RFID as a Barcode Replacement?
May 24, 2004
At item level, directly replacing a barcode is no easy feat, since barcodes cost next to nothing, therefore Wal-Mart, Tesco and other FMCG companies initially stated that barcodes would need to be replaced by a device costing 1-2 cents. However, for a smart label with the necessary data, range etc, to reach this cost profitably is unlikely within the next few years, even more so because many FMCG companies seem to be persuaded that chip labels are the only realistic option, and these come in at a much higher price. Even by 2015 no mroe than 15% of barcodes would be replaced or used with an RFId tag - mainly on expensive or high shrinkage items such as DVDs, CDs, liquer, razors, clothing etc. Indeed, soem of this already exists today.
RFID is much more than just a replacement for barcodes. The same tag would obviate the need for an extra anti-theft EAS device (typically costing about 4 cents but with several extra cents to fit it). It could be used to prove ownership of goods, provide authentication, speed up shopping, remove the need for tills and increase floor space, and ultimately speed up the time items take to go through the supply chain, due to the better flow of information between each link. These benefits, and more, would result in huge extended cost savings, and even sales increases in some cases.
The black spot on the cost vs data chart in the figure shown shows where The Internet of Things tag would need to lie if we accept the one cent target price advocated by the user-sponsors of the Auto-ID Centers. They even demand one meter range. However, they now talk of an interim 64 bit tag serving much of this need. If less than one cent proves necessary, we firmly enter chipless territory. It lies on the crossover of both chipless and chip technologies.