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The Ultimate Price Tag


by Glen Emerson Morris

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The University of Pittsburgh and Oregon State University recently announced their joint development of a technology that promises to revolutionize marketing by providing, in effect, a price tag that broadcasts information to cash registers, for just a penny each, if purchased in mass quantities. The new format, dubbed "product emitting numbering identification," or PENI for short, is just 3mm across and should be easily attachable to most products. Even with a singles price of about $0.12 each, the price for a PENI tag is expected to be well below the average of $0.30 for an equivalent tag using current technology.

The PENI format is the newest variation of Radio Frequency Identification, or RFID for short. Essentially RFID technology uses two chips, a microchip and a radio transmitter, in a package as small as .4 inches across to store price and other product information. Around for years, RFID was initially used to track relatively expensive items, like trains and cargo containers, then as the price dropped, RFID became cheap enough to use for consumer items like clothing. With the new PENI technology, which integrates the microchip and transmitter into a much smaller package, RFID can be used for nearly any product, no matter how inexpensive. In addition, the PENI tag will be able to provide more information than just price, and this is going to open up some very interesting possibilities for our industry.

Even a few bits of information can mean a lot to an advertiser. When was the item made? By what factory? By what shift? PENI tags will be able to provide this kind of information. In next few years, they should be able to answer even more sophisticated questions. Was the product subjected to overheating during transit? Was it dropped during transit? What humidity was the product exposed to? Was it kept pointing up, if needed? And these answers won't just be available when the tag is scanned at the register. They'll be available at key points along the entire distribution channel.

Even now, advertisers have a limited ability to track the status of merchandise on route to consumers and resellers. Some delivery services, like FedEx, offer tracking by scanning the package every time it passes a certain milestone. In the future, a company like FedEx will be able to update the advertiser with all the information on the PENI tag, every time the package was scanned.

RFID is even being used to track the condition of products after delivery to consumers, to both improve performance and extend the product's usable life. Phase IV Engineering, of Boulder, Colorado, has developed RFID technology in cooperation with Goodyear that allows drivers to monitor tire pressures and temperatures even while driving. RFID temperature sensing technology could be applied to a number of applications, from cattle on the range to food in supermarkets.

Exactly how far PENI technology is from becoming a standard item at supermarkets is a guess, but it's not likely to be more than two or three years away for retail chains. There are several reasons for retail stores to adopt PENI technology, the most compelling being that it promises faster service at the register. Currently, cashiers have to manually pick up an item and rotate it until the bar code faces the laser scanner. With a PENI system, cashiers won't have to do this. Cashiers will just need to move the item near the RFID receiver for it to register (the proximity also powers the RFID, which usually doesn't have it's own battery). In addition, the RFID receiver at the cash register should cost far less than a conventional bar code scanning system, and it should also be easier to connect it to the register.

PENI tags will offer other advantages, too. A printed product label has only so much room for information. A PENI tag, on the other hand, could eventually contain volumes of information, even the product's complete operating manual. Given that PC compatible PEMI receivers currently sell for less than $50.00, and the price will only drop, there's a good chance most consumers will be able to read PEMI and RFID tags by the end of the decade. It seems certain most businesses will be able to.

A time is coming when it will be possible to track any product through the distribution channel to the consumer's home, and know details about the product, its condition, and the environment it's in, the entire time. On the surface, this can only help business, and consumers, but there is a downside to this technology that we should consider. If products can be tagged and tracked, so can people. As prices drop, even third-rate banana republics will be able to afford surveillance systems Stalin and Hitler would have killed to possess.

Perhaps, when we set out to create the ultimate price tag, we also should consider what the ultimate cost is likely to be. After all, we're likely to be the ones paying it.

Copyright 1994 - 2010 by Glen Emerson Morris All Rights Reserved

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