Plan had raised concerns over privacy of consumers

By Hiawatha Bray, Globe Staff, 7/10/2003

ustomers at the Wal-Mart store in Brockton won't be getting miniature radio transmitter chips with their Gillette Mach 3 razors, after all.

Boston-based Gillette Co. and giant retailer Wal-Mart Stores Inc. have backed away from plans to test the controversial chips at the Brockton Wal-Mart store. ''We didn't do the test, and we're not going to,'' said Wal-Mart spokesman Tom Williams.

Williams said the decision reflected a change in business strategy, rather than a reaction to an Internet-based campaign against the technology, known as radio frequency identification, or RFID.

Privacy advocates were concerned that the technology would be used to track consumers' purchases without their knowledge or consent.

But a leader of the campaign against the technology, Harvard University graduate student Katherine Albrecht, said she thinks public pressure drove the decision. ''I think they're running scared,'' said Albrecht, founder of Consumers Against Supermarket Privacy Invasion and Numbering. ''I think they're retreating because they've realized that they've got a real dog on their hands.''

RFID technology is being touted by some experts as the logical successor to the bar codes found on virtually every retail product. Each chip, the size of a pinhead, transmits an identification code when it comes within a few feet of a special detector. If RFID-tagged cartons of Gillette razors were brought to one of Wal-Mart's 103 US distribution centers, a detector mounted at the loading dock would instantly detect their radio signals and add them to inventory. Williams said this kind of automatic inventory control would bring large cost savings, and Wal-Mart plans to deploy such systems in its warehouses by 2005.

But the company had planned to go even further, by putting the tags onto individual Gillette products, which would then be stocked on a ''smart shelf'' at the Brockton Wal-Mart. When a customer picked up an item, the chip would notify a detector on the shelf, which would inform the store's inventory computer. If a customer picked up an unusually large number of razors, the system could be programmed to identify him as a possible shoplifter and record his picture with a digital video camera.

News of the Wal-Mart test alarmed privacy advocates like Albrecht, who fears products with RFID tags could let companies snoop on the private lives of consumers. Earlier this year, similar fears led the Italian clothing firm Benetton to abandon a plan to put the chips in some of its clothing lines. Critics warned a consumer wearing such clothes could be identified the moment he passed a detector, perhaps one mounted at the entrance to a shopping mall. Benetton insisted that it had no such intention, but gave up on using the chips anyway.

Wal-Mart, meanwhile, had begun building a prototype smart shelf at the Brockton store this spring. But recently the company had a change of heart. Williams said criticism from privacy activists had nothing to do with it.

''We just never followed through,'' he said. Williams said Wal-Mart decided its distribution system was the best place to deploy the technology, not the shelves of its retail stores. ''That's where we really see the advantages for us, on the case and pallet level,'' he said.

Gillette spokesman Paul Fox said his company is still committed to retail testing of RFID technology. Indeed, the British supermarket chain Tesco began selling tagged Gillette products at a story in Cambridge, England, in January. And in April, the German supermarket chain Metro hired supermodel Claudia Schiffer to demonstrate the technology in Metro's ''future store'' in Schiffer's hometown of Rheinberg.

The Auto-ID Center of the Massachusetts Institute of Technology is a major site of RFID research. Kevin Ashton, the center's executive director, said he wasn't surprised Wal-Mart backed away from its plan to tag retail products.

''I think all these companies, not just Wal-Mart and Gillette, have been going through a process of figuring out what they want to do with this technology,'' said Ashton, ''and they're all coming to different conclusions.'' He added that Wal-Mart probably wasn't motivated by criticism from consumers. ''There hasn't been any great public outcry that I'm aware of,'' Ashton said. ''I'm not seeing the man on the street up in arms over this.''

Other US retailers are still interested in testing the technology. The Associated Press reported yesterday that the Rhode Island-based drugstore chain CVS Corp. plans to test the chips in packages of prescription drugs. A CVS spokesman told the Globe that no such tests are currently underway.

Hiawatha Bray can be reached at bray@globe.com.

This story ran on page C1 of the Boston Globe on 7/10/2003.
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