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Putting Wal-Mart's Apparel Tagging in Context
Here's what the news that the retailer is tracking inventory of men's jeans and basics means for EPC RFID adoption.
But what's even more significant is that Wal-Mart's initiative is one of the first major applications of EPC RFID in an open supply chain. Marks & Spencer, which uses 100 million tags annually, is a closed-loop supply chain, as are RFID deployments by American Apparel and Charles Vögele Group. To me, this is the start of real adoption in open supply chains.
There are other retailers in the United States that have conducted successful apparel pilots, including Dillard's, JCPenney and Macy's, and I believe that this time, more retailers will follow in Wal-Mart's path. And as they do, still more retailers will begin investigating the benefits of the technology, and more suppliers will be willing to put tags on apparel items. That will create the kind of momentum we never saw when the focus was on CPG products. As a large number of clothing items are tagged, tag prices will come down and even more companies will be enticed to use radio frequency identification. What's more, the growing use of RFID in the global apparel supply chain will likely be seen as a sign that the technology has reached a level of maturity and can be used on other retail products as well.
So yes, I do think this could be the start of more widespread adoption. I don't say that because Wal-Mart made the announcement. I say it because Wal-Mart's decision to tag apparel items was driven by real business benefits that others are seeing in their trials. Many people are skeptical about whether Wal-Mart will follow through on this EPC RFID effort, given that it didn't follow through on its plans to track pallets and cases, and that Sam's Club didn't follow through on its plans to track individual selling units. But this tagging initiative is different. There are real benefits for both retailers and their suppliers, which should move things forward. I believe Wal-Mart will follow through with tagging men's jeans and basics, and add new clothing categories and perhaps other products next year, and that will get a lot of other retailers to pay attention.
Over the past two years, I have come to see apparel as the thin edge of the adoption wedge. If RFID enters the tornado in apparel, to use Geoffrey Moore's term, that will do several things: It will generate profits for RFID companies, which can then be reinvested in new, more innovative products; it will drive down the cost of tags and readers, by increasing sales volume; and it will show those in every other industry that RFID is a mature technology that can be employed in their sector.
When history is written, the first RFID mandates might be seen as something of a warm-up exercise. Now, it seems, the games are about to begin.
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 the Editor's Note archive.
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