather than later.