Wal-Mart’s RFID Refresh

PC World reports on comments made by Ron Moser, RFID strategy leader at Wal-Mart, at the Taiwan International RFID Applications Show last week in Taipei. This article has highlghts of Moser's comments.
Published: October 15, 2007

This article was originally published by RFID Update.

October 15, 2007—PC World reports on comments made by Ron Moser, Wal-Mart’s RFID strategy leader, at the Taiwan International RFID Applications Show last week in Taipei. Following are highlights:

  • RFID-enabled forklifts are currently deployed at 975 stores around North America.
  • Moser reiterated Wal-Mart’s belief in the eventual profound impact of RFID technology on retail. He noted that 41 percent of lost sales are due to inventory issues, and that if Wal-Mart could improve this figure by a relatively marginal 10 percent using RFID, it could recoup a whopping $287 million annually.
  • RFID proponents often invoke the adage “You don’t know what you don’t know” to express how the far-reaching benefits of RFID-enabled visibility are impossible to predict because they will emerge only once that very visibility has become a reality. Moser provided a great anecdote from bar code adoption as an illustration. When Wal-Mart started scanning bar codes at checkout in the eighties, it noticed that consumers often bought multiple units of the same item (a pack of gum or bar of soap, for example). The retailer shared this observation with the CPG manufacturers of these items, who then began offering multiple-unit packages. The manufacturers saved money on packaging, and consumers saved on an early form of bulk purchasing. Prior to bar code-enabled visibility, such buying patterns were hidden from the retailers’ and manufacturers’ purview. Similar types of revelations are expected from RFID.

Moser’s comments come amid a renewed focus on Wal-Mart’s RFID plans. At the EPC Connection conference in Chicago the week before last, the retailer announced three new initiatives that signal a change in direction away from the sweeping mandate and toward tighter applications testing.

The first initiative will see suppliers tag pallets destined for a Sam’s Club distribution center in Texas. With RFID infrastructure embedded in the DC’s forklifts and shelves, the retailer will be able to track the pallet putaway process, something currently managed with bar codes. The second initiative is promotions tracking, for which Wal-Mart suppliers running promotions will tag the cases and pallets of the promoted products. (Promotions tracking has emerged as a sweet spot for RFID, since the correct, timely placement of in-store promotions has long been sloppily executed and hard to enforce.) The last initiative will focus on tagging all products within a particular category; in this case, air fresheners.