RFID In Retail Industry

RFID in retail industry has solved major problems related to customer services. Improved customer service would ultimately lead to increased sales. With the help of RFID, it becomes easy for the sales staff to locate a particular item in the store and check its availability in less time. It gives accessibility to the products from store to store and also to the entire database.

Improves the level of customer service

The overall time spent by the customer in shopping is reduced as the desired item is found in less time making shopping a better experience. Also while scanning of a particular product is done this technology provides access to the information about the product. It calculates the prices of the products kept in the shopping bag simultaneously, so the shopper is aware of how much he/she is spending. As the total of the shopping done is already calculated the customer has to just pay, thus waiting time for billing is reduced.

Increases customer's loyalty

The RFID tags attached to the items has the ability to provide feeling of a 'virtual personalized shopper' to the customer. It also facilitates in tracking down the shopping preferences and habit of the customers and thus helps in introducing right rewards connected to it. The information about customer's shopping style, their shopping history, past purchases, etc can be tracked down, thus value added services could be provided to them giving the customer the feel of personalized treatment. Even decision regarding purchase of a product could be made in fitting room, as the RFID readers in fitting rooms that are connected to the computer, provides all information regarding the garment. Also the information related to the item is confidential and not to be unveiled to the customer, can be protected by your IT department. Thus security is also ensured from seller point of view also. These added benefits lead to better shopping experience for the customer which ultimately leads to customer loyalty towards your shopping hub.

Better inventory management

Scanning of bar code has become mandatory in inventory processing, but it has certain drawbacks compared to RFID technology. The bar code stickers show human errors as it has the capacity to encode limited and stagnant information. Bar code is unable to read or write multiple codes. RFID's capacity to track the items efficiently and encode multiple codes, resulting improved inventory management. It provides better safety in terms of fast recall of the stock and minimizes the theft also. It helps the supplier in maintaining the stock of goods and keeping the shelf filled with goods whenever needed. So the customers would never face storage of a product thus avoiding loss of sales and profit. The key element in today's market is to maintain appropriate in-stocks and not having too much additional inventory.

To manage inventory is a costly affair for the retailer. The information accessed through RFID helps in keeping a check on the inventory and its supply. Thus, maintaining the right percentage of inventory. The ratio of demand and supply can be well maintained as the items which has increased sales is tracked down and the stock is uploaded likewise.

Item level tracking

Item level tracking is the most important objective of RFID system. This tracking gives a personalized ID to every unit of inventory. This results in better tracking of the items. As it saves time, the re-ordering of the items becomes easy and can be done in lesser time. The percentage of shrinkage is reduced due to proper and timely shipments of the items.

Futuristic view

Advanced technologies are being developed in the field of RFID tags that are more advanced technologically and are of reduced costs. Generally the cost of RFID tags range from twenty cents to one dollar which is not so reasonable cost. Therefore in order to make it cheaper, the prices are required to fall to five cents instead of twenty cents. RFID tags are a part of RFID system so in order to increase its usage, and required to be cost effective. The future of RFID is very bright in retail sector as right from inventory management to product manufacturing, this system provides more efficient and advanced retail experience to both customer and the seller.

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Let the RFID Cycle Begin - Intemec

Let the RFID Cycle Begin - Intermec

RFID a great growth market

A new revolutionary technology is forming called RFID or Radio Frequency Identification. This technology greatly improved the ability to track items, any item. The current leading market solution uses a one way system where, for example, a simple "bar code" at your local grocery store where the grocery clerk has to run the bar code over a scanner. These readings are very man-hour intensive as each individual item must be scanned RFID is a two way system where a reader could scan every item at a Wal-Mart (WMT-48.14) store. Then each item with a RFID tag would respond or "chirp" back to the reader. Using the two way RFID system a single person could take complete inventory of a store almost eliminating all the man-hours of manual inventory. A reader mounted on a fork lift truck would track each item the hyster moves into the warehouse. The RFID will allow a single person the ability to inventory unlimited amounts of items.

Using our simple forecasting theorem which mathematically helps us forecasts how successful technologies will be; our approach signaled that RFID will be revolutionary.

Please refer to forecasting a revolution Multiplication of Moore's law http://www.durig.com/duriglaw.html .

Here are some of the many uses of RFID. Tracking gamblers at a black jack table so the house knows who's betting big, tracking prisoners in a jail to see who was involved in a scuffle, tracking prescription drugs for counterfeit, tracking cattle for mad cow disease, tracking cars so police could immediately identify a stolen car or a car with outstanding issues. More examples, tracking passports to see if the picture is correct, tracking products for Wal-Mart to almost any store and warehouse, tracking the Department of Defense inventories for most items, Boeing can track parts for building aircrafts and Ford tracking parts for it automobiles. It appears that both the scope and magnitude at this time is limitless.

Industries tracking consumer goods from shoes to cement blocks to frozen food to cars, including boats, planes, parts and supplies can utilize it in all aspects from manufacturing, inventory and shipping to retail outlets.

Judging from our theorems, RFID will see revolutionary growth to the likes of the cell phone, Personal Computer and the Internet that also at the beginning of their cycles scored extremely high.

