2-D or RFID: Which is better for item-level marking?

2-D or RFID? That's the question many companies face when they go to upgrade their item-level product identification systems from one-dimensional (1-D) bar codes. Compared with linear 1-D codes, both 2-D bar codes and radio-frequency identification (RFID) tags represent an enormous technological advance. But each system has its pros and cons, and choosing which road to take isn't always easy. In the end, the choice usually comes down to the user's intended application and the kind of information it needs to convey.

What RFID has going for it is that the technology does not require a line of sight for item visibility. With a bar-code symbol, whether 1- or 2-D, the machine or person wielding a scanner must be able to get a bead on the symbol in order to read it. There is no such requirement with RFID tags; they convey information wirelessly to an interrogator via an antenna.

Right now, RFID tags are primarily used to provide unique identification for items of fashion apparel or medications. In the case of pharmaceuticals, the tags are deployed to provide traceability, to guard against counterfeiting, and for brand protection, says Michael Liard, vice president at VDC Research. In the case of apparel, the tags are mostly used for inventory control and store visibility.

Historically, the big impediment to wider adoption of RFID technology has been price—and that's still the case today. According to the Automatic Identification and Data Capture team at the research firm Frost & Sullivan, so-called passive tags (which rely on an outside source for power) cost between $0.40 and $20 apiece, while active RFID tags (which contain a battery as a power source) go for between $10 and $50.

By contrast, it costs just a fraction of a cent to print a two-dimensional bar code on a packaged product. Furthermore, a 2-D matrix code allows users to pack a great deal of information into a small space. Because a 2-D symbol encodes data on both the X and Y axes, it can store more product data than a conventional linear bar code and, for that matter, most RFID tags can. Among other information, a 2-D symbol can encode a product lot number, date of manufacture, expiration date, manufacturer location, and distribution channel.

Another big advantage is that a 2-D bar code can carry a link to a website. A shopper with a smartphone can simply scan an item's code and be directed to a site for more information about the product. "2-D bar codes are used in marketing where you want to convey more information about the product to the consumer," says Richa Gupta, a senior analyst at VDC Research.

Although RFID was originally touted as a high-tech way to monitor supply chain movements, most companies using the technology for item-level tagging do so for reasons other than channel visibility. The primary reason companies opt for RFID-based item-level tagging remains asset management and surveillance. For instance, in a retail store, an RFID tag can trigger an alarm if a shoplifter attempts to walk out the door with the merchandise.

While theft deterrence may justify RFID costs for high-end merchandise, more companies are expected to opt for 2-D codes. "If you can get a line of sight, then the default goes to a 2-D bar code because ink on paper is pretty inexpensive," says Rick Bushnell, president of the consulting firm Quad II.

Other experts don't see the two technologies as an either/or proposition; they believe there's room for both, depending on the intended use. "While 2-D bar codes may be a barrier for RFID in some applications, we expect both 2-D bar codes and RFID to coexist for the most part," said Frost and Sullivan.