This article originally published in Self-Service World magazine, April 2007.
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| Item-level RFID self-checkout is a thing of the now in North Carolina. |
He then strolls out the door. But as he does, readers at the door scan everything in his pockets and charge his account. The point of the commercial is that someday, RFID tags will completely automate self-checkout.
There has been a lot of speculation about when that "someday" would arrive. The holdups have been numerous. RFID tags haven't worked on certain items (like those made of metal or containing water), and the price of item-level tagging has been prohibitive. Many retailers have said it is too expensive to put a 10 cent or 20 cent tag on every item.
As journalists and analysts debated whether RFID technology could automate self-checkout, developers at a little company in the hills of North Carolina did it.
The beginning of a revolution
The story began in January 2005 when Freedom Shopping was contracted to begin developing a low-cost alternative to standard self-checkout. The goal was to make it as cheap, fast and effective as possible. So the company experimented with item-level RFID tags.
Once considered un-doable, the company made item-level RFID work by developing a universal tag and multiple components for the RFID self-checkout, including a kiosk and gate-style readers similar to what guard the doors of mall shops now.
Their tags are called "Foam Tags." Michael Daily, Freedom Shopping's senior managing partner, an engineer and a key figure in the system's creation, said a universal item-level tag was crucial to the system's deployment. The Foam Tag is so called because Freedom Shopping uses 1/8 inch of foam on each tag to elevate the chip and antenna far enough from the item's surface that it won't disrupt the radio signal.
What's more, frozen items often wear a layer of frost, and groceries in general sometimes are wet. For those reasons, the company uses an aggressive adhesive which Daily claims will stick to ice.
Not only does it simplify the logistics of tagging, he said, using a single tag for all products allows tag purchases in higher bulk, alleviating some of the cost concerns that slowed RFID adoption.
"It's a simple solution for a large issue," Daily said. "We have about 4,000 different item types, item SKUs and the tag goes on all of them: one single tag."
The kiosk itself is built to avoid disrupting RFID interaction. Its plastic enclosure doesn't interfere with RFID as metal would. The interface includes a variety of on-screen marketing tools, like the ability to present complementary or related items, depending on the customer's present purchases or buying history.
Freedom in action
Five months after being contracted to develop an RFID-enabled self-checkout, the company first deployed the solution at the Courtyard by Marriott hotel in Hickory, N.C.
Brian Lutz, the hotel's general manager, said it put the system to use in the market and gift shop. The hotel caters to business travelers and sales personnel who meet with local companies like Corning and the town's many fiber-optic developers. Though the hotel had a breakfast, it did not offer lunch or dinner; instead, a market provided premium goods, like wine and Ben & Jerry's ice cream. Unfortunately, the market was inefficient.
"We had everything on a manual checklist," Lutz said. "Guests could fill out the form and bring it to the desk and pay to do a room charge."
And then Freedom Shopping showed up, liberating guests and employees from the manual process. The new system offered everything the old system did not: time savings, automated management and ease of use. If someone leaves with an item for which he hasn't paid, the system charges the room and Freedom Shopping's off-site control center has a video record of the event.
"(RFID self-checkout) gave us an advantage because guests tend to be business savvy," Lutz said. "They like the convenience of it, and they know what they want."
Customers pick up their purchases and walk to the kiosk, which instantly reads the tags on each item. If the customer attempts to purchase an item that is beyond its freshness date, the kiosk will decline the purchase. Customers can pay by a variety of means, including biometrically if their payment information is enrolled in the payment program. The transactions are then stored and tracked.
Lutz said he uses the back-end management functions to track sales types and quantities. For example, he said business travelers buy more beer and wine (which the system can vend where local laws allow), the sales of which he can track through the management tool during the week. But on the weekends, when business travel drops, he knows to stock the store with more candy and frozen novelty foods for when families with children frequent the hotel.
"I can really get an accountability for my numbers, matching what was there with what was sold," Lutz said.
For security, there are multiple options. In Lutz's deployment, the market is located next to the front desk, so there is no door or camera monitoring it; however, the system can be deployed with a door-key system that requires customers to swipe a card (a hotel room key or a credit card) to enter the store. Those systems are being used where no staff is near, such as in hotels where the market is away from the desk.
Deployers also can incorporate biometric security. For example, customers can have their fingerprints recorded and associated with their preferred payment method. They can then choose to enter the store or pay via finger touch instead of by card.
Freedom Shopping recently upgraded the Hickory Marriott deployment to a newer model. The "Valet" also allows guests to order food to their rooms from a variety of local restaurants.
Declaration of retail independence
Since the prototype was built, Freedom Shopping has deployed more than a dozen of its RFID self-checkout systems. It has kept the deployments largely under wraps as it perfected the system, even as unknowing reporters and analysts continued to speculate about when such systems would begin deploying.
At the January 2007 National Retail Federation Convention and Expo in New York City, company representatives showed off the system for the first time, touting its advanced capabilities — like the ability to sell produce — and showing off its back-end management system, which could arrange categories of products into comparative sales charts, or track the total volume of gross sales.
While the technology might be flashy, Daily said the core value proposition to the system is something simple but long-sought in stores: speed and convenience.
"It's the time savings that it takes to check out: That's the key benefit of this system," Daily said. "The customer doesn't have to know anything about [it]. Anyone can walk up to it and know what to do. The average time is a six-second check out. And you don't have to have an attendant there."