IdtechEx forecast

From IdtechEx, the market for RFID is to grow from 2.7 billion in 2006 to 12.3 billion in 2010. The value is expected to be about 26.2 billion in 2016 or ten years to grow almost 10 times.

Selecting the company that could lead that market

Identify the correct market to invest is only part of the challenge. Possibly the bigger challenge is to identify the company that will lead this technology. This is where we have identified Intermec. Intermec is one of the leading companies in bar codes. Over the last few years Intermec has been focused on developing products that would comply with the new Gen 2 RFID standard rather than introduce products that supported the older Gen 1 Class and 0 Class protocols. This strategy has allowed Intermec to utilize its roughly 149 patents to allow Intermec to extract royalties from the entire RFID industry and appear to be essential when utilizing the Gen 2 RFID standard. The Gen 2 RFID standard and Intemec's patents are very co-depended of each other. In my opinion Intermec is gaining an integration monopolistic position.

Why monopolies have great success

Past monopolies have had great success from controlling the market like Intermec integrating their solution into and then helped become part of the standard. Compared to war it is the equivalent of having the high ground in battles - this approach is extremely valuable. Control in new revolutionary technologies is very rare. Our studies shows that in the past when companies achieved control they are usually able to hold it for 1-2 business cycles or from 9 -19 years. Some past successes that have demonstrated integration and or control of revolutionary products were Microsoft (MSFT-27.13) and Intel (INTC-19.78) in the Personal Computer, Cisco (CSCO-21.44) for the Internet and Qualcomm (QCOM-49.87) currently for Cell Phones. When I was young child IBM (IBM-84.32) controlled the standard for Mainframe and AT&T (T-26.81) the phone business. You can often see companies that are monopolistic in a revolutionary industry have a probability of achieving super wealth. Several monopolies we listed achieved the world's largest stock value.

Is Intermec a new monopoly?

Intermec or any company for that matter to have a chance to be great monopoly it must have a degree of control. The question is how much control does Intermec have over the RFID industry?

To answer this simple but very important question we devised an extremely effective test. Intermec claim's to be an integral part of the Gen 2 standard. The definition of de facto standard is recognized by all its peers as the standard.

Does the RFID industry recognize Intermec as the standard?

Companies like Symbol Technology (SBL-10.64), Zebra Technology (ZBRA-45.45), Philips Electronics (PHG-32.38), Texas Instrument (TXN-30.59) are some of the leading companies in RFID space that also have the size, technical background, law staff and other resources to verify or reject Intermec's claim. Accepting Intermec's claim means paying royalties to Intermec for years, you must understand if possible all theses companies would NOT want to pay royalties so their preferences is to reject Intermec's claim.

All the companies mentioned above and more have agreed that Intermec will receive royalties on every Gen 2 RFID product they make. No one wants to pay 2.5-7% royalty to Intermec to utilize the Gen 2 RFID standards. Especially leaders in RFID like Phillips, Texas Instrument and Symbol which all have a major leading position in the market, and their agreements with Intermec greatly validated Intermec's claims.

It was when the largest company and Intermec's closest competitor, Symbol Technologies, that created the biggest challenge to Intermec's claims. Symbol Technologies not only refused to pay early in the process, but sued Intermec asking for Intermec to pay Symbol royalties for their many patents and Symbol wanted their own version of the standard.

Symbol gave up their court fight and agrees to join Intermec's Rapid Start Licensing program. When your biggest competitor allows you to sign a controlling contract where Symbol has to pay royalties to Intermec every time Symbol sells a RFID hardware product. To me the Intermec/Symbol relationship Intermec has provided validation with a very high degree of control.

Many experts assign a similar agreement to the rise of Microsoft and the downfall of IBM when IBM accepted the Microsoft PC standard. I believe history will say the same thing when Nokia (NOK-20.52) then the largest cell phone company in the world signed and agreed to pay royalties to Qualcomm on all Nokia 3G phones.

It reminds me of a very old saying "the king is dead, long live the king" if you can dictate your will to the powerful companies your have a high degree of control.

Gutter vs. Shingles

Intermec is using their RFID control to establish what I call a gutter business. In Oregon it rains a lot and what we know are roofs. Water from shingles flow into a gutter. In some cases the gutter and shingles are co-dependent and need each other for the roof to work properly. First gutters have tremendous leverage. Second you could measure the number of shingles or measure the square footage of the roof to understand the amount of possible water flow or leverage the gutter might achieve We believe gutter based companies are far better companies to own. If you wanted fill a cup of water would you put your cup under a shingle or a gutter? It's my believe that by far most companies are shingles business models, but the gutter business model have far great potential to grow profits utilizing and leveraging the shingles.

In a few situations all the shingles combined could flow into a single gutter. A roof with a single gutter or a monopoly has one of the best business models and has a chance to leverage the entire industry to enrich its profits.

Intermec is possibly building this type of business model and has awarded the premier client of Cisco, and IBM while having alliances with Microsoft, Oracle and SAP. Companies that joined Intermec's Rapid Start Program and agreed to pay Intermec a royalty on every RFID hardware product they sell.

