Will You Be Pinging Your Inventory Any Time Soon?
Posted on | April 1, 2006
Written by | Ian Griffith
There was a vision of the future of wine retailing at this year’s National Retailers Federation NRF convention. A demonstration Wine Cave by IconNicholson presented prototypes of a technology with great potential to improve the operation of liquor stores. In this demo Smart Shelves could identify a bottle on display and presented product information on digital signs. Shoppers could place their selection on a Hot Spot and a touch screen monitor would guide them through product reviews, related recipes, and promotions. Self Checkout stations were located nearby that would accept a tap from a PayPass enabled credit card. The common technology in all these examples is RFID, a tiny chip that lets you “ping” your inventory.
Radio Frequency Identification RFID combines a product code with a radio transmitter and antenna. This tiny chip can respond to a signal, or “ping”, from nearby receivers to announce that it exists. The product code can then be linked by the Internet to any previous entries for this item, which could include the production batch and bottling date, shipment date, transportation route, and storage location. RFID enabled Smart Shelves and Hot Spots suggest some nifty features for consumers, but the real payoff will be in inventory control. Imagine having receivers throughout your storage area and shop floor; you could take an inventory every hour and locate products with little effort.
As it did with UPC codes, Wal-Mart is driving adoption of RFID by mandating compliance from its top suppliers, including some in the wine and spirits industry. Wal-Mart expects to use RFID to unload the 7 tractor trailers that arrive at its stores every day with maximum efficiency. There are examples of wineries using RFID to track barrels of wine, or in the vineyard to transmit sensor information about temperature and humidity change. Tracking cases and individual bottles is a new opportunity made possible by cheaper tags. As prices drop below 25 cents it will become feasible to track every case and higher priced bottles.
Wineries have begun experimenting with smart labels that contain an ultra-thin RFID tag. Also, an Italian manufacturer is already selling RFID enabled synthetic corks, and is preparing to launch a natural cork with embedded RFID. Before long you may receive delivery of RFID enabled bottles that, for the moment, will sit silent on your shelves. Before you can ping them you will need equipment to read the tags, and software and hardware to process the signals from the thousands of products shouting “I’m here!”
High volume discounters that specialize in mainstream brands are well placed to benefit early from this technology. If RFID adoption by wineries mirrors the current use of UPC codes, stores with more esoteric products will probably pay a premium for tagging their bottles and cases by hand. Reusable tags will cost a little more as will smaller volume purchases. However, there is a suggestion that premium wineries may adopt RFID as a provenance guarantee and protection against fraud.
To be sure there are still many lessons to be learned before the bottles on your shelves respond to a ping. For instance, strategies for improving the read-rate of tags need to be developed as liquids will tend to absorb or reflect radio waves. But, as costs come down, your inventory will gradually become interactive and the goal of inventory control will be much more attainable.