Tesco is considering the use of radio frequency identification (RFID) technology to improve its online shopping services.

The supermarket giant last year upgraded wireless picking and delivery systems in 300 stores to improve Tesco.com's services, and is now deciding whether to extend the technology later this year to include the scanning of RFID-tagged items or pallets.

Mike Yorwerth, Tesco.com director of operations and infrastructure, told delegates at last week's Multi Channel Retail Show in London that traditional barcode scanning functionality incorporated into terminals used by in-store pickers and online grocery delivery staff can be applied to RFID scanning.

'The new equipment used by our delivery drivers is part of the stock control processes already,' he said.

'It is an important area from a distribution point of view to Tesco. And we will look at RFID-enabling this part of the infrastructure later this year.'

Tesco upgraded its grocery order fulfilment equipment and systems for in-store picking and home delivery services in 2004, coinciding with an overhaul of the non-food areas of its web site.

The new in-store online order fulfilment devices can now process up to six orders simultaneously, taking the shortest possible route through the store, using custom-developed scanning and store-tracking functionality.

Both the in-store and the delivery devices cut down on manual processing and have improved the speed, accuracy and quality of customer service.

The company is also planning to diversify into non-food stores. Its financial results in January showed that its non-food market share rose from five to six per cent in 2004.

Yorwerth says Tesco has redesigned the back-office systems for its non-food online store, which could provide a blueprint for systems when the retailer opens its first non-food stores.

'Our non-food store pilots will not be part of the customer fulfilment model, but they will use similar technologies as used in the non-food part of our web site,' he said.

Tesco announced at the beginning of this year that it will extend its RFID trials to track the transportation of non-food products, such as DVDs, from its warehouses to its stores (Computing, 19 January).