Starbucks' RFID Plan - InformationWeek

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12/9/2004
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Starbucks' RFID Plan

Coffeehouse chain plans to use the technology to let suppliers make after-dark deliveries

Good service is nearly as important as good coffee to customer loyalty for Starbucks Corp. But when a delivery guy comes knocking on the back door to drop off muffins, it means baristas may need to leave their countertop posts.

After-hours deliveries would let Starbucks employees stay focused on customers.

After-hours deliveries would let Starbucks employees stay focused on customers.

Photo by Spencer Platt/Getty Images
To help solve the problem, the operator of the omnipresent coffeehouses is considering using radio-frequency identification technology as part of a proposed plan to let its 40,000 suppliers drop off pastries, milk, coffee beans, and other supplies at night, after stores have closed. But Starbucks wants to make sure delivery people "don't walk out with as much stuff as they dropped off," said Sean Dettloff, partner and asset-protection manager for Starbucks, at an RFID conference last week.

The company may distribute to its suppliers cards with RFID chips that would give delivery people access to stores at night, while recording who's coming and going, Dettloff said.

RFID tags contain a microchip and an antenna, and typically work by transmitting a serial number via radio waves to an electronic reader, which confirms the identity of a person or object bearing the tag.

Ideally, Starbucks' system would let a delivery person insert a plastic card near a store's door. The card would confirm the supplier's identity and disable the burglar alarm. "That's not going to happen tomorrow," Dettloff said. "But you can't get the projects going until you develop these ideas."

If Starbucks adopts the technology, it could be a boon to manufacturers of RFID chips, which include Philips Electronics, STMicroelectronics, and Texas Instruments, and to makers of RFID tags and readers.

The fast-growing company, which raked in $5.3 billion in revenue last year and posted a brisk 13% increase in November sales at stores open at least 13 months, operates more than 8,800 stores in 35 countries. Many of its suppliers are regional companies that deliver fresh muffins and pastries to those coffee shops daily.

Starbucks isn't a stranger to RFID technology. The company last year began a pilot using the technology to track cargo containers used to ship coffee in 150-pound bags from Guatemala to ports in Seattle and Tacoma, Wash.

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