RFID item-level tagging takes a step forward

With the announcement that German retailer Metro AG is launching a pilot to tag its menswear department, right down to the socks, with RFID tags, item-level tagging gets a boost.

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 10/2/2007

Item-level tagging took a step forward a few weeks ago with the announcement that German retailer METRO Group is launching what is said to be the first end-to-end UHF item-level shopping experience.

The pilot program will be deployed in the menswear department at Galeria Kaufhof, a METRO-owned department store in Essen, Germany.

The announcement is interesting for a couple of reasons.

First, it represents a trend away from technology-based approach to RFID and toward a solutions-based approach, one that involves multiple vendors coming together to solve a business problem. In this case, the solution was put together by Checkpoint Systems, Reva Systems, and Impinj.

The second is that the focus isn’t on cases and pallets, the area where RFID first showed up in the supply chain, but on individual items in a retail store. And it’s not just high-value items, like expensive men’s suits, according to Bill Colleran, president and CEO of Impinj, which is providing the Gen 2 tags that will be used.

“Galeria Kaufhof is going to take everything in the menswear department, right down to the socks, as part of the pilot,” Colleran says. “After the pilot, they’ll evaluate the data and determine whether it makes sense to tag everything, or to simply tag high value items.”

RFID for the customer
How, then, will the solution work?

According to Colleran, METRO will add individual tags to all inventory headed for the men’s department at the distribution center. The tags can be used for receiving and putaway on shelves and racks.

In addition, METRO has installed smart shelves with built-in RFID readers that monitor the merchandise on the shelves. “In certain areas of the men’s department, there’s a flat panel screen that will tell you everything that’s on that shelf,” says Colleran. “That way, you don’t have to sort through everything only to find out the size you’re looking for isn’t there.”

RFID readers and flat panel screens have also been installed in the changing rooms. In part, they’ll be used to keep track of all the items a customer brings into the room. Down the road, the system will also be used for cross-selling. Try on a blue suit, and the panel may display a shirt and tie combination to go with it.

Improving operations 
The solution will also be used to improve store operations. For instance, bar codes will still be used at the checkout counter. But METRO has installed RFID readers to run in parallel with the traditional system. That will be used to assess whether RFID will speed up the checkout process.

On-site RFID printers can be used just like bar code label printers to create smart tags for items that aren’t tagged at the DC. The store is also equipped with handheld RFID readers. That will enable associates on the floor to quickly take inventory. More importantly, they can use the readers to quickly find an item in a particular size, style or color if a customer can’t find it on their own.

At the end of the day, the pilot will demonstrate how a department store fully equipped with RFID might work, from the shelf to the checkout counter to the DC.

“While it’s different than how we may have originally envisioned RFID, it shows that there may be benefits from RFID other than supply chain efficiency that will justify the ROI,” says Colleran.

The pilot at Galeria Kaufhof is expected to last for several months.