Future shop

DULUTH, Ga. -- With two touches on a computer screen, Dan White chooses a faded pair of five-pocket Calvin Klein jeans in a size 6. Seconds later, a tag on the pair he picked flashes, calling out from stacks of neatly folded jeans.

Moving to the left of the Calvin Klein display, White pushes a cart of groceries through a portal of metal pipes. Before White lifts a hand, a nearby register rings up the 18 items in his cart. To pay the bill, he touches a fingerprint reader on the register's screen.

''We've done a lot of testing to get this to work," he says.

White is the technical evangelist for radio-frequency identification, or RFID, in the retail solutions division of NCR Corp. Founded in 1884 as National Cash Register Co., the Georgia outfit is the nation's top seller of bar-code scanners and self-checkout machines. To keep step with the times, however, NCR is investing in present and future applications of RFID for industries from retail to finance.

The buzz around RFID has built steadily over the past two years. Like the Internet, analysts say, RFID will touch every part of a retailer's business. Using wireless technology inside tiny chips -- or smart tags -- RFID can track a product from the factory floor to store checkout. For retailers, the technology promises lower labor costs, more efficient inventory management, and the ability to market to individual shoppers.

For customers, it could eventually mean no standing in checkout lines, no rifling through piles of clothes just to find your size is gone, no waiting half dressed in fitting rooms while sales people disappear into stock rooms, no-hassle returns, and the ability to know in exacting detail where and how products were made.

Many of these applications are years away, hampered by the costs of RFID tags (50 cents a piece compared to fractions of a penny for a barcode), technical limitations (radio frequencies don't pass through metal), and privacy concerns (for example, RFID technology could let retailers to know who you are as soon as you enter a store). Despite the challenges, however, retailers are moving ahead because they simply can't afford to lag behind.

''It's absolutely critical for manufacturers and retailers of any size to devote even just two or three people to study and keep track of what's happening with RFID," said Gib Carey, a partner in Bain & Co.'s Chicago office. ''The stars aren't aligned right now. But these technologies evolve so rapidly that if they're not paying attention, they'll fall behind."

Fashion house Prada experimented with RFID in a New York store, allowing people to save shopping preferences on customer cards and scan RFID tags on shoes, clothes or bags to view alternate color swatches or watch videos of models parading the items on catwalks. At a grocery store in Yamata, Japan, shoppers can scan a tag on a cut of beef to learn about its lineage -- they can verify a cow's test results to calm concerns about mad cow disease, read about the ranch where the cow was raised, and view pictures of the farmers who raised it.

But RFID's more immediate application for retailers is largely in the back room: to automate inventory processes, better manage stock levels, and move products quickly onto store shelves. Wal-Mart Stores Inc., the world's largest retailer, is ordering its top 100 suppliers, including consumer product giants Gillette Co. and Procter & Gamble Co., to place RFID tags on pallets and cases delivering products to its stores starting in January.

Other big retailers and grocery-store chains such as Target Corp., Best Buy Co., and Albertson's Inc. are taking similar measures. After testing the use of RFID tags in its supply chain, German retailer Metro AG reported an 11 to 18 percent reduction in losses and theft, a 17 percent reduction in labor costs, and a 9 to 14 percent increase in the availability of merchandise on store shelves. Even so, Metro executive Gerd Wolfram said, ''it will be 10 to 20 years before individual products carry chips."

Certain applications, like automatic checkout, require that everything from gum to cereal be equipped with RFID tags. And considering that gum costs 50 cents, analysts question if RFID tags will ever be cheap enough for that.

''I think RFID and barcodes will co-exist for a long time," said Sanjay Sarma, chief technology officer at OATSystems Inc. in Waltham and an associate professor of mechanical engineering at Massachusetts Institute of Technology. ''But it is clear to me that RFID tags will get to a point where they are financially feasible."

NCR's RFID lab is at once a reminder of how close and how distant the technology is to the average shopper. White has equipped the lab with a checkout scanner that read both barcodes and RFID tags. He and his colleagues created a device he calls the ''killer kiosk" for its ability to disable RFID tags to protect shoppers' privacy after they leave the store.

But parts of the high-tech operation are decidedly low-tech. White mounted a Roomba, a robotic vacuum, onto the wheels of a remote control car to create a moving RFID reader. He built the checkout portal out of metal pipes and spray painted them black.

And the checkout experiment only works when he chooses his grocery items carefully. White goes through the portal again, this time with a shopping basket. The RFID scanner only reads four of the items and accidentally tallies items from a nearby shopping cart. Since metal interferes with the radio-frequency signal, the reader didn't scan the Lays potato chips (the bag is made of foil) or the pop tarts (wrapped in foil) or the can of green beans.

''There are so many potential scenarios for RFID's uses," White says, as he gets down on his knees to redirect the Roomba. ''But there's also still a lot to figure out."

Naomi Aoki can be reached at naoki@globe.com.