Subject: [NEXTEL-1] Supermarket tunes into wireless

From: [email-masked]
Date: Tue, 19 Aug 2003 03:05:42 -0400

Supermarket tunes into wireless

Tuesday 19 August 2003

German supermarket chain Metro is researching how wireless technology
can boost retail.

The collection of technology in Metro's Future Store initiative aims
to boost store efficiency, enable targeted marketing and cut long queues,
among other things. The Future Store is an experimental store, but it is one
that involves real customers using real technology in real time. It is run
by the fifth largest retailer in the world, with 2,300 stores in 26
countries and sales of ?51.5bn in 2002.

Even hardened retail technology executives admit that the prospect of
testing and refining multiple technologies in a genuine retail setting is
enough to make their hearts pound.

"This is a very unique IT retailing experiment, and we're glad to be a
part of it," says Dimitris Nikolatas, product manager of Cisco Systems.
Cisco is providing a huge chunk of the hardwired and wireless IP
infrastructure, including a content delivery platform that broadcasts audio
and video content and data from a central source to any number of delivery
points.

Of all the technologies being tested, two stand out: wireless and
radio frequency ID (RFID). In one way or the other, the two are linked to
just about every new technical gadget being tested in the store.

The entire 4,000 sq ft building is covered by a wireless Lan based on
the 802.11b standard. The network links all mobile devices, such as personal
shopping assistantsPSAs)  and PDAs (personal digital assistants), and some
stationary devices, such as electronic shelf labels (ESLs), check-out points
and flatscreen displays for product promotion.

The PSA is a mini-computer attached to the shopping trolley and linked
directly to the Wlan.  Manufactured by Wincor Nixdorf International, the PC
includes a touchscreen with integrated scanner that allows shoppers to scan
their own purchases for quick payment at the checkout. Purchase data is
transmitted over the Wlan to the checkout terminal, where shoppers give the
assistant their reference number assigned by the PSA and pay without having
to handle any merchandise.

Store employees are equipped with PDAs. The Future Store is testing
Hewlett-Packard's iPaq 5450 and 3970 models as well as Symbol Technologies'
PDT-8100. The handheld devices run Microsoft's Windows Pocket PC operating
system.

Linked to the Wlan the PDAs allow employees to check inventory or
reorder goods by directly accessing Metro's merchandise management system at
any time and any point in the store.

The next phase of development calls for the PDAs to receive "soft
phone" functionality, enabling staff to make calls in addition to sending
messages or downloading information. The service will be based on VoIP
(voice over Internet Protocol) technology, as are all other hardwired and
wireless in-store communication systems.

While ESL technology has been around for almost a decade, its
prohibitive cost in the past had prevented widespread use.

Almost all products in the Future Store have electronic labels. These
labels receive price information directly from the merchandise management
system via the radio network using base stations located in the ceiling.

Price information is transmitted simultaneously to the shelf and
checkout to avoid price differences resulting from erroneous labelling. The
price labels are equipped with an easily legible digital LCD, battery and
radio receiver.

Plasma advertising screens, serving as either a complement to or
replacement for classic print advertising, offer multimedia information,
including videos, about products. Linked to the Wlan, the displays allow
product promotions to be steered quickly and selectively from a central
point.

Certainly, one of the most talked about technical novelties of the
Future Store is RFID. It is a technology high on the priority list of Metro
and other big European retailers, such as Tesco in the UK and Carrefour in
France, not to mention the European Central Bank (ECB), which is struggling
to stem the flood of counterfeited euro notes.

But RFID is also deeply criticised by privacy advocates such as
Consumers Against Supermarket Privacy Invasion and Numbering (Caspian). They
worry that such technology could create an Orwellian world where sales
assistants or, worse, police officers or security guards, could read the
contents of a handbag with the wave of a wand. Consumer concerns about RFID
have prompted one of the biggest names in the retail world, Wal-Mart Stores,
to scale back its ambitious plans for deploying the smart tag technology.

RFID systems have come a long way from their origins in the World War
II when the US government used transponders to distinguish friendly aircraft
from enemy aircraft. Today they are being used, albeit in limited numbers
because of the cost of manufacturing the chips, for delivering packages,
handling luggage and monitoring highway tolls.

A typical RFID tag contains a computer chip and an antenna. Unlike
barcodes, which need to be scanned manually and read individually, radio ID
tags do not need line-of-sight reading, so hundreds of tags can be read in a
second.

