RFID in Retail: Case Studies

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RFID in Retail Case Studies

• DISC 4397 Section 12977
• University of Houston
• Bauer College of Business
• Spring 2007
• Source Loebbecke, 2003 Modernizing Retailing
  Worldwide at the point of sale MISQE.
• Chappell et al. 2003 Auto-ID in the Box The
  Value of Auto-ID Technology in Retail Stores,
  Accenture whitepaper

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Value of RFID in Retail

• Product receiving
• Improved efficiency (currently manual)
• Improved visibility (currently assumed receipt)
• Maintaining shelf stock
• Accenture has estimated that 33 of out-of-stock
  items are actually in the store
• Maintaining product freshness
• Reducing check-out labor

Source Accenture, 2003
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Value of RFID in Retail

• Reducing shrink/theft
• Besides EAS, can alert for suspicious behavior at
  shelf
• Couple with surveillance cameras for high value
  goods
• Returns and warranty authentication
• Tracks history of the item
• Recalls
• Currently have to manually locate all items of
  the Stock Keeping Unit (SKU)

Source Accenture, 2003
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Case Study Metro Group

• Worlds fourth largest retailer
• Headquarters in Duesseldorf, Germany
• Employs 240,000 staff in 28 countries
• About one-half its revenue comes from food
  retailing.
• The Metro Groups Future Store Initiative

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Metro Group

• In 2002, started initiative to exploit potential
  of content integration
• Aims
• Provide more individual information and service
  offerings to shoppers
• More effective process and communication
  functions to Consumer Packaged Goods (CPG)
  manufacturers
• Define new international standards for retailing,
  supporting the modernization process of the
  industry on a sustainable basis
• Challenge
• Tradeoff between competency-based islands and
  integrated solutions

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• Test bed Rheinberg, Germany

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Metro Group - Content Provision Devices

• Personal Shopping Assistants (PSAs)
• Attached to shopping carts customers
  automatically given a proposed shopping list
  based on previous purchases
• Customer can modify list prices displayed
• A running total maintained of items, scanned and
  placed in cart
• Customer Cards
• Attached to PSA. Repeat customers data
  maintained

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Metro Group - Content Provision Devices

• Intelligent scales
• Equipped with camera identification software
• Customers put item on scale
• Based on structure, size, color, thermal image,
  item is recognized via optical identification,
  weighed, and the label is printed.
• Scale is linked to checkout counter via stores
  LAN
• Checkout
• Checkout via PSA Total calculated while
  shopping. Customers initiate a Pay Go process
  data transferred wirelessly from PSA to checkout
  server
• Self-checkout
• machines with touch screens, scanners and payment
  terminals
• Items scanned across a 360 degree scanner to
  register
• Items then placed in a bag weight compared to
  calculated weight of scanned goods

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Metro Group - Content Provision Devices

• Information terminals
• Offer PSA functionalities w/o customer card
• Provide comprehensive information about selected
  products meat, wine, cheese, baby care,
  multimedia products, etc
• Ingredients, price, location in store
• Show alternative/ equivalent products recipe
  recommendations
• Samples of CD and DVD video clips available
• Map of store available information can be
  printed
• Electronic Advertising Displays
• Centrally controlled by the stores WLANs
• Show images and video animations on 19 screens
  attached to the ceiling specials on products in
  vicinity
• Larger plasma screens in drugstore, detergent,
  and snack areas run promotional videos or product
  demos from database communicated via the WLAN

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Metro Group - Content Provision Devices

• Everywhere Displays (May 2004)
• Proposed by IBM
• Turn any surface walls, shelves, floors into
  a virtual, interactive touch-screen computer
• Use a combination of projectors, rotating
  mirrors, video cameras, and software project
  images to surface react to customer responses
• Shoppers touch surface as if interacting with a
  touch-screen computer
• Used for digital merchandising show ads/ promos
  without the customer having to interact with
  display
• E.g. Project directions arrows on floor lead
  customers to the exact location of the wine they
  choose on an Information terminal

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Metro Group - Content Provision Devices

• Electronic Shelf Labels
• Directly connected to price administration system
  and checkout system via WLAN
• 37,000 labels have liquid crystal displays in 4
  sizes
• Each label has a battery, a radio receiver, and a
  tiny receiving antenna. Battery used to change
  information last 5 years
• Personal Digital Assistants (PDAs)
• Handed to employees to check stock levels in
  central merchandising management system
• Can change electronic advertising displays, send
  and receive emails
• Coupled with RFID readers, can carry out
  real-time inventory checks as they walk through
  the aisle.

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Metro Group - Infrastructure

• Structured data sources
• Checkout system
• Merchandise management system
• Unstructured input data
• Picture and product databases owned by producers
  and marketing departments
• Data outlets PSAs, PDAs, electronic shelf
  labels, intelligent scales
• Content integration platform Pirobase Content
  Bus
• Real-time integration to complement the existing
  WLAN, Ethernet, barcode, EDI, and RFID
  infrastructures

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Metro Group - Infrastructure

• Pirobase content bus
• Runs on application server between data sources
  and output formats
• Meta-data repository
• Extracts content from individual applications and
  respective data sources and supplies to output
  formats in real time
• Output formats are decoupled from individual data
  sources
• RFID
• Item-level tagging for front-end content
  integration
• Smart shelves inform staff when items need to be
  replenished
• Recognizes expired items

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Customer Benefits

• Individuality
• Reliability
• Convenience
• - See paper for statistics

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Additional resources

• http//www.microsoft.com/presspass/press/2004/jan0
  4/01-12metrogroupfuturepr.mspx -- Microsoft
• http//www.ti.com/rfid/docs/news/news_releases/200
  5/rel06-13-05.shtml -- Texas Instruments
• http//www.internetretailer.com/internet/marketing
  -conference/17341-checkpoint-systems-becomes-techn
  ology-partner-metro-future-store-initiative.html
  -- Checkpoint Systems
• http//64.233.167.104/search?qcache7338do26Qu4J
  newsroom.cisco.com/dlls/Future_Store_InitiativeQA.
  pdfmetrofuturestoreinitiativehlenctclnkcd
  5glus Cisco
• http//www.metrogroup.de/servlet/PB/menu/1048850_l
  2/index.html -- See video on Future history of
  RFID
• http//streaming.mgi.de/metro/Virtueller_Rundgang_
  VR_8-1_DSL.asx -- Future Store Video

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Source Accenture, 2003
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Silent Commerce

• Silent commerce creates and captures value by
  deploying intelligent, interactive objects and
  machines that communicate with one another
  without human intervention
• Enabled by technologies ranging from global
  positioning systems (GPS) to radio frequency
  identification (RFID)
• Accenture (2002) believes that while eCommerce
  transforms how people communicate within and
  across firms, the intelligent interaction enabled
  by silent commerce between machines, parts,
  assemblies or any other item in any value chain
  is potentially as revolutionary as the Internet
  and World Wide Web