Subject: [NEXTEL-1] Benetton Distances Itself from RFID Technology

From: Marcel <[email-masked]>
Date: Tue, 08 Apr 2003 14:00:22 -0400

Benetton Distances Itself from RFID Technology

The Benetton Group released a statement last week assuring consumers that it
would not use radio frequency identification (RFID) tags in any of its clothing.
In
mid-March, Royal Philips Electronics said that Benetton would use its RFID
chips in its Sisley brand clothing. The chips would contain information relating
to
the style, size, color and intended store destination of items of clothing,
improving Benetton's inventory control. Some privacy advocates were concerned
that the technology could lead to unauthorized customer monitoring. One group,
Consumers Against Supermarket Privacy Invasion and Numbering, called for a
boycott of Benetton products until the company abandoned plans to include
RFID chips in clothing. RFID technology is a prominent part of the personalized
service provided at the high-tech Prada store in Manhattan. It provides the
sales
staff with up-to-the-minute inventory information, as well as data on customer
preferences. Other companies considering using RFID for inventory control
include Walmart and Procter & Gamble.

'Step Back' for Wireless ID Tech?

By Elisa Batista

Story location: http://www.wired.com/news/wireless/0,1382,58385,00.html

02:00 AM Apr. 08, 2003 PT

In a move that may have brought unwanted attention to a burgeoning industry,
Italian clothing maker Benetton Group said it has
not embedded any radio frequency identification tags in any of its clothing.

The group was responding to recent press reports that the company planned to
incorporate radio frequency identification tags
-- wireless transmitters the size of a grain of sand -- into the labels of its
clothes to track garments worldwide.

While the company did not rule out using the or RFID tags at some point for
inventory purposes, its statement late last week
raised eyebrows in the industry. In the release, the company seemed to go out of
its way to assure customers that the tags were
not in any of its clothing, including the Sisley brand.

"Instead of providing answers, they backed out of the deal," one industry
analyst said of the unexpected announcement. "It is a
step back for the RFID industry."

Like a few other industry insiders, the analyst did not want to be named. Some
were concerned that the media had spread
misinformation about how RFID tags really work, pushing Benetton to hastily
release its statement.

About two weeks ago, Dutch semiconductor maker Royal Philips Electronics said it
would provide the chips to power
Benetton's RFID system, igniting a barrage of media coverage speculating how the
technology would be used. Benetton said
the chips' sole purpose was to track its clothes, although privacy advocates
feared it could be used to locate customers and
market to them.

After one consumer group called for a boycott of Benetton clothing, the Italian
company issued a statement on Friday retracting
its plans and distancing itself from Philips.

"Benetton states that no suppliers, direct or indirect, of the above-mentioned
technology have any company or financial links
with the Benetton Group and that any relations with these companies are
exclusively of a commercial nature and for the supply
of services," the company said in the statement.

Both Benetton and Philips did not immediately return phone calls requesting
comment.

But to the chagrin of privacy advocates, Benetton did not definitely retract its
plans to install the technology.

The groups say the industry in general hasn't done enough to educate the public
on the possible abuses for RFID tags.

Designer clothier Prada currently uses RFID in its Manhattan flagship store.
Prada said the system is based on a central
database that salespeople access using wireless handhelds. The RFID-enabled
handhelds give salespeople up-to-date
inventory and customer information. Additionally, the devices serve other
purposes: They read RFID tags on customer cards
and products. The handhelds also control video displays throughout the store to
personalize the shopping experience for Prada
customers.

At the flagship store, any article of clothing a customer places in the dressing
room is automatically registered and displayed on
the closet touch screen. From that screen, the customer can request certain
products as well as alternative and complementary
items, all of which are stored in a Web account the customer can refer to later.
The dressing rooms even contain a video-based
"magic mirror" that shows the customer's back as well as a delayed replay of the
customer turning around.

What concerns privacy advocates about RFID is that stores like Prada can keep so
much information about customers --
including images of them wearing their favorite clothes. Some people fear the
technology could be used by, for example, law
enforcement agents. Privacy groups also imagine a Minority Report-style
scenario, in which store shelves talk to consumers,
pestering them to buy more products.

"The two possible worst applications for this are clothing and transportation,"
said Katherine Albrecht, founder and director of
Consumers Against Supermarket Privacy Invasion and Numbering. "It takes away
from your right to move about
anonymously."

Albrecht's group, CASPIAN, has called for a boycott of Benetton products until
the clothing designer either renounces RFID
altogether, or warns customers if and when the chips would be embedded in its
clothes.

But Albrecht's efforts may fall on deaf ears. Retailers seem to be sold on RFID
as the future of inventory management.
Benetton, Walmart and Procter & Gamble are but a few of the companies
experimenting with the technology.

These companies say RFID technology allows clerks to scan entire boxes of
merchandise from up to five feet away, while
bar-code scanners are limited in reach and can only scan one item at a time.

Stores can also crack down on theft because dressing rooms, store shelves, doors
and other areas throughout the store could
be equipped with RFID scanners that keep track of the items as they move through
the store. The chip itself wouldn't be visible
to consumers.

Procter & Gamble, which is currently testing the technology in bulk for
inventory purposes but hopes to have the tags on
individual consumer products by 2005, said it loses $50 billion a year to theft
and other "shrinkage" costs.

"Oftentimes, what we wind up with is tons of inventory, but of the wrong stuff,"
said Procter & Gamble spokeswoman Jeannie
Tharrington. "(RFID) allows us to see what consumers are purchasing so that we
can adjust to meet consumer demand more
accurately."

Tharrington said she could see the company develop "consumer applications" for
the system "eight to 10 years down the road."
But she quickly added, "We are not going to use any data we get from that to
infringe on anyone's privacy.

"Privacy is very important to us."

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