Analysis: The uncertain future of RFID

Depending on who you talk to, it wins customers and it puts people off, it's inevitable and it may never happen. There's no consensus on RFID's future – not even between a supplier and purchaser.

The Metro Future Store is a prime example of dipping a toe in the waters. Supermarket chain Metro has developed one flagship RFID-enabled store in Duisberg, Germany, laden with tracking-tag trinkets such as electronic personal shopping assistants that can tell you where to look for your favourite washing powder and assistant-less checkouts.

The project is being conducted with big-name tech partners such as SAP and designed to be a learning experience for all, as well as no doubt raising the profile of the supermarket and familiarising the public with the tech itself.

One fear is that item-level tagging - where individual products carry the chip - could give companies an opportunity to gather information on their customers.

Christian Koch, SAP's project manager in the Metro Future Store project, said item-level tagging may not be on the agenda for RFID if consumers object. "Item-level tagging has been pushed back [for retailers] because they're not sure how consumers will react," he said. "It's so far away, it's not a problem in the real world."

Consumers have been enthused by the store, according to Metro's research; they said they'd gladly travel to reach it, ignoring 'traditional' stores in a 5km radius in favour of visiting the chipped one.

A Metro spokesman said: "The technology will bring a revolution... the train is running, there's no way back." Item-level tagging is planned into the company's road map for 10 to 15 years' time.

But if consumers really don't like the idea – if it's too confusing for them, too much technology or their privacy concerns are too strong – will the train keep running?

Shoppers have already been known to kick up quite a fuss over the technology. The Metro chain was the target of German shoppers' ire earlier this year when they found their loyalty cards had been carrying RFID tags without their knowledge. They staged demonstrations and the chain dropped its tag plans.

As well as drawing criticism from consumers and privacy groups, the Future Store has given both Metro and SAP insight into the burgeoning RFID market.

SAP's Koch said that by being a first mover, the SAP-Metro partnership had an opportunity to learn about the technology in a live environment and find out about the conditions needed to get a successful rollout going.

On the other hand, the relative novelty of the technology can throw a spanner in the works. Koch added: "We have to... work with non-standard equipment. If it breaks, we won't get a replacement part easily - we have to be prepared."

The less-than-mature technology and standards have presented a problem for enticing more retailers to join the early adopter brigade. With the hardware not up to scratch, retailers aren't buying. With no one buying, manufacturers don't have the impetus to improve their products.

That's not dampening Metro's enthusiasm, though. The store is determined to push ahead with the rollout whatever the issues with the technology - it still has problems reading tags on metals and liquids, for example - and will start its supply chain rollout in November.

The big drive to kick off rollouts whether the tech is up to scratch or not is, doubtless, the money. Metro will be 'sharing the costs' with its suppliers and while the store has no calculations as yet on how much they reckon they'll save, saving cash is surely a factor. As Metro's spokesman put it: "If we didn't think there would be savings, we wouldn't put in this effort."