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Rusnano, X5 Retail Group, Sitronics joins in "Future Store" Ltd.

Rusnano, Sitronics and X5 Retail Group have signed partnership on "Future Store" project in middle of june 2011. The partners to invest 350 mln. roubles ($13.5 mln) during two years.

Rusnano share will be 116.7 mln. roubles ($4 mln.). The store will be launched in 2012-2013.

Rusnano's CEO Anatoly Chubais said that idea is to make all Russian retailer use this technology. According him, the primary goal is to make this technology viable. Anatoly Chubais estimates that RFID tags market will exceed 1 bln. a year only for Russian retailers.

At the same time, Vice Chairman of the Rusnano's Board Andrey Malyshev, assessing the impact of the RFID technology implementation in retail trade increased in the Russian market of RFID tags up to 50 billion a year.

In addition, during the project's it is need take into account the features of radio frequency identification, such as the effect of radio waves transmission through products containing liquids and metal surfaces or materials.

So, the problem is the possibility to loose key benefits of RFID technology in comparison to a bar code, such as the ability of group reading (identification of all buyer's goods right in the cart) and the ability to read the product without the need for product placement in the line of sight (when one covers the packaging of another item).

Also it is needed to note the western experience of implementing similar projects in the retail. The most striking project is implemented by Walmart - the largest retail merchant in the world. This project running for the last 8 years and still not yet fully realized, despite the significant cost estimated as billions of dollars.

In order to take advantage of the technology and the creation of a full supply chain, which allows to keep track of goods directly from the manufacturer until the sale to the end customer, Walmart announced it's mandate for tagging of products to their own suppliers.

According to AMR Research's report, a CPG manufacturer produces in average  about 50 million cases of goods per year. Costs incurred by the supplier in the implementation of technology is about $20 million. And since the Walmart has more than 100 major suppliers, their own costs in the project could exceed $2 billion. Apart from the company's own costs of system implementation.

It is needed take into account that the project requires the packaging to be replaced to ensure smooth tags reading, and the cost of specialized equipment for tagging of the goods.

Tags attaching to the package has some difficulties too, and we expect to have a solution for next several years, the technology of chipless tags, which is currently being actively developed. For example, Kovio recently received $15 million to develop new technology. Using these tags, it will be possible to atach them to the package by a special printer, and it can be done on a normal production line without the use of expensive equipment.

Drawing attention to these issues and understanding that a complete solution will reduce costs in a number of related industries, it can be achieved economic benefits across the country, while providing complete control over the quality and supply chain of the goods.

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