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Does Walmart Use RFID?
If so, to what extent?
I cannot answer that question definitively, but I will tell you what I know. In years past, Walmart was gung-ho on deploying RFID on all apparel, as well as on other products involving complex inventories (see Wal-Mart Relaunches EPC RFID Effort, Starting With Men's Jeans and Basics and Wal-Mart's President Says EPC RFID Strategy Is Working). Complex inventories involve products with a lot of different versions of the same item. For example, automobile tires all look similar but are different. Many electronics products look different but have different specifications. It is difficult to ensure that these are always in stock, and RFID helps by making it possible to quickly perform inventory counts of these items.
But then Walmart was sued by Round Rock Research, a company that owned several patents on ultrahigh-frequency (UHF) technology (see Update on the Round Rock Patent-Infringement Lawsuit, What the Round Rock Settlements Mean and Round Rock Completes Licensing Deals With Majority of RFID Vendors). The company went after large end users, rather than suing the companies that make RFID products.
Round Rock was suing not for a licensing fee—it instead wanted a cut of the benefits that businesses derived from deploying RFID. If Walmart saved, for instance, $50 million annually from RFID, Round Rock wanted a percentage of that amount. I believe this spooked Walmart. If it lost the case and had to provide a percentage of the profits, that would encourage every technology firm to sue and ask for a percentage of the profits. It would also present an administrative nightmare to determine what the benefits were, and Walmart would have to open its books to a degree that would, no doubt, be uncomfortable.
So Walmart suspended its RFID program. Suppliers still put tags on jeans shipped to Walmart, but it is unclear whether the retailer used the technology while the court case was ongoing. Technology companies that supply RFID tags and readers to Walmart have settled, so the retail giant could resume its RFID program without fear of being sued by Round Rock, but it is unclear whether it has yet done so or not. My guess is even if the program has not yet restarted, it will eventually. The retailer is well aware how much value the technology can deliver.
—Mark Roberti, Founder and Editor, RFID Journal
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