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Walmart To Use RFID To Improve ‘Store Level’ Inventory Accuracy In Home Goods, Consumer Electronics

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Given Walmart’s sheer size, it's a big deal any time it expands its use of RFID technology to improve the capabilities of its stores. And that’s precisely what has happened.

As reported recently in RFID Journal, Walmart’s US division has advised its suppliers that it is extending its tagging requirements to products in many new merchandise categories. By September these items will need to be arriving in Walmart’s stores with RFID smart labels. 

This is a very clever move on Walmart’s part. And though 2022 is still young, some people think this may turn out to be the year’s biggest Omnichannel Retailing news story. 

Expanding Beyond Apparel & Footwear

Back in 2019, Walmart USA directed all suppliers of Apparel, Footwear, Sunglasses and Watches to begin applying RFID tags to merchandise. Much of the Jewelry category was included too. Walmart now also uses RFID to manage its inventory of Tires.  

Fast forward to 2022.  Some of the new categories are:

·     Consumer Electronics (think TVs, Xboxes)

·     Wireless (think Mobile Phones, Tablets, Accessories)

·     Kitchen & Dining

·     Home Décor

·     Bath & Shower

·     Bedding

·     Furniture

·     Storage & Organization

·     Car Batteries

As reported by Advertising Age, Walmart’s memo to its suppliers includes the following statements:

1.   “Over the last year, we have successfully implemented RFID technology in our Apparel departments and have seen dramatic results.”

2.   “We have improved On Hand Accuracy, which has grown Online Order Fulfillment. These dramatic improvements have had major impacts on Sell Through and customer satisfaction.”

3.   “With the success of this initiative, Walmart plans to continue expanding this program to other departments and categories. RFID will help improve Inventory Accuracy, which leads to a better in-store shopping experience for customers, more online and pick-up in-store capabilities and greater sales opportunities.”

Putting This In Context

Walmart is known for offering good merchandise at great prices. Being able to say “even Walmart puts RFID smart labels on its Apparel or Home Goods or (you name the product)” is very powerful. 

Most people don’t realize this, but back around 2011 Walmart USA was set to require all Apparel and Footwear to be tagged. Unfortunately, some patent litigation created a delay. It was resolved a couple years later. But by the time the dust settled, “store level” inventory accuracy was overtaken by other competing Walmart initiatives. 

Let that sink in for a moment. A decade ago, the Retail industry was essentially at a point where even Walmart was using RFID on all of its Apparel and Footwear. While it’s true that the cost of RFID tags decreased further in the interim, by 2011 they were cheap enough to generate sufficient ROI — not just for Walmart, but for all companies selling Apparel and Footwear at price points higher than Walmart’s.

By the time of Walmart’s 2019 directive to its Apparel and Footwear suppliers, Target had beaten it to the punch by a full two years. And Target’s program included all Soft Home goods, not just Apparel and Footwear. Overseas, UK retailer Tesco’s rollout in the Apparel category was well underway by 2015, and C&A’s rollout in Apparel took flight by 2016.  By then Macy’s had made RFID tagging a formal requirement for the vast majority of its merchandise too. Nordstrom, Belk, and Dillard’s have now done so as well.

The fact that there isn't a single product in Walmart’s recent expansion that isn’t already being tagged for at least one other retailer doesn't diminish the significance of this news from Bentonville. 

Walmart Stores In Other Countries

There is no word on when Walmart stores outside America will begin using RFID too. I spoke with Myron Burke, a former Walmart executive who guided much of the company’s Store Innovation work from 2007 onward, until leaving the company in 2019. Many within the retail community regarded him as the face of the RFID program at Walmart. According to Burke, in countries outside the US, Walmart typically leaves it to the discretion of the CEO leading Walmart’s business in that country to decide whether and how they will begin participating in such initiatives.

That being said, Burke believes that Walmart Canada is the strongest candidate to be next to give RFID capabilities to its stores, followed by Walmart Mexico. Relative to other Walmart businesses around the world, Walmart Canada and Walmart Mexico have the most overlap with Walmart USA in terms of the cores of their IT platforms. They therefore have more that can be immediately leveraged if they wish to move forward with RFID.

It’s now fair to wonder when Walmart Canada or Walmart Mexico might make announcements of their own.

The Bottom Line

Apparel and Footwear are the categories where RFID proliferated first within Retail. But there has also been a steady uptick in other major consumer product categories in recent years. Walmart’s wise decision to improve its Store Level Inventory Accuracy in Home Goods, Wireless and Consumer Electronics will now shine the spotlight on the value RFID has already been delivering in these other market sectors.

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