Japan promoting electronic tags for retailers

May 3, 2018

Tokyo- Japan's industry ministry is stepping up efforts to introduce electronic tags, aiming to improve productivity in the retail sector in the face of acute labor shortages.

The Ministry of Economy, Trade and Industry has concluded an agreement with Seven-Eleven Japan Co., FamilyMart Co., Lawson Inc. and two other major convenience store operators for electronic tags to replace bar codes on all products sold in their stores by 2025.

If widely used in supply chains, electronic tags are expected to streamline inventory management and product distribution greatly, supporting the survival of convenience stores in sparsely populated areas, in a boon for the elderly and other people with limited access to shopping facilities.

In February, METI conducted tests at three locations in Tokyo, creating a system to share product information through electronic tags among manufacturers, distributors, store operators and other companies involved in supply chains.

The experiment at FamilyMart's store in the METI head office building, for example, involved the installation of an unmanned cash register that instantaneously read data such as the names and number of products sold and total prices through the tags attached to them. Shoppers paid for their goods with electronic money.

While electronic tags have already been introduced to a limited extent in the United States, Europe, China and some other countries, a senior ministry official said, "The experiment using a system of sharing information from electronic tags among all companies involved in a supply chain is probably the first in the world."

An average of 20 or so part-time employees currently work in rotation at a convenience store, according to METI.

An electronic tag system could sharply reduce the number of workers needed for inventory management and at cash registers. In addition, the sharing of sales data would enable manufacturers to optimize production plans and wholesalers to work out efficient delivery schedules.

Electronic tags are currently priced at around 5 yen each, down from 20 yen initially. For them to be introduced at convenience stores, the price needs to be lowered to one yen, industry officials said.

Technological advances are also needed for the widespread use of electronic tags. For example, no method of inserting tags in wrapping films for efficient merchandise shipments has yet been developed.

In March, METI signed an agreement with the Japan Association of Chain Drug Stores to conduct a demonstration experiment, after the collaboration with convenience store chains.

A further increase in participation in the ministry initiative by other sectors in the retail industry will be key.

Despite technological hurdles, the most important thing is for related businesses to be more serious about the introduction of electronic tags, a METI official involved in the project said.

"Companies are expected to focus on (technological) development if they recognize that electronic tags will really replace bar codes," the official added. Jiji Press