Reinforcing the Public Image of RFID: The Industry's Next Potential Hurdle

3/21/2003 - The RFID market has clearly reached an inflection point. Recent major announcements include Gillette's order of 500 million ePC tags and Benetton's rollout of an item tracking system that has an estimated annual requirement of 15 million IC units. Through numerous developments in the RFID market, the major barriers of price and standards are being addressed to help spur adoption. However, a potential new challenge looms: industry players need to manage public scrutiny of high profile RFID applications, especially as they relate to consumer markets.

As with any new/emerging technology, a certain degree of skepticism is to be expected. The issue now becomes how public skepticism is managed by the industry. The recent announcement by Benetton stating that they will be embedding RFID transponders in items of clothing and onto shipping cartons has been received with some uncertainty. This is largely due to potential consumer privacy concerns raised by some media sources and privacy advocate groups (such as CASPIAN). The Benetton announcement did not clearly state whether the company would deactivate transponders before customers left the store. According to sources at Philips Semiconductor, Benetton presently plans to deactivate the tags at the point of sale. However, the potential ramifications of the misconception cannot be understated.

With RFID looking to gain momentum as a viable supply chain-tracking solution, especially in the consumer goods sector, industry participants need to very clearly communicate how RFID technology is being used and how it relates to average consumers. According to Michael Liard, "RFID suppliers need to acknowledge that the mainstream press and everyday consumers are not necessarily familiar with the performance capabilities of RFID technology and the applications which RFID supports. It is conceivable that misconceptions about how RFID is being used could further delay the rollout of future RFID solutions and negatively impact the public's opinion of RFID technology."

RFID industry participants need to more closely manage their public relations and communications campaigns. This is especially true as the primary audience shifts from technology insiders to technology outsiders. If industry participants skirt the privacy issue and do not directly address the topic, it may open the door for a potential bevy of negative press that could impede the progress of the RFID market. VDC recommends that industry players properly equip themselves to enact countermeasures to address emerging privacy concerns that are being associated with RFID technology.

About VDC
Founded in 1971, VDC is a technology market research and consulting firm that specializes in industrial and commercial electronics, computing, communications, software and power systems markets.

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