Wal-Mart CIO Still 'Bullish' on RFID

Yesterday, I had a chance to meet with Rollin Ford, Wal-Mart's CIO, as well as several other senior executives from the company, who were in New York for the National Retail Federation's Big Show 2010 convention and exposition. The discussion was private, but I can say it confirmed something I have been writing about for the past year: Wal-Mart is not pulling the plug on its RFID efforts, and has, in fact, been actively pursuing ways in which to use the technology to improve its operations.

Here's what I can share with you: Ford participated in a panel discussion on innovations, with David Grooms, CIO of McDonald's, and Neville Roberts, CIO of Best Buy. The trio mainly discussed how the three well-run companies manage the deployment of new technologies and encourage innovation. Ford stressed that it must be the business need that drives innovation, not the technology—a notion with which I wholeheartedly agree.

The moderator never raised the subject of radio frequency identification, but when he took questions from the floor, I asked: "I've been reporting on retail for 20 years, and during that time, out-of-stocks has remained constant at 8 percent. Do the panel members believe new technologies could solve that problem—because, after all, the primary job of a retailer is to have product available when a customer wants to buy it?"

Rollin responded, "I think that's a set-up." The audience laughed. "We're still bullish on RFID," he reported, adding that Wal-Mart ran some apparel pilots last year that showed good results. He also indicated that the retailer plans to "eat what we cook." In other words, Wal-Mart manufactures some apparel items and controls its own supply chain, and the retailer plans to deploy RFID in that supply chain to determine the results. It will then share the benefits and best practices with its suppliers, which might want to achieve the same benefits from the technology.

Grooms told attendees that with 30,000 outlets, McDonald's has one of the largest supply chains in the world, and that it has always looked for ways—"including RFID," he indicated—to better mange that supply chain. Roberts, meanwhile, noted that Best Buy was considering a hosted solution for managing DVD inventory.

The moderator seized on my question to ask how many audience members believed RFID tracking, or something like it, was inevitable in retail. I would say approximately 30 percent to 40 percent of the folks in the room raised their hands. That's probably a huge increase from a few years ago, but it's surprising that so many retailers still don't understand RFID. The good news from the session, however, is that Wal-Mart still gets it.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog or click here.