While major players may press ahead with the technology, smaller companies should take a holistic view of its impact on their business. Widespread adoption at the item level isn't expected until 2008-2010, providing "a good opportunity to look at it from a business perspective," she said.
Case or pallet tagging is likely to take off next year in some markets, she suggested, but one of the attractions of RFID technology is that it allows each unit of a product to carry a unique identifier. The Electronic Product Code (EPC) used in standards-based RFID systems allocates 36 bits for this purpose, providing over 68 billion serial numbers.
This has many potential benefits for retailers, include real-time inventory management, automated cross-selling and up-selling, streamlined self-checkout (a trolley load of goods could be scanned almost instantaneously), dynamic pricing (to support 'half hour sales' and other promotions), and security (eg, to detect unusual quantities of an item being taken off the shelf at one time, or goods going out through the back door instead of through the checkout).
Smaller retailers can take their time and adopt RFID when it suits them, but small to medium sized suppliers need to keep a closer watch on the technology to ensure they don't find themselves shut out if their wholesale or retail partners mandate the use of RFID as they did with EDI, warned marketing manager Michael Panosh.
EAN Australia is the industry body that oversees product numbering in this country, including EPC. According to a spokesperson, EAN Australia will officially launch EPCglobal Australia in October to promote and assist the local adoption of EPC, including the development of a code of conduct to address privacy concerns. Most major retailers and other industry bodies including the Australian Retailers Association (whose members account for 75 percent of retail sales) will also be involved in that process, he said.
EAN is considering a proposal to increase the maximum power used in RFID applications from 1 watt to 4 watts. "A lot of retailers are looking for 4 watts to increase the read range," he said.