iXtenso has talked with Andreas Löw, Marketing Director for Feig Electronic, about this subject. The company develops RFID components for a number of application areas, among them shop floor and supply chain management.
Mr. Löw, what practical advantages arise from the use of RFID technology at the point of sale for retailers?
I would differentiate between the advantages for retail in general and those specifically at the POS. Labeling products with RFID transponders makes continuous inventory and subsequently the optimal availability of all products in a store possible. Protection against theft is increased by the fact that you don’t just know that something is being stolen, but also exactly what it is. This makes the detection of a theft and the search for it afterwards easier. Finally, the use of RFID increases protection against plagiarism through early identification at the incoming goods inspection.
Directly at the POS, meaning the checkout, RFID ensures faster payments and thus higher turnovers, especially at peak hours. This is made possible by the use of contactless credit or smart cards. And girogo, the contactless payment functionality by the German credit services sector should be mentioned here. In this instance, you can pay up to a predetermined amount (generally around 30 Euros) without entering a PIN or signature “as you are walking by”. This ensures a faster shopping experience for customers and higher turnovers for retailers as well as lower costs due to less cash handling.
How is RFID being used in logistics?
RFID is being used in numerous places within the entire logistics and supply chain – from primary production all the way to proper disposal. The most popular functional areas of transportation, turnover, consignment sales, packaging as well as control of production processes count as the most popular applications within logistics.
What advantages does RFID technology offer compared to barcode labels?
The advantages of RFID technology compared to barcode labels really show when it comes to the already mentioned areas of operation of logistics. These advantages are primarily the insensitivity of transponders against dirt or moisture as well as their bulk capability. Whereas barcodes are being individually processed and also require a “direct line of sight” with the scanner, RFID transponders can be identified in bulk (depending on the frequency used, up to several hundred pieces), even through packaging.
Are there retailers that already rely on RFID on a large scale?
The Gerry Weber project has ensured that numerous RFID applications are now in use especially in the textile retail business. Generally, however, it is difficult for us as a component supplier to name concrete application examples. Feig Electronic exclusively sells to system integrators and distributors and not to end users.
In the debate about a nation-wide introduction of RFID in retail, concerns about data protection especially from the customer’s point of view are still a major focus. How can you guarantee that no sensitive customer data is being collected and used?
Data protection is crucial! As individuals we only want to reveal as much data and information as are necessary for the respective event in every aspect of life. We all know unauthorized data collectors from the social media sector. There is no place for data theft and unauthorized setting up of profiles within the realm of reputable RFID technology! In this connection, I would like to point out the PIA framework. PIA stands for ”Privacy Impact Assessment“ and clarifies the fundamental procedure for compiling a data protection impact assessment in companies that want to launch RFID applications. This inspection of the impact on data protection due to RFID use is strongly recommended by the EU. In Germany, the Federal Office for Information Security (BSI) as well as the AIM Association for Automatic Identification & Mobility have accepted this recommendation and prepared five different detailed procedures for the applicable review. Since 2011, AIM Germany has offered numerous workshops on this subject for its currently more than 120 members, resulting in great feedback. This demonstrates the clear interest in data protection by the RFID industry.
RFID is not just useful for labeling, contactless payment is also a possible application. How can the safety of transmission be ensured?
Contactless payment will become the norm over the next few years. Since credit card providers have already made contactless payment possible for years now, its use in Germany is experiencing a special dynamic thanks to the girogo project. Until the end of 2013, more than 40 million of these girogo bankcards are scheduled to be in circulation. With the girogo method, the safety of transmission is particularly ensured, since it is based on a so-called public-key infrastructure (PKI).
How do you assess the future development in terms of RFID use in retail?
We see the development of contactless payment as very positive. The new German ID-card (nPA), ePassport, eTicketing, eMobility, ePayment – today’s modern world is unimaginable without the “e“. Wherever RFID technology is noticeably useful and current safety standards are being implemented, RFID will be accepted or has already been accepted.
RFID use in retail in general is currently particularly shaped by the textile industry. Of course, we are also not able to predict which retail areas will be able to follow this example. By now, the use of RFID in the background, meaning the use of this technology in warehouse and distribution centers, consignment sales or manufacturing has become standard.
Interview: Daniel Stöter iXtenso.com
