2015.02 | RFID self-checkout

IMG_8720For many years, retailers have heard about the benefits of RFID, and there has been little to no use of item level RFID to check out in a store.  On the weekend, I visited my local library with my family and had an opportunity to utilize the newly installed self-checkouts to check out our books.

Under the old system, all items had a unique barcode and an EAS security tag.  To check out an item, customers presented their books and library card to an attendant at a PC with a scanner.  The attendant scanned the library card to validate the customer’s identification, checked if there were any fines, holds etc, and then scanned all of the items to be checked out.  A receipt was printed and the
Photo 2015-02-09, 7 16 14 PM items were walked around a security gate at the combined entrance/exit, and handed to the library customer.  The security tags set off an alarm when they are near the gates, so the attendant passed them to the holder on the other side of the security gate.

Under the new system, there is no need for customers to interact with an attendant unless they have a fine, a hold, or some other intervention that goes beyond the simple checking out of an item.  The customer uses one of a few self-checkout terminals – which include PC and a scanner, but also a customer facing touchscreen, and an antenna in a pad on the counter.  The Photo 2015-02-09, 7 16 06 PMcustomer scans their library card, and if they have no fines or holds, they can then identify the items to check out.  To identify the items for borrowing, the customer places the items on the pad on the counter, with as many as three at a time piled on top of each other in a stack.  The antenna reads the tags in the books and shows them on the screen for verification.  The customer can validate that the items match, ensure any media inside the item matches the case, and complete the checkout with or without a receipt.

As the items are now considered checked out, the customer can walk past a gate with an RFID reader, and if the item they are carrying is checked out, no alarm will sound.  If an item has not been checked out and allocated to the customer’s card, an alarm will sound.

On the whole, the system worked very smoothly. While only recently installed, customers took to it and had little issue using it.  The library staff were helpful and encouraging for the few customers who did require assistance.

The RFID system was a good fit in the library for a number of reasons:

  • Even if RFID tags are more expensive than barcode labels and EAS tags, items are tagged once and then run through the system many times as they are loaned through their useful life, instead of being purchased once.
  • Most items in a library are flat and lend themselves to easy scanning on a pad like this.  There are rarely very heavy, bulky or oddly shaped items to be checked out.
  • Consumers are accustomed to self service from using it at ATMs, airports and retail self-checkouts so they recognize the paradigm of self service took to it well.
  • All customers are identified with an identity card.  No exceptions.
  • One attendant can now support many customers at a time instead of one, reducing wait times, and ideally enhancing the customer experience. If customers don’t wish to check out their own items, they can assist them easily.
  • Allowing customers to walk out the door with their own items without passing them around a security gate appears to provide better flow and a smoother checkout experience.  It also removes an underlying assumption of distrust implied by the gates and security system as previously configured.

The whole system reminded me of a question I had from a retailer at NRF who asked to see our RFID self-checkouts.  While I would personally like to see RFID checkouts in retail purely from a love of technology, it seems unlikely at present.  There are some differences between this library scenario and many retail environments from a checkout perspective:

  • It will be difficult to convince all the parties involved in manufacturing goods to move to item level RFID tags unless the retailer and consumer are willing to absorb the price.  The prices are getting lower and lower for the sort of passive tags needed for items purchased at retail.  Time will tell if it will be enough!  The big retailers will have to drive this adoption.
  • Implementing readers to read these tags instead of barcodes would require a replacement or at least an upgrade to current reader infrastructure.  An ROI is needed to change/add that infrastructure to include RFID readers.
  • While libraries have basic flat items, other retail environments have all sorts of uniquely sized and shaped items that may not lend themselves well to a standardized rfid reader environment.  For unusual items, a handheld RFID reader could be used, but if it was, what’s the difference between holding that RFID reader to a tag and scanning a barcode as is done today?  Not much.
  • Would there be a throughput advantage?  For smaller transactions, it is very unlikely.  Cashiers and even customers scanning themselves can scan a few items relatively quickly.  For smaller transactions, tendering is generally the longest part of the transaction and not the scanning.  For larger transactions, there may be some throughput advantage, but it would take time for retailers and consumers to develop the trust that the system would capture all of the items accurately.  Also, many customers like to validate their purchases and their prices as they are scanned.  Much of the throughput advantage of an instantaneous cart total could be lost by questions and validation afterward.
  • Weighable items would need to be either pre-packaged or separated for checkout.  Weighables couldn’t just be left in the cart for reading.
  • Unlike a library, the items that a consumer buys can’t be “checked out” as they are not unique in the store.  An antenna at the front of the store placed for security can’t identify items as valid to pass or not.  It’s unclear how security would work with RFID tags.  I’ve heard of more sophisticated and more costly RFID tags that can be de-activated on scan, but then what if a client changes their mind after the transaction or returns an item?  Does it need to be retagged?  How does one “print” a new tag for an item?  If RFID can’t be used for security, then EAS would be needed as well.
  • What about bulk items that are tagged with paper tags today?  What about low value and small items like greeting cards?

