Japan promotes use of electronic tags over barcodes in bid to boost productivity

JIJI

The industry ministry is stepping up efforts to introduce electronic tags, aiming to improve productivity in the retail sector in the face of an acute labor shortage.

The Economy, Trade and Industry Ministry 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 significantly, supporting the survival of convenience stores in sparsely populated areas. That would be a boon for the elderly and other people with limited access to shopping facilities.

Electronic tags have already been introduced to a limited extent in the United States, Europe, China and some other countries.

An electronic tag system could sharply reduce the number of workers needed at cash registers and for inventory management. 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 priced at around ¥5 each, down from an initial cost of ¥20. For a wider introduction at convenience stores, the price needs to fall to ¥1, industry officials said.

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

In March, METI signed an agreement with the Japan Association of Chain Drug Stores to conduct an 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.