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AT A Tesco's supermarket in Cambridge, England, the shelves have begun to talk to their contents, and the contents are talking back. Soon, razors at a Wal-Mart store in Brockton, Massachusetts will begin to let staff know when they suspect theft. This spring, a group of firms will attempt to track, in real time, many thousands of goods as they travel from factory to supermarket shelf. Consultants tout cost savings and extra sales that could run into tens of billions of dollars a year.
The reason for the sudden buzz of excitement is a new, supercheap version of an old tracking technology called Radio Frequency Identification (RFID). RFID systems are made up of readers and “smart tags”—microchips attached to antennas. When the tag nears a reader, it broadcasts the information contained in its chip. In the past four years, the cost of the cheapest tags has plunged, from $2 to 20 cents. In the next two to three years, prices are likely to fall to five cents or less. Already, RFID tags are made in their millions and used to track pets and livestock, parts in car factories and luggage at airports. Last month, Gillette announced that it had put in an order for half a billion smart tags, signalling the start of their adoption by the consumer-goods industry. If they catch on, smart tags will soon be made in their trillions and will replace the bar-code on the packaging of almost everything that consumer-goods giants such as Procter & Gamble and Unilever make.
The inspiration behind the new, cheap tags is a partnership between academic researchers and business called the Auto-ID Centre, based in Cambridge, Massachusetts. Founded in 1999, the centre boasts 87 member companies, including the world's biggest retailers and consumer-goods firms. Traditional RFID tags, says Sanjay Sarma, the centre's research director, carry all their information. That makes them big and costly—fine in small numbers, but expensive in the sorts of quantities that the consumer-goods industry might want. Procter & Gamble, for instance, makes 20 billion products a year. So Mr Sarma has stripped the information his tags carry to the bare minimum—a single serial number. This serial number is unique, identifying the exact can of fizzy drink or bottle of shampoo on which it is stuck. But detailed information about the product—what it is, where and when it was made, and so on—is stored on a computer elsewhere, to be looked up as needed via the internet.

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