Moreover, when stimulated by a radio signal, the chip transmits a
unique code to identify whatever product the tag is fixed to. This unique
identifier carries not only the product's universal product code (UPC) as
barcodes do now, but also gives that particular item its own unique
identity. For example, instead of a bar code saying: "This is a box of Brand
X detergent", the RFID chip says: "This is box number 12345 of Brand X".

If the difference is subtle, the impact is huge. A retailer could
quickly trace and remove a bad lot of canned goods.

Metro is using two types of RFID technology in the store: one operates
at the 13.65-MHz high frequency range; the other uses the 900-MHz to
1000-MHz  UHF (ultrahigh-frequency)  band. The high-frequency RFID
technology is used to track individually tagged items within a 1.5m range
inside the store. The UHF version tracks pallets and boxes, and can read at
a distance of up to 7m. Philips is supplying both systems.

One new system being tested in the Future Store and involving RFID
tags is the "smart shelf". Tagged items are located on shelves with embedded
readers that communicate with the merchandise management system via the
Wlan. The shelves automatically recognise when tagged goods are removed or
replaced, and report the movement of goods to the system. A big advantage of
the system is that shelves automatically trigger requests for fresh
supplies.

In addition to tracking goods, RFID technology allows shoppers in the
entertainment section to swipe tagged music CDs on a system that plays a
music sample from the disc.

Another RFID application under testing is delivery. Pallets and boxes
are tagged at Metro's distribution centre in Essen and recorded as they pass
through a gate in the Future Store. The system is designed to provide
real-time information on warehouse shipments and shop-floor inventory
levels.

Gerd Wolfram, project manager of the Metro Future Store admits that a
huge challenge, admits is managing the data generated from the movement of
tagged products from delivery and stocking to selection and payment. SAP is
testing an RFID inventory control system aimed at connecting every piece of
RFID technology to the enterprise. Technology to crunch these numbers is
being provided by Intel which, together with SAP, is a principal technology
partner behind the Metro pilot.

If and when RFID tags replace barcodes, Metro foresees PSAs and
checkouts being equipped with tag readers. Readers integrated in the PSAs
would automatically register what shoppers have in their carts. For those
shoppers preferring not to use the PSA, purchases would be automatically
recorded by checkout gates equipped with readers.

Of the Future Store's 40,000 products, only around 30 carry individual
tags, including razor blades from Gillette, cheese from Kraft, shampoo from
Procter & Gamble and some CDs.

The day when radio ID tags push barcodes completely to the sidelines,
however, could be several years away, warns Wolfram. "The current chips cost
between 30 [euro] cents and 60 cents," says Wolfram. "For us to deploy RFID
chips economically, the price will have to come down to around two cents."

Chips based on plastic rather than silicon could be the answer, says
Joachim Pinhammer, director of marketing of retail systems at Wincor
Nixdorf. "Polymer could certainly help drive down the prices, but the use of
this material for miniature chips still requires some research."

Infineon Technologies is one of several chip makers conducting
research on plastic chips. Last year researchers at the company succeeded in
integrating plastic electronic circuits on commercially available packaging
film.

"This technology could certainly be an alternative, but one of the big
challenges will be to develop equipment that can print chips economically on
packaging materials," says Günter Schmid, a research director at Infineon.

"The problem is, printing companies don't know a whole lot about
circuits and chip makers aren't familiar with printing. But I'm pretty
confident that we'll find a solution on this front."

If the price of manufacturing RFID chips is a concern now, the issue
of privacy could prove a potential drawback in the long term. In April,
fashion retailer Benetton Group postponed plans to roll out RFID tags in one
of its clothing outlets, following protests from privacy groups. Philips has
responded to these growing fears by implementing a new feature into its tags
that disables them at point of sale.

Earlier this summer, Wal-Mart caved to protests and pulled
radio-tagged items out of the store piloting them, saying that it will now
focus its RFID efforts on the supply chain. In response to consumer
complaints, Gillette is also saying that its use of RFID tags is to improve
SCM efficiency, claiming its focus is on tracking pallets and cases and not
customers.

Metro is aware of the privacy concerns linked to RFID, says Future
Store guru Wolfram, and will do what is necessary to ensure that consumer's
privacy rights are not violated. But the company, he is quick to add,
recognises the huge benefits of this technology - for consumers and
retailers alike - in terms of service and cost.

So far, Metro's Future Store has generated far more favourable buzz
than negative. It helps, of course, when a group of industry heavyweights
throws its support behind such a store and, perhaps even more, when German
model Claudia Schiffer, a native of Rheinberg, stops by to shop.

John Blau writes for IDG News Service

http://www.computerweekly.com/articles/article.asp?liArticleID=124242&liFlavourID=1&sp=1

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