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Last Updated: Wednesday, 24 September, 2003, 09:06 GMT 10:06 UK
Tagging your shopping

By Stephen Evans
BBC North America Business Correspondent

New technology will allow stores to track everything we buy - in store or out.

Shoppers in Chicago
Purchases could be tracked out of store

Remember the acronym, RFID: you'll hear a lot more about it.

Radio Frequency Identification is a means of identifying goods - or people - that will make the barcode look as dated as a brown paper label on a piece of string.

RFID is a chip, the size of a grain of sand, which emits a radio signal.

Each chip is unique so any item that's tagged with it can then be tracked individually, all the time and almost anywhere.

Where barcodes only identify a type of good, for example a particular brand of biscuits, RFID identifies every single pack, each of which, in a warehouse or shop, can be tracked simultaneously.

Retailers' dream

There's no doubt the technology is a dream for big retailers.

Wal-Mart store
Wal-Mart is beginning to introduce tags in its supply chain
Wal-Mart has told its hundred biggest suppliers that it wants them to put RFID chips on their products by 2005.

And when Wal-Mart tells its suppliers to jump, they jump high and fast.

The advantages to companies are huge.

Stolen goods can be tracked; stocks can be monitored quickly; a sensor could be placed on shelves which would then register when goods moved.

It's reckoned that the average store has 8% of its goods out-of-stock at any one moment - so cutting that proportion means more goods sold and so higher profits.

In the clumsy jargon of the business, the chips give "instant supply chain visibility".

Civil rights worries

But just as RFID is a retailer's dream, so it's a libertarian's nightmare.

Their fear is that chips on garments, say, could be used to track people: you buy a suit in a store and everywhere the suit goes so does the chip, emitting its radio waves and disclosing your location.

Already, they talk of Big Brother and a "spy chip".

While companies love the technology, they recognise these concerns, or at least the potential for them to be fanned into a public campaign that might hamper the chip's introduction.

Already, some trials have ended after opposition.

Wal-Mart was intending to test RFID tags on razor blades in a store in Boston - there would be "smart shelves" which could detect when packets of the blades moved off the shelves.

Tesco tried the technology in a store in Britain. Although it ended the trial, it said it was not due to opposition.

Supply chain

All the same, it seems likely that RFID will be introduced one step back from the customer, on packages of goods in warehouses rather than on goods on shelves heading for the check-out.

Before the tags arrive on goods in customers' hands, there will no doubt be attempts to reassure the public, perhaps by developing ways of "killing" the tracking properties of the tags before they leave the store, much as anti-theft devices are neutralised now.

After that, all kinds of possibilities open up.

Washing machines could be developed which would read a tag on a garment and then work out what treatment to give the article.

Whatever the qualms, there seems no doubt that the tags are on their way.

The technology is simply too good and too effective to be ignored.

Military use

The biggest user today is the US military.

In the war in Iraq, the Army Materiel Command required all its shipments and pallets to be tagged.

It now keeps track of 300,000 containers around the world every day.

The navy kept track of wounded personnel and prisoners in military hospitals during the Iraq war.

If it works in war, sure as eggs is eggs, it will be made to work in the world's grocery stores.

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