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Advertising Age reports that drugstore chain Walgreen is working with 15 consumer packaged goods companies to create a system that will use radio frequency identification (RFID) tags to track promotional display activity in all of its more than five thousand stores.

“The system, touted by one retail expert as potentially the biggest advance in store promotion in decades, uses RFID to electronically track when, how long and where displays are placed in stores,” Ad Age writes. “That allows marketers to track results of promotions by store or demographic cluster. It also lets participating manufacturers time local, regional or national advertising according to when displays are in place and send representatives to stores that haven’t put up displays.”

The system was created by Goliath Solutions. While Walgreens and Goliath are not identifying the participating manufacturers, they are believed to include Procter & Gamble and Kraft Foods.

While the system is designed to give both the retailer and its vendors immediate feedback on how promotions are working, Ad Age notes that one of the drawbacks is cost – the battery-powered RFID tags being used in the test cost $6 apiece, unlike the “passive” tags that are being used in other tests that cost under a buck. This could increase the cost of promotions, though it us as yet unclear whether the increased sales and profits will compensate for the higher cost.
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