As with all solutions in a retail environment, there must be a benefit for both the consumer and the retailer for a solution to be implemented successfully.  It’s possible that the RFID self-checkout could get to that point if retailers can leverage the operational benefits on the back end first and push it to the front end.  Then it will take customers and retailers getting comfortable with wheeling a big basket of groceries up to a reader and taking that price as correct.

A lot of stars have to align for an RFID self-checkout to come our way, and if they do it will probably take some time.  Maybe next NRF.

2010.13 | Barcode of the Future?

There was a lot of press over the last week or so around RFID tags that can be printed onto packaging  using Carbon Nanotubes in the ink.  This is an interesting development in the world of scanning in retail, given our ongoing obsession with attaining the nirvana of checkout – the non-checkout – as depicted in the famous IBM “You forgot your receipt” commercial from the late 90s.

A few thoughts to consider on using item level RFID tags at point of sale:

Labelling Complexities – Considering the thousands of items for sale in today’s retail stores, expect a migration to RFID to take some time to complete.  For example, while marketers may think RFID means the end of unsightly barcodes, it will be necessary to have some sort of visual code or number on any item in order to allow for pricing in the event of a failed code or reader.  Not having a visual code to type in would cause bottlenecks at point of sale and customer frustration.   Another concern is how RFID readers will recognize items vs cases of items.   Cases of Coke generally have individually barcoded cans as well as a barcode on the case.  Barcodes are visual and the scanner can be directed at the code to ensure it picks up the case code.  Should Coke not put RFID tags on cans in cases?  How do we make the reader read the RFID tag on the case?  These are just two examples of many details that will require consideration.  This will take time and testing to complete.

Scanners – Current scanning technology won’t read RFID tags.  It will be necessary to change the scanning technology at the front end.  For customers with scanner/scales, there may be an upgrade path to avoid entire replacments and simplify a migration from barcodes to item level RFID.  The NCR 7878OFX  has space in the unit for a future RFID reader, allowing one scanner to read both barcodes and RFID tags.  In a grocery environment, a scale will still be needed, so using the current units as much as possible would be a big cost benefit.

Security  – Using RFID tags on every item would potentially eliminate the necessity of EAS tags.  An RFID reader at the door could validate whether an item has been purchased or not when it passes through the door.  It may be more effective in avoiding false positives (false alarms) at the store exit.  There is also the very reasonable concern of privacy advocates that those with readers could read what is in your bag – or even in your house depending on the tag.  There needs to be some sort of tag destruction protocol to avoid that concern.

Like any technology, there are some great upsides, but costs and difficulties must be overcome which will drive the feasibility of this technology out for some years.  I wouldn’t expect to walk through a gate and have everything scanned automagically either – for starters, metal carts mess with the reception, tags in the middle of cases of liquid don’t always read well, and most customers won’t want us weighing every customer to see how much their produce weighs.   Given these issues and the concern around privacy (remember RFID passport hacking?) I don’t believe this will catch on any time soon.  Simplicity and cost are key and this solution isn’t there yet, but I look forward to new developments that could make it happen.

