Metro falls foul of RFID backlash
new retail developments in Europe, but it appears that its
enthusiasm for the advantages that technology can bring is not
shared by all of its customers.
The company this week announced that it was scrapping its RFID (Radio Frequency Identification) trial amid growing concern that it could infringe consumers' rights by allowing their movements and purchases to be tracked without their knowledge.
The heart of RFID technology is the tag, a tiny computer chip with an antenna that is applied to the transport and product packaging. On this chip, a number is stored that is comparable to the EAN number in conventional barcodes and provides the manufacturer and retailer with product information, such as the best-before date, price and weight of an article.
This numerical code, or Electronic Product Code (EPC) as it is known, is read by means of an RFID reader. At a distance of up to one metre, the reading device is able to recognise the number stored and cross-reference it with the company's product management system.
Metro has been testing new retailing technologies in its Future Store in Rheinberg, near Duisburg, since April 2003, and has invested heavily in RFID technology as part of this trial, announcing earlier this year that it was to roll out the technology throughout its entire supply chain, allowing it to keep a much closer track on deliveries and stocks.
But the group also uses RFID technology to regulate the sale of multimedia articles such as DVDs and CDs, mostly with the aim of protecting minors. With this in mind, the company has integrated an RFID chip into the Extra Future Card, the loyalty card offered to all customers of the Future Store aged 16 or over. This way it can tell which customers are allowed to buy DVDs with an adult rating and which are not.
But it is the integration of the chip into the Extra card which has caused the consumer backlash amid fears that the technology could be used by the chain to track customers passage through the store and what they bought.
Metro insisted that this was not the case, and that the information on the chip consisted solely of the customer number printed on the card itself. Furthermore, this information is not read at any other place in the store, including the RFID readers at the store entrance and exit which serve only for theft prevention, Metro stressed.
"Nonetheless, in order to counter any reservations made with respect to RFID chips, the Future Store Initiative has resolved not to use these chips any longer in the Extra Future Cards," the chain said in a statement. "Customer cards already issued will be exchanged for conventional cards without chips in the course of the coming weeks. Irrespective of the confirmation of the legality of the chips, this is to dispel any doubts even if they are chiefly of an emotional origin and to objectify the discussion about RFID."
The decision to halt the RFID trial will not affect the technology's use in the supply chain or as an anti-theft device, the company said.
Metro is not the first chain to be criticised for using RFID technology - Britain's leading supermarket group Tesco faced heavy criticism when it trialled the technology in a number of stores last year - but the German group has gone to great lengths to ensure that its customers are aware of the benefits of using the technology.
"Wherever RFID is used, this is indicated, and only product data, not customer data, are stored on the RFID chips used in products," the chain said. "The RFID labels cannot be used by the Metro Group outside of the Extra Future Store. In addition, comprehensive explanations on RFID are provided to the customers in the information material and at an Info Terminal.
"The Metro group wants to create long-term reliance on RFID technology and define worldwide standards for RFID. Therefore, the group is co-operating with other companies from the IT and consumer goods industries, as well as other retail companies, on an international level in the EPCglobal Initiative. In this context, Metro is actively involved in the formation of a separate working group that will deal with questions concerning data protection in the use of RFID."
