The Wall Street Journal reports that Wal-Mart will use radio frequency identification (RFID) technology to track the clothing sold in its stores. RFID systems transmit data wirelessly from a chip or tag to a reader. It has been proven time and again that unsecured RFID tags can be scanned and the data gathered with cheap, off-the-shelf technology.
Starting next month, the retailer will place removable “smart tags” on individual garments that can be read by a hand-held scanner. Wal-Mart workers will be able to quickly learn, for instance, which size of Wrangler jeans is missing, with the aim of ensuring shelves are optimally stocked and inventory tightly watched. If successful, the radio-frequency ID tags will be rolled out on other products at Wal-Mart’s more than 3,750 U.S. stores. […]
Wal-Mart’s broad adoption would be the largest in the world, and proponents predict it would lead other retailers to start using the electronic product codes, which remain costly. Wal-Mart has climbed to the top of the retailing world by continuously squeezing costs out of its operations and then passing on the savings to shoppers at the checkout counter. Its methods are widely adopted by its suppliers and in turn become standard practice at other retail chains. […]
But the company’s latest attempt to use its influence—executives call it the start of a “next-generation Wal-Mart”—has privacy advocates raising questions.
While the tags can be removed from clothing and packages, they can’t be turned off, and they are trackable. […]
Wal-Mart is demanding that suppliers add the tags to removable labels or packaging instead of embedding them in clothes, to minimize fears that they could be used to track people’s movements. It also is posting signs informing customers about the tags. […]
Several other U.S. retailers, including J.C. Penney and Bloomingdale’s, have begun experimenting with smart ID tags on clothing to better ensure shelves remain stocked with sizes and colors customers want, and numerous European retailers, notably Germany’s Metro AG, have already embraced the technology.