Walmart & RFID: Why RFID for retailer ?

Introduction

Recently, news broke that Wal-Mart officially submitted a patent for seamless delivery, but for the retail giants, automation is nothing new. Let's take a look at the ways that Wal-Mart uses RFID technology to automate processes and improve business operations.

If any company wants to thank the public for raising RFID, it is Wal-Mart.

In 2003, the public knew almost nothing about RFID technology. However, this situation quickly changed when the retail chain announced that it would require its top 100 suppliers to attach RFID tags to all inbound containers and pallets. Last year, Wal-Mart launched an RFID-based inventory tracking trial. The trial only had 7 stores in Texas and 8 product suppliers participated.

In addition to shipments, electronic products such as televisions, CDs, and stereos are also individually marked due to their high value. Wal-Mart is trying to gradually increase the number of stores involved, with the goal of implementing RFID technology company-wide by the end of 2006.

Wal-Mart’s decision makers believe that the company lacks sales and customer satisfaction due to inaccurate inventory levels. They hope that the enhanced supply chain visibility and more accurate ordering decisions provided by RFID can solve these problems.

In response to Wal-Mart’s announcement, many other large retailers have begun experimenting and/or adopting RFID, including BestBuy, Target and Home Depot, as well as European chain stores Tesco and Metro Stores.

Hard start

Although it is obvious that Wal-Mart's RFID program is valuable, the initial development of RFID technology has brought some initial problems. E.g:

1. RFID tag purchase-because the system is a new process for product suppliers and Wal-Mart, it is not clear who is responsible for purchasing tags, which is a huge obstacle.

It can now be understood that whether a supplier or a retailer buys RFID tags, once the goods are on the shelves, the cost of the tags will be included in the total price.

2. Acceptable read rate-Some areas of Walmart strive to obtain an acceptable read rate, and a large portion of the tags cannot be read. Many of these problems are due to the box containing or made of materials thatinterfere with radio frequency waves, such as metals and liquids.

Today, this problem can be solved with special tags and other mitigation techniques. These options include incorporating walmart RFID tags specifically for water or metal, or adding radio frequency (RF) absorbing materials.

Today, RFID systems can usually achieve an average read rate of 98-100%. This number may be slightly different, depending on the type of RFID system used, the type of items to be marked, and how the marked items are stacked.

3. Invalid adhesives-some labels have ineffective adhesives, causing them to separate from the shipping pallet or even unreadable.

The adhesive used on walmart RFID tag is now more flexible. Now, many RFID tags can also be customized with industrial-strength adhesives, or adhesives that can withstand certain environmental factors (such as heat or water).

4. Label cost-The walmart RFID label used to track Walmart shipments are not as cost-effective as they are today. Although the current average price of a label is $0.08-0.15, the average price in the early 2000s was $0.50-0.75. Since RFID has not been widely used at this time, the manufacturing costs and hidden costs of this technology are usually higher.

Today, all Wal-Mart locations in the United States use RFID to track purchases and merchandise at the sales site.

RFID can continue to revolutionize the way Wal-Mart and other major retailers operate in the following ways:

Walmart

Inventory visibility: By using RFID to manage inventory, companies such as Wal-Mart can improve shopping efficiency with physical retailers. One way Wal-Mart does this is to digitize inventory information. By providing accurate inventory information online, customers can view which products are currently available in each store, and can also order out-of-stock products.

Customer convenience: Wal-Mart also provides a grocery store pickup system, where customers can purchase goods online and then retrieve the goods from the store when they are ready. Some locations also provide grocery delivery services. If RFID is not used to track the quantity and location of goods in the store, then this grocery store system may become expensive and inefficient.

In conclusion

Throughout the history of the partnership between Wal-Mart and RFID, the two have helped each other develop and grow. RFID technology is now more advanced overall, and the average price per tag is now cost-effective. Due to these advancements, it is now easier to use tags in large numbers to identify the location of shipments and products on the sales floor.

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