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J.C. Penney Pauses RFID Efforts

A troubling decline in sales has had an impact on the retailer's RFID rollout.
By Mark Roberti
Feb 19, 2013—A couple of years ago, J.C. Penney began one of the largest rollouts of radio frequency identification technology in retail. Penney announced that it would RFID-tag all jeans, bras and shoes at its 1,100 stores. Then, in June 2012, at the Fortune Brainstorm Tech conference in Aspen, Colo., Penney CEO Ron Johnson announced that the retailer planned to begin placing RFID tags on 100 percent of its merchandise.

Johnson disclosed that the company expected to employ the technology to help it transform the way shoppers purchase goods at all its stores. During an interview at the conference conducted by Jennifer Reingold, senior editor at Fortune magazine, Johnson said Penney planned to accomplish something no other retailer has ever "done completely" before: "We are going 100 percent RFID with ticketing this fall. So February 1st next year, the entire Penney's platform will be on RFID tickets."

J.C. Penney CEO Ron Johnson

However, in a letter to suppliers dated Jan. 21, 2013, J.C. Penney said it "is modifying the rollout schedule of RFID tagging for merchandise categories. Until further notice, only the below merchandise sub divisions will need item level RFID tagging/labeling." The letter lists 41 separate product areas, but they all fall under the three categories Penney was already RFID-tracking: jeans, bras and shoes.

News that Penney is backing off its plans to greatly accelerate its use of RFID inevitably will be spun as another example that RFID didn't deliver on its promise. But that, in fact, is not the real story.
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