Portfolio Companies

Future Store

Model Retail Store with Nano-enabled RFID Solutions

Operating Factories

Shareholders in Portfolio Company 
RUSNANO, SINTRONICS, X5 Retail Group

Industry Sector 
Other

Production Location 
Moscow

Investment Started:  2011

Total Budget

0.35  bln rubles
Co-investment by RUSNANO
0.12  bln rubles

Adaptation and improvement of RFID technology and implementation of an RFID tag system, via retail leader-integrator X5 Retail Group, to control consumer goods from manufacturer through retail sales via retail leader-integrator X5 Retail Group

This project will create technical solutions for introducing and exploiting RFID technology in the Russian Federation. If that effort, phase one of the project, is successful, the company-integrator will carry out an RFID demonstration project in retail trade.

RFID, radio frequency identification, tags are a modern method of identifying objects that is widely used by transnational retail food companies and transportation and logistics companies that work with them. RFID tags have many advantages over commonly used bar codes, and some day they may fully replace the older technology. RFID tags can accommodate significantly more information. Their useful lives are longer. They may be rewritten on numerous times.

RFID technology reduces expenses throughout the entire distribution and sales chain. Warehousing and turnover become more efficient thanks to RFID technology. Because the tags are an electronic certificate for the goods, they prevent counterfeit items from going to the consumer, improve control over vendors, and resolve costly problems with tracking and removing expired products—particularly important for drugs and other short-lived commodities.

Магазин будущего

The project plans to demonstrate the suitability of RFID technology by opening a pilot Future Store using X5 Retail Group as its base. X5 Retail Group owns supermarket chains Perekrestok, Pyaterochka, and Karusel. The store would open in 2013 and sell food and household goods. The project will also develop standards for the field, a prerequisite for changing the country’s normative and legislative base for retail trade and manufacturing.

Area of application

  • Retail operations

Market

  • Russian operators of retail trade outlets, suppliers of fast-moving consumer goods, transportation and logistics companies

Competitive advantages

  • Increases employee productivity
  • Raises inventory accuracy to virtually 100%
  • Reduces stock on hand
  • Raises sales through efficient restocking and targeted marketing activities

RFID (Radio Frequency Identification) is a method of automatically identifying an object marked with a special microchip, a tag. The tag is able to convey information, which has been written on its unique code, through a radiosignal to a reading device. Some types of tags can store additional data, write information that they accept from a wireless link to their internal memory, and carry out various operations with the data they have stored. The size of the chip used in the tags is 90 nm to 180 nm. The technology is taking the place of bar codes, and in the future, because of its many advantages, RFID tags may fully supplant bar codes.

The market for RFID technology includes sale of tags, reading equipment, components for production of the tags, software, and consulting services from vendors of ready-made RFID solution. In 2008 the global RFID market was valued at $5.3 billion compared with $4.9 billion in 2007. In 2018 the market for RFID systems is expected to rise more than fivefold to $27 billion, and the number of tags sold will increase 300-fold-thanks to lower product and service prices and better RFID infrastructure.

RFID technology is only beginning to be used in retail networks. Currently its implementation concerns a limited number of goods streams and involves only a handful of companies worldwide. Companies that have already recognized the potential and effectiveness of the technology in retail application include Wal-Mart, METRO, and Home Depot. They are requiring some of their largest vendors to attach RFID tags. Transnational food producers Coca-Cola, PepsiCo, Unilever, and others are supporting and developing the technology.