The controversy began with press reports that the company would incorporate RFID tags in its clothing for inventory purposes, which sparked outbursts from privacy advocates.
RFID technology can serve as an alternative to a bar code, its advantage being that it does not require scanning by hand. A tag, which acts as a transponder, is embedded in a product. An antenna transmits a signal that activates the tag. When activated, the tag sends data back to the antenna, which can be used to trigger an event, such as opening a door, or, in Benetton's case, to evaluate a sales process. Expensive systems will work at ranges of more than 90 feet.
Following Benetton's announcement of its interest in RFID technology, US privacy group CASPIAN (Consumers Against Supermarket Privacy Invasion and Numbering) called for a worldwide boycott of Benetton, claiming that the chips had already begun appearing in Benetton's 'Sisley' clothing line.
CASPIAN referred to an initial press release issued jointly by Benetton and Philips Electronics, the chosen tag provider, which stated that the devices are "imperceptible to the wearer and remain in individual items of clothing throughout their lifetime."
The privacy groups likened the technology to the film 'Minority Report,' where clothing tags were used to identify individuals and target them for advertising.
CASPIAN founder Katherine Albrecht warned that Benetton's chips could be used for more than just unwanted advertising. "Benetton could easily link your name and credit card information to the serial number in your sweater, in essence 'registering' that sweater to you," she claimed. "Then any time you go near an RFID reader device, the sweater could beam out your identity to anyone with access to the database – all without your knowledge or permission."
CASPIAN called upon consumers in all 120 countries where Benetton products are sold to avoid Benetton products until the company publicly renounced its involvement with RFID tracking technology.
Benetton has not renounced its involvement; but it has toned down its level of interest, presumably to the disappointment of those who see RFID as a potential goldmine in sales and marketing.
The company said:
"Benetton, which has always been a leader in technological innovation in the clothing sector, is currently analysing RFID (Radio Frequency Identification) technology to evaluate its technical characteristics and emphasizes that no feasibility studies have yet been undertaken with a view to the possible industrial introduction of this technology.
"On completion of all studies on this matter, including careful analysis of potential implications relating to individual privacy, the company reserves the right to take the most appropriate decision to generate maximum value for its stakeholders and customers."
In fact, what CASPIAN does not mention is that the 'Minority Report' scenario is present-day retail reality.
Since April 2002, RFID tags have been used by Prada in the designer clothing company's flagship Manhattan store. The tags, provided by Texas Instruments, are embedded in customer loyalty cards to personalise the shopping experience. In the dressing rooms, RFID readers identify all merchandise a customer brings inside and an interactive video touch screen displays information on the garment. From the touch screen, customers can access product specifications as well as alternative and complementary items and accessories.