Running a grocery store is complicated. There are thousands of items that move in and out rapidly, many with a shelf life of only a few days and many with a value and a size that make for perfect shoplifting prey. To make a go of it, you really have to know where all that stuff is and how much of it you have. Until the mid-1970s, that meant closing down for a day or so every month and manually counting everything in the store.
For decades, retail wonks had been tooling away at an alternative that would automate the checkout process and manage inventory at the same time. They knew that it would have to involve some kind of labeling computers could read, and that the system would have to make life easier for cashiers. After blowing through all kinds of curious symbols—bull’s-eyes, starbursts, exotic machine-readable characters—they finally settled on the bar code, a series of thick and thin stripes first suggested in the late ’40s.
In 1973, IBM refined bar coding into the Uniform Product Code, a system that captured all the information a grocer of the day needed and did so economically and reliably. It carried the day because it could be read from any angle—even upside down or backward—and from a variety of distances, was cheap to print onto labels and didn’t require a lot of printing accuracy. Most importantly, the timely arrival of affordable lasers and the integrated circuit promised a payback of two and a half years. The grocery world was sold, and deployment began.
The first item ever scanned into a UPC checkout system was a 10-pack of Wrigley’s Juicy Fruit chewing gum on June 26, 1974, an event that seemed so all-fired important that grateful supermarket owners had the gum sent to the Smithsonian. With a little nudge from first the U.S. Defense Department and then Wal-Mart, the effort to convert retail to the UPC began to bear fruit. By the mid-’80s, more than half of all retail outlets had scanners, despite an average cost of $250,000 per store.
Now, of course, bar coding is ubiquitous, so much so that word processors come loaded with bar code fonts and even such late adopters as law firms use bar codes to track files and computer equipment.
If you’ve run a marathon lately, you were likely given a little device, called a ChampionChip, that you wore on your shoe. As you started the race, you ran over a mat that sensed the little device. At the finish line, you ran over a second mat that again sensed the device. You had just been automatically and very accurately timed; two hours later, the results were available on the Internet. It’s a fine innovation in athletics that has helped fuel the boom in citizen racing.
These Radio Frequency Identification tags were first developed about 10 years ago. And you’re about to see a lot more of them (or at least hear a lot more about them—they tend to be pretty hard to spot), especially as prices collapse from the current 50 cents per RFID in 2003 down to a nickel by the middle of next year. Backers predict an RFID revolution when the price gets below a penny.
RFID tags are uncomplicated: a microchip and an antenna. RFID readers emit a field that triggers a stream of data from the tag back to the reader. What makes RFID such a compelling new development is that it permits the wireless tracking of nearly everything, including people. Every inventory management scheme, package tracking system or business process will be revised to take advantage of this new technology.
Where RFID tags will really touch us first, however, is in retail. Earlier this year, Gillette bought 500 million RFID tags for its shaver packaging, the idea being to track shavers in exquisite detail right through the supply chain. Wal-Mart has muscled 100 of its top suppliers into committing to RFID capability by 2005; every other major retailer is poring over plans to do the same thing. Why? Electronic Product Codes, the successor to the now 30-year-old UPC specification.
The UPC worked well for its day, but it’s running out of steam. The most serious problem is that the 12-digit code that underpins the UPC system has been pretty much used up. But just as significantly, managers want more information about the state of their inventory than the UPC can provide. The EPC has sufficient capacity to assign a unique number to every molecule on earth and can wirelessly read these codes—and a lot of other information—right through packaging. So not only can the EPC assign a unique ID to each individual product item (like that can of Coke), it can also conceivably tell you where each item is. That would pretty much kill off shoplifting as a productive pursuit.
The EPC would also give retailers a wealth of information about consumer habits, and that’s turning out to be the rub. Rarely has a new technology sparked such a privacy furor. The Electronic Privacy Information Center has sent out alerts about proposals to include EPC tags in Michelin tires and the fabric of Benetton clothing. There is even a move to insert RFIDs into the very fiber of Euro bank notes. As the Center points out, so much for a consumer’s relative anonymity.
The overwhelming commercial benefits of RFID technology guarantee its use in the tracking of products and people. Whether RFID tags loaded with information become a tool of pervasive monitoring remains to be seen. But if ever there was a technology that could keep tabs on the citizenry and its habits, this is it.
Mark Tamminga ( email@example.com) practices law and fiddles with software at Gowling Lafleur Henderson LLP in Toronto. He is the coauthor of The Lawyer’s Guide to Extranets (ABA, 2003).