? Accu-Sort

? Avery Dennison

? AWID

? Datamax

? EM Micro

? Feig Electronics

? Hand Held Products

? LXE

? Metrologic

? Paxar

? PSC

? Psion Teklogix

? SAMSys

? Sato

? Symbol Technologies

? Texas Instruments

? ThingMagic

? Toppan Printing

? Zebra Technologies

All of these agreement occurred in 2005 after the new Gen 2 standards for RFID established in early 2005.

If we are right Intermec should have outstanding and accelerated growth for the duration of the Gen 2 RFID standard business cycle possible Gen 2 Standard last about 9 years based on many business cycles we followed.

Risk

Intermec's placement and degree of control in the Gen 3 RFID standard is very unclear, and will take many years from now to achieve any clarity.

A company could challenge Intermec's legal position. Even though Intermec has about 149 patents in the RFID industry the largest IP portfolio, a single company could sue making Intermec's patent unenforceable. Knowing that Symbol Technologies is well funded and a leader in the RFID industry and has attempted this and failed, it makes the hurdle even higher for a smaller less funded company to attempt this knowing that it would be a very costly approach.

Intermec appears to limit the companies that license their technology especially during their Rapid Start Program. If in future years Intermec is found to be a monopolistic company this could be very damaging in a court system. Intermec should give every company an equal chance.

RFIG Gen 2 is still not Intermec's core profit center and there are no guarantees that RFID will become revolutionary. Most all new technologies have gone through long incubation cycles before becoming mainstream which RFID Gen 2 will probably incur.

In my opinion the great appreciation will come when the royalties are the main profit center, and that may be many years if it ever occurs.

Conclusion

To summarize

1. The RFID appears to approaching a revolution growth cycle.

2. Intermec is the technology patent leader and has degrees of control over the Gen 2 RFID Standard.

3. Intermec is forming a gutter business model combined with a possible monopoly position giving Intermec the ability to have possible leverage over the entire RFID industry

If Intermec could achieve the three items above it has a chance to achieve

a: Modern Monopoly Effect.

A Modern Monopoly Effect is when a single monopolistic company achieves a stock market value roughly equal to all the companies' market value that supports the standard. In Intermec's case Intermec could achieve stock market values about equal to all RFID hardware partners businesses that supports Intermec Gen 2 Standard for RFID.

The water from all the shingles on a roof could roughly equals the water flowing into a gutter, a single monopolistic gutter named Intermec.

If Intermec becomes a Modern Monopoly Effect possibly it will become the fifth time we have identified and owned a Modern Monopoly Effect.

Randy Durig manages the Monopoly Technology and Monopoly Blue Chip Portfolio's He tries to own companies that measurably have control or monopolize their markets.

Monopoly Blue Chip Portfolio National Performance Rankings: 3rd

In the United States, Ranked by 3 year annual return , for Large Capitalization Blend, 4th Quarter 2005, By Money Manager Review

Durig Capital is a registered investment advisor. If you know someone that would like our research services just enclose the name, day time phone, and email or rdurig@durig.com or call toll free 877-359-5319

Randy Durig owns Intermec, Qualcomm and Cisco in discretionary client's portfolios and in his own account. Past performance is not a guarantee for future returns. All information we believe to be correct but make no guarantee to accuracy

For more information about monopoly investing please visit http://www.money-manager.us, http://www.durig.com,& http://www.investment-investment.us

RFID Sensors to Protect Water Supplies

Recently the US Military has developed a special set of sensors for water supplies for troops. Any time a base camp is set up it is important to monitor the water supplies and test them. You cannot simply test them when you arrive you need constant monitoring so that insurgents or enemies do not pollute the water or put poison in it. The three most common pathogens of water supplies are; Vibrio Cholerae, e. Coli and Giardia intestinalis and believe me you don’t want any in your drinking water.

Two companies; Phase IV Engineering and Sporian Microsystems both in Boulder Colorado have developed a bio-sensor system which is RFID based. The device, which floats is connected to a Radio Frequency antenna and it is attached to a sensor housing which is submerged which is also connected to an anchor line. These water sensors can detect pollutants up to 1 part per million.

I propose these be used in the United States to protect our rivers and lakes, which contain drinking water. It is also important to have them in our wetlands and areas such as the Bayous in Louisiana and the everglades in Florida. Now then let us look at the efforts of the WHO, UN and World Bank; can we put these in third world nations to prevent waterborne diseases which kill millions of humans annually? If we can get the costs down significantly thru mass buying and economies of scale we are well on our way to eliminating the horrible issues that expanding populations in the third world face from polluted water and waterborne pathogens. As we see more severe and severe droughts in the world we will need to address these issues. We know have technology ready to be transferred thanks to our military expenditures thru DARPA.

We must continue to fund such research and boost such budgets of DARPA so that all of mankind can benefit in the offshoot transfer technologies. Think on this, something must be done.

"Lance Winslow" - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/. Lance is a guest writer for Our Spokane Magazine in Spokane, Washington