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Wal-Mart Relaunches EPC RFID Effort, Starting With Men's Jeans and Basics
Burke declines to discuss specific benefits that either Wal-Mart or its suppliers might derive from this tagging initiative, but says that the pilots it has run suggest using EPC RFID tags will improve inventory accuracy and on-shelf availability. Research conducted by the University of Arkansas' RFID Research Center indicates that RFID can improve inventory accuracy from 65 percent to better than 95 percent (see Dillard's, U. of Ark. Study Quantifies RFID's Superiority to Manual Inventory Counts, Bloomingdale's Tests Item-Level RFID and RFID Delivers Speed and Accuracy for Apparel Retailers).
The new initiative will not currently require every apparel supplier to tag all individual items. Instead, Wal-Mart will work with suppliers of goods that have certain attributes that determine how much value EPC RFID tagging can deliver. So some apparel items, such as seasonal products that only remain in a store for a few weeks, might not be tagged, while other items that share the same attributes as jeans and basics will be tagged.
"We are focused on items that require a more complex purchasing decision by the customer," Burke says. "With denim, the customer has to make a decision based on brand, style, size and cut, in addition to price, of course. There are other areas of the store where we sell items with similar attributes. Tires are one. Some electronics items, such as TVs, are another."
According to Burke, there are no immediate plans to begin tagging these other types of items. Rather, Wal-Mart is starting with denim and basics, deploying new store operations that are scalable and easy for store associates to adopt, and it will then work with suppliers to tag other types of items, for which Wal-Mart feels EPC RFID item-level tagging will deliver business benefits.
"The effort is business-driven now," Burke says. "As we see positive results in denim and basics, we expect that business managers will want to expand the effort to categories that share similar attributes. But we are sensitive to the impact this will have on suppliers. We will give them time to engage, review their processes and ultimately change their processes. We don't want to accelerate unnecessarily and put undo pressure on them."
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The new initiative will not currently require every apparel supplier to tag all individual items. Instead, Wal-Mart will work with suppliers of goods that have certain attributes that determine how much value EPC RFID tagging can deliver. So some apparel items, such as seasonal products that only remain in a store for a few weeks, might not be tagged, while other items that share the same attributes as jeans and basics will be tagged.
"We are focused on items that require a more complex purchasing decision by the customer," Burke says. "With denim, the customer has to make a decision based on brand, style, size and cut, in addition to price, of course. There are other areas of the store where we sell items with similar attributes. Tires are one. Some electronics items, such as TVs, are another."
According to Burke, there are no immediate plans to begin tagging these other types of items. Rather, Wal-Mart is starting with denim and basics, deploying new store operations that are scalable and easy for store associates to adopt, and it will then work with suppliers to tag other types of items, for which Wal-Mart feels EPC RFID item-level tagging will deliver business benefits.
"The effort is business-driven now," Burke says. "As we see positive results in denim and basics, we expect that business managers will want to expand the effort to categories that share similar attributes. But we are sensitive to the impact this will have on suppliers. We will give them time to engage, review their processes and ultimately change their processes. We don't want to accelerate unnecessarily and put undo pressure on them."
