Stores have eyes. Now they're getting ears and brains. Soon tiny wireless chips stuck on shampoo bottles and jeans will track all that you wear and buy.
The future is under construction at a Sam's Club in suburban Tulsa, Okla., but you can't see or hear it. Microchips inside cases of Mach 3 razors and All detergent continually and silently alert wireless sensors that the goods have just arrived at the loading-dock doors. More sensors built into store shelves alert staffers when a product needs replenishment.
It is the ultimate in inventory management: No hand-counting necessary--just let the chips speak up to vouch that every unit ordered has indeed arrived, on time and intact. In ten years most every consumer item, from jeans to dish soap, will probably bear a tiny chip that continually broadcasts its existence to radio-frequency readers at loading docks, store shelves, entrances and parking lots--just about everywhere.
Much as the humble bar code helped companies understand what they were selling, these new tags, which bear a unique number known as an electronic product code, will let businesses track what customers are buying. The chips contain no more information than a bar code does, but they eliminate the manual labor of scanning. This summer the Sam's Club in Tulsa will begin testing chips on individual items, such as packs of Caress soap. Consumer-product makers figure they'll tag cases of goods within two years, pricey items like shampoo within four years and everything they make within a decade.
The benefits to manufacturers include far fewer wasteful inventory glitches and, for retailers, lower shoplifting losses. Procter & Gamble's goal is to use the intelligence provided by the tags to cut its inventory by 40%, or $1.5 billion. P&G's preliminary analysis is that they could lop 4 cents off the dollar in every transaction.
And once these radio-frequency ID chips are ubiquitous, more advanced uses are expected to emerge, making retailers omniscient about every product moving through the supply chain. Prada, the Italian luxury goods designer, is attaching Texas Instruments chips to each $700 handbag, pair of sleek spike heels and slinky dress in its glam new boutique in New York's Soho district. When customers hang their selections in the dressing room, the chips activate a flat-panel video screen to play clips of models wearing those items, as well as a video of designer Miuccia Prada discussing suggestions for accessories.
Much of this new work is under way at the two-year-old AutoID Center at MIT, which has $9 million in research funding from a consortium of big companies and government agencies, including Pepsi, Johnson & Johnson, UPS and the Department of Defense. Kevin Ashton, the Procter & Gamble exec who heads the center, foresees RFID leading to complete automation of data collection. ''We need an 'Internet-for-things', a standardized way for computers to understand the real world,'' says Ashton.
Radio chips have long been used to tag livestock and are immensely successful in highway toll-gathering schemes. ExxonMobil's SpeedPass wireless payment system allows drivers to pay by waving a key-chain fob next to the pump. It has already enlisted 6 million drivers.
New networks will benefit from smaller and cheaper chips, more powerful and less expensive radio receivers and smarter software to interpret the data. Alien Technology, a Morgan Hill, Calif. chip company, is developing chips the size of a piece of glitter for MIT. Alien uses chemicals to etch ultrafine perforations into a silicon wafer. The resulting shards, suspended in a solution, are poured down a sloped surface covered by a dimpled plastic film. As the tiny blocks tumble down the slope, gravity pulls them into micropores.
Paired with a small antenna, the chips broadcast on an unlicensed frequency near the FM band, with a range of a few inches to several yards. SAP and Sun are among the vendors working on the software and servers needed to transform the chip data into a useful form. Eventually the information will feed into the databases companies already maintain to track their inventory.
The Star City Casino in Sydney, Australia installed the tags on 80,000 employee uniforms in 1997 to stop them from disappearing. Its system has cut the replacement rate in half, to less than 10%, says Ginsburg, a partner at Accenture (nyse: ACN - news - people), which designed the system.
We will all get filthy stinking rich and love it
We will all get filthy stinking rich and love it
AI
