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Reading P&G's Tea Leaves

When Procter & Gamble told its third-party packagers to stop putting RFID tags encoded with Electronic Product Codes on promotional displays bound for Wal-Mart, it set off a wave of speculation among providers of radio frequency identification technologies, other Wal-Mart suppliers and journalists who cover the industry. Why did P&G do it, and what does it mean?
By Mark Roberti
Apr 01, 2009Procter & Gamble (P&G) told RFID Journal that the "validation work" it was doing with Wal-Mart to determine whether EPC RFID could be used to improve promotions execution was finished, so there was no reason to continue tagging. A company spokesperson also said: "The use of EPC requires deep levels of collaboration between the manufacturer and the retailer, and a commitment to use the actionable visibility provided by the EPC to change business processes."

An executive at an RFID technology company cautions against reading too much into P&G's decision.

Reading between the lines, it appears P&G was unhappy that Wal-Mart was asking it not only to tag the displays but also to hire merchandisers to go into the stores and alert Wal-Mart associates to put the displays out if they were still in the back room. The feeling at P&G seems to be that if Wal-Mart wants the supplier to pay for the tags, then it should act on the data the tags provide and have its associates get the promotional displays on the floor.

RFID Journal's interpretation is that the $84 billion consumer packaged goods company was telling the $400 billion retailer that it wouldn't absorb the cost of the tags if Wal-Mart wasn't going to take action that would enable both companies to benefit.

There were different interpretations, though no one wanted to go on the record when sharing them with RFID Journal. One person at P&G said the tagging of displays was a separate project with separate funding, and when the initial budget was expended, it was not renewed, so tagging had to be halted.
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