2009.36 | Changing Approaches

The Fitting Room – LA retailer Metro Park is using the fitting room as a point of differentiation, making a potentially painful interaction- trying on a new garment – something that makes customers feel special. To take this a customer experience enhancment further, St Clair Interactive has a solution that allows retailers to understand what customers didn’t buy. Items are scanned prior to entering the fitting room, and then retailers can look for patterns in what customers left behind as well as in what they bought. Having that understanding can improve suggestion making in the store, allow for adjusted stocking practices, and help understand individual customer behaviour for loyalty card holders.

The Supply Chain – Retailers and manufacturers are always looking for an opportunity to drive out cost and ensure that the merchandise consumers want is in store. While the parameters considered are quite extensive, Tesco is taking it a bit further by incorporating weather into their calculations.

Checkout – Item level RFID had some great results at a Bloomingdales study last month. Interestingly the comments indicate that while the inventory savings are wonderful, there may be a greater opportunity for consumer benefits in leveraging RFID – help finding items, immediately provide details on size and colour, suggest coordinating items by scanning them and many more.

In Aisle – With the costs of technology going ever downward, expect to see more interactive solutions within the aisles as you shop. The costs and functionality of price verifiers and kiosk platforms are crowding ever closer, making the only obstacles a good interactive program and the operational support to make it happen. Expect the usual lack of knowledgeable staff to be replaced by viable useful technology solutions.

2009.33 | Item Level RFID

RFID has been touted as the future of retail for some time now. Item level tagging certainly seems a long way down the road, given the usual challenges of change including issues like RFID tag costs, altering the supply chain, and engineering changes to store operations.

American Apparel is making an attempt to leverage RFID in the store, and if it works, there are some interesting potential benefits given the right retail environment:

  • Simpler Inventory Management – Cycle counts are more automated and faster, providing more selling time and less administrative time for store staff.
  • Shrink Reduction – RFID could prove more effective than EAS technologies, given the potential to allow an exit gate alarm to go off only if an item has not been scanned. Instead of scan and de-activate, an item needs only be scanned. The gate could even identify the specific item that has passed through the gate to staff.
  • Better Service in Store – Always knowing the sizes and colours on the floor and in the back is key to customer satisfaction.
  • Potential Loyalty Program Benefits – Having RFID readers in the store could allow Loyalty card holders to be identified by staff and accorded special treatment.

There are certain to be other benefits not yet considered, so let’s hope that the business case comes together for the technology.

2009.32 | Hacking Hackers

Hackers certainly keep life interesting with society’s increasing reliance on technology. One of the favourite activities of the hacker crowd is to find a security vulnerability of a particular solution, and showcase it to the world to prove their expertise.

Quite a cynical and negative lot, aren’t they? These can be frustrating situations for organizations who expend time and resources to build solutions to provide value to customers. The fact of the matter is that there is always going to be a way to break into something no matter how big a wall is built around it.

Apple recently fell victim to this scenario at the Black Hat conference where researchers (probably not hackers) revealed a security issue and had to quickly supply a security fix for the iPhone. An ATM company had the same issue back in June where a security issue was to be revealed at a conference by a hacker type. RFID enabled US passports have been under fire for being readable by unauthorized types. Even parking meters are getting hacked for free parking.

Is nothing sacred? In a bit of comedic justice, it seems someone (probably hackers) placed a fake ATM on the floor of a hacker conference where many of these great ideas are discussed. No word on whether anyone’s card number was stolen.

2009.01 | Shopping Science | Hema | Mobile Shopping

Welcome to the initiation of the Retail Techology Trends Blog.  My plan is to share a number of articles related to various items of interest; generally retail and self-service, but they may be about current trends, new ideas, or just intriguing articles that relate to the world of consumer interaction.

The Science of Shopping – The Way the Brain Buys– The Economist – This article discusses a number of ideas I’ve mentioned to many colleagues and customers in the past. Selling with other senses, using video, RFID you name it.   This document provides a great basis for discussions of new retail ideas.

Hema – This is a Netherlands based department store website. Click on this site, and leave it up for a while, and watch what happens. Retailers are constantly looking for a way to make themselves stand out. Here is an example.

Stores Clueless about Mobile Barcode Scanning Apps – iPhone has Snaptell, Google Android has ShopSavvy – two apps that you can use to price check across banners for the best price. They are in their infancy, but retailers need to catch up with these new mobile opportunities.

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