Walmart makes fashion statement with item-level RFID

July 26, 2010
In August Wal-Mart Stores Inc. will start attaching item-level RFID “smart tags” to jeans and underwear to improve tracking of these items. Using hand-held scanners, Wal-Mart workers will be able to assess needed inventory and ensure full shelves. Eventually these tags will be attached to other products—if this trial proves successful.

“Fashion apparel is unique,” says Bert Moore, founder of IDAT Consulting & Education, a consulting firm that helps clients understand, evaluate and select AIDC technologies and solutions. “There are eight weeks in a fashion season, and that’s not a lot of time if you consider it a perishable good. Styles change so frequently that retailers don’t want to get stuck with a lot of last season’s fashions. Knowing what’s there and making sure shelves are fully stocked is very important, especially if you have low margins. The way jeans can be put back in the wrong location by consumers makes that difficult, so RFID represents a real ROI.”

This is not the first time Walmart has tried item-level RFID. Four years ago they were applied to consumer electronic items. However the pushback felt from consumer privacy advocates had a chilling effect on any broadening of the effort. Now that privacy advocacy is more fragmented, the pressure has died down.

The next things to be tagged will probably be kitchen appliances and jewelry, Moore believes. Anything that’s hard to inventory is fair game. And CDs and shoes will give distributors an opportunity to consider RFID tagging. Where stores provide these distributors space for their racks of product, the stores get a percentage of the sales as rent. When unsold product is returned to the distributor, tagging makes sortation and restocking easier.