RFID Tag Retail Applications in Europe and the United States Take Different Paths

Retailers in Europe and the United States have taken very different approaches to RFID Tag technology. European retailers are more focused on tracking transport vehicles rather than pallets or boxes; their tracking of individual items is more focused on high-value items.

Retailers in Europe and the United States have taken very different approaches to RFID technology. European retailers are more focused on tracking transport vehicles rather than pallets or boxes; their tracking of individual items is more focused on high-value items.

As early as 2001, Walmart joined a project that had just begun at the Massachusetts Institute of Technology to support the development of EPC, a low-cost radio frequency technology that can track items globally.

Across the pond, Marks & Spencer (M&S), the largest retailer in the Commonwealth, was also experimenting with the reliability of using RFID tags on transportable carts in the supply chain. Both companies began field trials a year later. Today, both companies have developed RFID technology that can be used in stores and distribution centers. But the two retailers took very different approaches.

Wal-Mart, of course, is requiring its top 100 suppliers to use RFID tags on pallets and boxes by 2005, and has an ambitious plan to require all suppliers to use RFID technology by the end of 2005. Wal-Mart currently has identifiers installed in three distribution centers and more than 125 retail stores to better manage inventory and reduce out-of-stock situations.

In contrast, M&S avoids using UHF EPC tags, instead using 13.56 tags on 3 million returnable carts to increase transportation efficiency. It also uses patented UHF tags on clothing and other items to ensure that there are no out-of-stocks on shelves. Both retailers have similar goals, but different approaches have shown different RFID technologies. UHF EPC technology has been adopted in Europe and the United States, but European regulations on RFID identifiers have slowed the development of EPC in Europe, and the characteristics and nature of European retailers make them more focused on tracking round-trip transportation vehicles, such as transport vehicles, rather than tracking pallets or boxes. European retailers’ tracking of individual items is more focused on high-value items.

Technical barriers

When the AUTO-ID Center began to study EPC technology, Europe was ahead of other countries in the world and had already used 13.56MHz RFID tags in closed-loop systems, such as asset tracking and workwear tracking. Most European retailers are not interested in using UHF tags in an open-loop environment because Europe has regulations on RFID technology. The effective radiated power (Effective Radiated Power) of UHF identifiers must not exceed 500 milliwatts. In this case, the UHF tag recognition distance can only be within 1 meter, which is not applicable to boxes that need to pass through 3-meter-wide warehouse doors. In the United States, the allowed ERP is 4 watts, and the tag can be read at 3-4 meters.

Another problem is that Europe does not have a suitable EPC protocol. The first generation of EPC tags is very useful in the 902 MHz-928 MHz bandwidth in the United States, but not so useful in the 869. MHz-869.65MHz specified in Europe. In September 2004, the European Telecommunications Standards Institute revised the frequency regulations, increasing the effective transmission power ERP to 2 watts and adjusting the frequency bandwidth to 865 MHz-868 MHz. The working effect of EPC in Europe should be improved.

Differences in business practices

Large retailers in the United States have huge stores and large warehouses behind them. Usually a distribution center (DC) covers several stores in a large area, so the purpose is to improve the efficiency of long-distance transportation of goods. For example, Walmart does not use pallets or small transport trucks in its transportation trucks. The boxes are filled in a truck, and the barcode is not scanned because it takes too much time and manpower. If RFID is used, the accurate information of the goods arriving at the store can be known.

The situation of European retailers is completely different. Although the EU covers 25 countries, the main retailers are still domestic. They are small and concentrated. At the same time, the warehouse space behind the store is limited, only a small piece. Marlow Truman, an RFID expert at Deloitte Touche Tohmatsu, said: “We can’t afford to use such a large space as a warehouse. It’s too expensive. The labor is also expensive. The larger the space, the more repetitive labor is required, and the efficiency will be low. Therefore, such a large space is not needed in Europe.”

European retailers usually pick up the goods at the distribution center and put them in a bag with a barcode, then put them on a small car and load them into the truck. After arriving at the store, the barcode information is scanned. This management is much more transparent than that of American retailers.