European Retailers Accelerate RFID Plans

European retailers have big ambitions when it comes to radio-frequency identification technology. Those leading the way--Marks & Spencer, Metro Group, and Tesco--are advancing their initiatives and, in some cases, bypassing the U.S. competition with more-mature RFID trials and futuristic applications.

Last week, at the National Retail Federation's annual conference in New York, Metro showcased an RFID-enabled hanging-garment sorter that it says can automate the routing of 4,000 to 8,000 garments every hour, versus only 150 pieces via manual sorting processes. The RFID application is just one of several the German retailer has under way at an RFID Innovation Center it opened in July in Neuss-Norf, Germany. Metro demonstrated the sorter during a live video feed at the conference. "Instead of doing this in the stores with service providers and suppliers, we thought it would be nice to have an innovation center where we could test their software and hardware in reconstructed stores and supermarket sections to prove their technology," says Zygmunt Mierdorf, Metro's CIO.

To test how consumers respond to RFID, Metro is tagging products from Kraft Foods, Procter & Gamble, and Gillette at its concept "store of the future." It will be at least two years before this project moves into Metro stores, mainly because it requires item-level tagging. Metro is accepting RFID-tagged pallets from 20 suppliers in select distribution centers and outlets of the Metro Cash & Carry, Real, and Kaufhof sales divisions, a project that began in November.

Tesco is expanding a yearlong trial tracking on-shelf availability of DVDs from two stores to 10. The U.K. retailer earlier this month ordered 4,000 RFID readers and 16,000 antennas from Tyco Fire & Security's ADT Security Services.

After early success with RFID tests, Marks & Spencer is expanding an initiative begun in 2002 to tag 3.5 million food and produce delivery trays. It takes only about 10 seconds to read a stack of RFID-tagged produce trays, compared with between 30 and 40 seconds for bar-coded trays, according to the U.K. retailer.

During the next few months, Marks & Spencer will extend the initiative from a U.K. food-distribution center in Barnsley to its remaining five. "The easy part for us is we have a closed-loop supply chain," said James Stafford, head of RFID at Marks & Spencer, during a presentation at the National Retail Federation conference. "Every food and apparel item is made to our specific specifications and carries our unique label."

The retailer heading up the RFID charge in the United States--Wal-Mart Stores Inc.--shows no sign of slowing. RFID is in use at 104 Wal-Mart stores, 36 Sam's Clubs, and three distribution centers, Linda Dillman, Wal-Mart's executive VP and CIO, said at the conference. The company has installed more than 14,000 pieces of hardware and run 230 miles of cable, and 57 out of the 100 suppliers who have to meet this month's deadline are shipping tagged cases and pallets. So far this month, Wal-Mart has read 7,161 tagged pallets and 210,390 tagged cases and has recorded 1.5 million electronic-product-code reads.