Previous Story: Mobile users blame operators for spam
Next Story: Symbian-based smart phones reach 25M mark

Few European consumers have RFID on their radar
By Scarlet Pruitt

While the use of radio frequency identification (RFID) tags in consumer products has set many global suppliers and retailers abuzz, it will take more to spark the enthusiasm of the European public, a new survey suggests.

Pubic awareness of RFID in Europe is low, and those who are familiar with the technology have some privacy concerns, Capgemini SA said this week. The consulting group recently surveyed more than 2,000 European consumers on their perceptions of RFID.

The technology is a method for storing, receiving and transmitting data via antennas on tags that respond to radio frequency queries. It has captured attention as retailers such as Wal-Mart Stores Inc. and Tesco PLC begin to use RFID to increase the efficiency of their supply chains. By placing tags on product cases and pallets the companies can automatically identify items when they pass near an RFID reader. That information can then be transmitted to an inventory control system.

RFID has been hailed by some retailers and technology proponents as the new bar code and they would like to see it spread into store aisles to better track and target sales. RFID has already taken hold in other applications such as automatic toll passes.

Capgemini found, however, that only 18 percent of European consumers surveyed had heard of RFID. Of those familiar with the technology, 52 percent had a favorable perception, while 8 percent had an unfavorable perception, and 40 percent were unsure.

These results were not surprising to Ard Jan Vethman, Capgemini's RFID lead for Europe, who saw similar results during a study in the U.S. last year. RFID is primarily being used in supply chains now, so there is no reason why consumers should be very aware of the technology, he said.

Survey respondents who were familiar with the technology had some privacy concerns, however.

Tracking of consumers through their purchases, use of data by third parties and increased direct marketing were all listed as potential issues, Capgemini said.

"A little knowledge is always dangerous," Vethman said of the results.

For current RFID applications the privacy fears are somewhat unwarranted since retailers do not care what happens to tags once they are outside the store, Vethman said. Future applications are what need to be discussed so consumers can voice their privacy concerns, he said.

"Retailers should very clearly state their intentions and perhaps proactively engage with privacy groups," Vethman said.

The survey found that most consumers expect RFID to have the same impact on their privacy, or greater, than other consumer technologies such as cell phones, ATMs and store loyalty cards, Capgemini said.

Some of those surveyed did recognize the technology's potential benefits, such as increased access to more products, instant recognition of preferences and in-aisle product suggestions.

It makes sense for retailers to concentrate on improving the intrinsic value of their products through RFID, Vethman said. Tags can provide proof of purchase and warranty information, and be deterrents for theft, he added.

While it is still early days for RFID in consumer products, the public needs more information on the technology to garner greater acceptance, Capgemini said.

After all, 36 percent of those surveyed said that they expect RFID tags to appear on most products they buy within two to five years, while 22 percent expect them to be widely used within two years.

Because of the high price of tags and readers, consumer product tagging is probably only appropriate for the high-tech and apparel sectors right now, Vethman said.

But even in those circles, more consumer education appears needed.

Only 14 percent of those surveyed said that they would like the tags to be widely used within two years, and 13 percent said that they never want them to be used.

The Capgemini survey was conducted online in November and polled consumers in the U.K., France, the Netherlands and Germany.

Posted February 11, 2005 04:06 PM | TrackBack (3)