innovate arkansas

The new year will bring a number of advances in the world of Radio Frequency Identification, University of Arkansas professor Bill Hardgrave said.

A chip introduced by Intel in 2007 could dramatically lower costs on RFID devices from handheld scanners to fixed antennas.

In its simplest form, an RFID system consists of a tag (attached to the product), a reader, one or more antennae attached to the reader and a computer to control the reader and capture the data.

The Intel chip, which costs less than $100, has 90 percent of most reader functionality on a single chip, said Hardgrave, who leads the RFID Research Center within the UA's Information Technology Research Institute.

Rather than construct the "guts" of a reader, manufacturers can take the Intel chip and only install input, output and power.

Handheld RFID readers that can instantly scan inventory currently cost a couple thousand dollars, Hardgrave said, but that could change dramatically as the Intel chip becomes more widespread.

"I really expect to see sub-$500 readers, maybe this year," Hardgrave said. "I really believe that it is going to drive down costs."

In a study originally released early in 2005 and updated twice since, Hardgrave's team discovered a 26 percent reduction in out-of-stocks at 12 Wal-Mart Stores Inc. locations that have deployed RFID technology compared to a 5 percent reduction in stores with no RFID.

Some items tracked showed a 62 percent improvement in out-of-stocks, Hardgrave said, and Wal-Mart continued its rollout of RFID to 400 stores in 2007.

"[Reducing out-of-stocks] is a huge benefit for the supplier," Hardgrave said. "We've also seen great uses for promotional items that are time sensitive. If it's not moving to the sales floor when the circular hits, we can notice it and get it out."

Other than prices coming down on RFID components, Hardgrave expects to see a furthering of item-level rollouts in apparel, footwear and consumer electronics.

Best Buy and Wal-Mart are conducting an item level test of 12,000 DVDs to study the benefits of RFID.

While most RFID deployed currently is at the pallet and case level, Hardgrave expects to see retailers go straight to item-level tracking on items like CDs, shoes and sport coats.

The 10- to 20-cent cost for RFID tags makes the cost benefit trickier at the grocery level, but can easily be absorbed into an item like a necktie.

Hardgrave's team is also testing "dynamic" price tags that can be changed with the click of a button. A store manager who needs to mark down an entire rack by 20 percent or change the sale price on a display only needs to point and shoot.

"Retailers spend millions on price management," Hardgrave said. "Not only can you scan this rack in five seconds, it is accurate."

Hardgrave said an upcoming study is modeling the benefits of temperature tracking tags that can alert a retailer if a case of lettuce gets too warm at some point along the supply chain.

"It offers realtime decision-making," Hardgave said. "We're talking about getting the product to consumers in the condition they, want when they want."