Chapter 13, Problem 3EE

As mentioned in the chapter, some analysts predict barcodes may be replaced by a wireless technology called radio-frequency identification (RFID). RFID is a system of installing tags containing tiny computer chips on, say, supermarket items. These chips automatically radio the location of the item to a computer network where inventory data is stored, letting store managers know not only where the item is at all times but also when and where it was made and its color and size. Proponents believe RFID cuts costs and simplifies inventory tracking and reordering. It may also allow marketers to respond quickly to shifts in demand, avoid under- and overstocking, and reduce spoilage by automatically removing outdated perishables from the shelves. Privacy advocates, however, think the chips provide too much product-preference information that might be identified with individual consumers. In the meantime, Walmart requires its major suppliers to use the new technology on products stocked by the giant retailer.

How can marketers reassure consumers about privacy concerns if RFID comes into widespread use?