Can you please discuss the breakdown of funding that the retailer invested in order to deploy radio frequency identification within its supply chain?
—Name withheld
———
That’s a question to which only a few people within Wal-Mart know the answer—and they’re not going to share that information publicly, I’m sure. I do recall that one senior executive said there would be no special funding set aside for the RFID deployment, and that the funds would come out of the company’s annual IT budget (which is, no doubt, a fairly large sum).
While preparing our Fashion Retail ROI Calculator (click here for more information, and here to download the Calculator), we performed an analysis of what it would cost to outfit a typical apparel retail store with an RFID system, and came up with a ball-park figure of $50,000 per store. That includes:
• Three fixed interrogators
• Two handheld readers
• 75,000 tags
• A software license
• Software maintenance and support
• Software integration
• Professional services
• Hardware maintenance
• Corporate overhead (IT and other)
• Cost of capital
Wal-Mart’s per-store costs would likely be a little higher, as the company would probably require a greater number of handhelds, and might have more fixed readers installed at the back of each store, as well as between the back room and the sales floor. Wal-Mart also invested a considerable sum in a lab at which it tests applications and the ability to read products on tags.
But costs are rarely mentioned these days as a reason to not deploy a system. Rather, end users often tell me there are competing priorities, or that their organization simply will not consider deploying RFID until others do so first and prove the technology’s benefits.
—Mark Roberti, Editor, RFID Journal