Wal-Mart shelves RFID test plan

Wal-Mart has decided against testing a wireless inventory control system on shelves at a suburban Boston store. It’s a move some privacy advocates are hailing as a victory, but one the retailer calls unrelated to concerns about possible misuse of radio frequency identification chips.

Wal-Mart has decided against testing a wireless inventory control system on shelves at a suburban Boston store. It’s a move some privacy advocates are hailing as a victory, but one the retailer calls unrelated to concerns about possible misuse ofradio frequency identificationchips.

Senior Editor John Cox analyzes the debate over RFID chips.

Spokesmen for Wal-Mart and Gillette, which had been Wal-Mart’s partner in the project, say the decision simply reflects a change in business priorities, with Wal-Mart now focused on deploying RFID in its sprawling distribution centers to track pallets and cases of goods.

“We never started a trial there [in the Brockton, Mass., store],” says Tom Williams, a Wal-Mart spokesman. “They brought some hardware in for the shelf. And then removed it. That would have been in late May.”

Gillette spokesman Paul Fox says the consumer products maker never sent Wal-Mart any individual items, such as razors, outfitted with RFID tags, which combine the wireless chip, programmed with a unique number, and a small flexible antenna.

The chip is activated only when an RFID reader scans it. When the chip wakes up, it sends the unique identifier number, which the reader passes along to applications such as inventory control and shipping. The RFID readers can be big enough for forklifts to pass through or small enough to fit on retail shelves.

These so-called smart shelves can read the RFID tag when an individual item is placed on the shelf and when it’s removed. The shelf, in effect, can count the items left on it and alert inventory systems when the number falls below a threshold.

It’s this particularity, among other things, that outrages some consumer privacy activists, who argue that RFID tags can send out radio waves that identify not only the item but where and with whom the item is going. The following warning is listed onthe RFID page of the Electronic Privacy Information Center, a Washington, D.C., public interest research group: “RFID systems enable tagged objects to speak to electronic readers over the course of a product’s lifetime – from production to disposal – providing retailers with an unblinking, voyeuristic view of consumer attitudes and purchase behavior.”

A plan earlier this year by Italian apparel maker Benetton to add RFID tags to its clothing items sparked an Internet-energized boycott. The company in April issued a statement that none of its garments currently carry RFID tags and that it was continuing to evaluate the technology.

So, it seems, is almost everyone who’s anyone in retail.

Wal-Martaffirmed its RFID commitment last monthwhen CIO Linda Dillman outlined plans to introduce the tags on freight pallets and cases by 2005. The retailer is working with its top 100 suppliers on the plan.

Italian designer Prada has had since December 2001 an extensive RFID system at its super-trendy Prada Epicenter store in Manhattan’s Soho district. A shopper can take a suit into the high-tech dressing rooms, which are made of clear glass that turns opaque when you step on a black button on the floor. An RFID scanner in the room reads the tag and displays information about the suit and accessories on a touch-screen liquid crystal display.

Gillette two weeks ago launched an RFID trial at its Devens, Mass., packing and distribution center.

The goal, Gillette spokesman Fox says, is to see how accurately the company can identify and track cases of razors and other items as they arrive at the center, are packaged individually for retail displays, stored in inventory and then selected for shipment to Wal-Mart or Costco. Gillette continues working with two overseas smart-shelf trials, one by Tesco, a British grocery chain, and one by Metro AG, one of Germany’s biggest retailers.