March 18, 2004

RFID is a Two Way Street

Phillips has a new take on RFID and wants to put RFID readers in mobile phones so you can comparison shop. This, along with a bar code reader, would take away a lot of the normal retail strategies that stores use to enhance profits via sales. People go into stores just to get what's on sale but what the retail outlet wants them to do is to buy enough other items so that they increase gross sales and profitability at the same time. Being able to consult a database wirelessly and know that the item you're looking at (or a comparable one) is available for less a block away will drastically change shopping patterns, especially for multiple stores in a category that are close to each other.

If it were little trouble, I would simply submit my shopping list to the database and take the road instructions to minimize my overall cost. Simply enter in your fuel economy (if traveling by car) and how much you value your time and you can cherry pick among two or three stores and know, before leaving, who has what for less. Any impulse shopping would bring out the RFID/bar code reader and you'd see if the next store had that new gizmo or treat for less.

Of course stores would hate this and would not cooperate in creating the necessary database. But they can't hide the receipt and they are unlikely to ban cell phones so the data is going to get entered. There will be attempts to poison or game the database with quick lasting sales or simply putting employees up to entering in false data. It's a war that they are unlikely to win and this will end up changing both day-to-day pricing strategy and store site location as it becomes a more significant competitive danger to locate a store next to your competitor.

Posted by TMLutas at March 18, 2004 12:11 PM