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Wal-Mart to Expand RFID Rollout by 500 Locations

Wal-Mart yesterday issued a formal announcement of its plans to "aggressively" move forward with the deployment of RFID. The giant retailer will implement the technology at an additional 500 stores and clubs before the end of its fiscal year (January 31, 2007), bringing the total number of RFID-equipped locations to over 1,000.
Sep 13, 2006This article was originally published by RFID Update.

September 13, 2006—Wal-Mart yesterday issued a formal announcement of its plans to "aggressively" move forward with the deployment of RFID. The giant retailer will implement the technology at an additional 500 stores and clubs before the end of its fiscal year (January 31, 2007), bringing the total number of RFID-equipped locations to over 1,000. Given that the company has roughly 3,900 locations in the US, this expansion will mean that more than a quarter of them will have RFID by early next year.

In addition to the expansion plan, Wal-Mart reiterated its intention to completely phase out Gen1 technology in favor of Gen2. Recall that in April the company announced a sunset date for Gen1 of June 30th (see Wal-Mart RFID Initiative to "Continue Unabated"). Yesterday's announcement suggests that there is still some Gen1-tagged product in Wal-Mart's supply chain, but that as soon as it finishes passing through the system, the conversion to a Gen2-only infrastructure will be completed.

In addition to an expansion of the roll-out, Wal-Mart also cited "new initiatives" it is working on. "We are actively engaged in designing some new initiatives that will accelerate our program even further and, in so doing, create even more value for everyone involved. We'll announce those initiatives as we roll them out," CIO Rollin Ford was quoted as saying.

The announcement suggests that the decision to essentially double the RFID footprint at Wal-Mart is the result of two things: satisfaction with the RFID initiative generally and satisfaction with Gen2. "Recent internal analysis of our ongoing efforts, along with the launch of EPCglobal Generation 2 tags, reinforces the value of this technology for Wal-Mart, our suppliers and ultimately our customers," said Ford. The announcement also cited the University of Arkansas research that quantified a number of benefits to Wal-Mart due to the RFID deployment, most notably a 30% reduction in out-of-stocks for products selling between 0.1 and 15 units per day (see 30% Out-of-stock Reductions from RFID and Wal-Mart: RFID Reducing Out-of-stocks).

Yesterday's statement is surely welcome news to the EPC RFID industry, for which the retailer still represents the biggest driver of adoption. Wal-Mart is a fairly opaque company, so official pronouncements that shed light on its intentions carry considerable weight. "We're already fully convinced of [RFID's] value and are ready to step up the pace since we know we are only touching the tip of the iceberg when it comes to the benefits of this technology," said Ford. Such ringing endorsement of the technology is potent to be sure, but it is even more encouraging given that the words are backed-up with a near-term plan for expansion.

Read the official announcement from Wal-Mart
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