Bar codes have spawned a next-generation technology that uses radio waves to send information from labels to computers, and it’s a very big deal in what’s called the supply chain aspect of industry.
Radio-frequency-identification technology may strike most people as boring or, at best, just mildly interesting. But that’s because most people don’t have the vision of Paul Saffo, a California futurist who was in Chicago this week to address a trade show called RFID Live.
Rather than regarding RFID simply as a new way to keep track of merchandise, people should recognize it as an expression of the personal media revolution that is sweeping through society, Saffo told the crowd.
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“RFID makes physical objects into media forms,” he said.
That’s probably not what Wal-Mart had in mind a few years ago when it mandated that its largest suppliers start using RFID labels on selected product shipments.
Wal-Mart is using its clout to promote RFID, so that the technology soon will become as ubiquitous as bar codes. Wal-Mart’s expectation is that improved control over goods in transit will reduce shipping times and costs.
The first wave of Wal-Mart’s mandated compliance started in January with more than 100 suppliers.
Compliance among this group probably approaches 90 percent, said Larry Cinpinski, a vice president with Milwaukee-based Catalyst International Inc., which works with several firms on RFID issues.
Suppliers generally have invested the minimum needed to meet Wal-Mart’s mandate because RFID technology remains somewhat new and expensive, he said.
“RFID labels cost about 30 cents apiece on average,” he said, “which is way above the target of 5 cents.”
As more vendors embrace RFID, and volumes ramp up, prices will fall, and technology will improve, Cinpinski said. He believes vendors will begin incorporating the technology more deeply into their processes starting around 2007.
Eventually, the retail industry expects that all products will have RFID-tagged labels, which will enable customers to gather their goods and walk out of a store without stopping at checkout.
RFID readers will tally the merchandise and charge it to the customer’s account, much as I-PASS users drive past tollbooths without stopping.
Such work amounts to “doing old things a new way,” said Saffo, “but what’ll the new things be?
“Think about earlier media revolutions and the new products they created. From television we got TV dinners, TV trays, Veg-O-Matics and the George Foreman Grill. RFID tags will bring their own new consumer experiences.”
Saffo urged people in the industry to think beyond the obvious.
“You are building a weird new kind of media revolution,” he said. “RFID will make possible new companies that do things we don’t even dream about.”
Enticing bundles: Bundling TV, Internet and phone service is the goal of cable operators and phone carriers these days, and a new survey suggests that about a quarter of customers crave such bundles.
A survey by Ipsos-Insight found that a “triple play” bundle of service priced at $119 a month would entice about 25 percent of customers to change from their unbundled service.
Cable and phone operators seem to be on equal footing with such products.
Adding extra features like video-on-demand, digital video recorders and high-definition TV could prove vital for carriers that hope to gain an advantage over competitors, said Lynne Bartos, senior vice president with the market research firm.
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