Rfid Essay

RFID within the Retail Environment

Kristina Huber, Lisa Houck, Igor Vinogradov

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RFID in Retail: The Ethical Dilemma

The ethical dilemma surrounding RFID technology in the retail space is the threat to consumer’s informational privacy. This threat is threefold:

1) How the personal consumer information collected by RFID will be used, meaning will it be used by the specific retail outlet or be sold to third parties?

2) Will the marketing research data gathered by RFID result in a surge of direct and targeted marketing toward the consumer?

3) Will RFID be employed as another means of tracking consumer movement within the retail environment?

In order to evaluate the ethical concerns

One company pushing for total RFID integration in the retail realm is the METRO

Group, based in Germany. METRO Group has been striving throughout the years to bring RFID technology to all consumer stores. For example, Metro group is designing the “store of the future” that will revolutionize retailer’s channels of distribution, eliminate the bar-code system, as well as provide new forms of advertising. METRO group “together with Intel, IBM, TSystems and more than 60 other cooperating partners from the IT and consumer goods industries and the service sector are developing feasible concepts for the trade of tomorrow.”4 The vision uniting METRO Group and their affiliates involved is “the setting of new technological standards for the consumer goods industry and the speeding up of the modernization process in commerce.”4 Presently no infrastructure has been created or discussed as to how RFID technology will be used to build an in-depth consumer profile or how potential users could take advantage of the information gathered by RFID readers. However, there are many consumer perceptions as

Of course consumers can choose whether or not to obtain a loyalty card and instead pay for everything with cash to avoid collection of their information or they can simply take their business elsewhere. Consumers may argue that RFID does not permit consumers the right to choose if their purchases are tracked as opposed to a loyalty card where consumers can simply choose not use one. This is true, but if they pay in cash the purchase will not be connected to them and can still aid the store in tracking and stocking inventory.

The use of RFID in the retail space will collect information in a similar way to how loyalty and credit cards presently collect consumer data, the use of which is widely accepted in the United States and around the world. RFID will do the same thing more efficiently and provide the greatest utility for the greatest number of people. Therefore, consumers should not be concerned with the implementation of RFID.

Consumer Concern #2: Increase in Targeted and Direct Marketing

The second concern expressed by consumers is the potential for increased targeted