Warehouse looks at live trial of electronic tags

The Warehouse Group says it may run a "live" trial of radio frequency identification (RFID) in one of its New Zealand stores before Christmas.

The chain is one of the first local retailers to seriously trial the next-generation tagging technology.

It is currently proving the technology can work at its Auckland "merchandise display centre", a testing facility.

The trial involves a couple of hundred tiny electronic "chips" able to bounce back an identifying radio signal when goods are scanned.

"We hope to use the technology to improve the management of stock," chief information officer Owen McCall told The Australian newspaper.

"Our aim is to better identify what is in stores and where it is."

The company was about three-quarters through the testing, he said.

"We would like to set up the technology in a store towards the (trial's) end to get a real-life store result, but this would only be for one to two weeks."

He could not comment on a future roll-out of the RFID technology, but said the company would like to use it across the business.

"I am not sure how far in the future the roll-out would occur -- we would be talking years not months."

Assistant privacy commissioner Blair Stewart recently warned the public to maintain a "healthy level of concern" over the privacy issues associated with the technology.

While the chips themselves would be neutral in their impact on privacy, the potential use of the technology -- the way that it was deployed -- would be important.

In the United States, privacy advocates have warned RFID could allow corporations and governments to track people's movements and purchases, he said.

People who scanned shoppers leaving a department store or entering an apartment building could track what books they bought, what liquor they took home, or, potentially what kind of underwear they had on.

RFID chips can be as small as a pinhead and placed on anything from currency notes to cans and clothing.

The technology offered huge potential advantages for businesses that needed to accurately track products along a lengthy supply chain.

It could also eventually mean the end of supermarket queues, because a scanner could instantly read every tagged item in a shopping trolley as it went past the checkout.

Mr McCall said that the success of using RFID to track stock in the back office had been proven by other companies, and his company was concentrating on tracking stock in shops.

"The solution works and we are getting very good read rates," he said.

The read rates were satisfactory, but not accurate enough for a stocktake, though the system could help staff locate stock.

If a pilot programme went ahead, it would be used in a small number of New Zealand stores with a limited range of stock.

Some retailers have suggested RFID tags could eventually replace bar codes -- identifying only a type of product -- with identification of individual items on shop shelves.

Retailers and their distributors would know exactly what was on their shelves or being shipped -- regardless of whether the product was medicine, liquor bottles, compact discs or car parts.

It would reduced the need for manual stocktaking, estimating how much product was in the supply chain or on the store shelves.

The chips are already being used by the US Department of Defence and large retailers such as Wal-Mart, supermarket chain Metro AG, Carrefour, Tesco and Ahold.

They are also being used in the US to track high-value pharmaceuticals liable to be stolen or counterfeited, such as Viagra.

Gillette, the US razor and consumer goods maker, has ordered 500 million RFID tags.

- NZPA