Given Walmart’s sheer size, it’s a big deal any time it expands its use of RFID technology to improve its store capabilities. And that is precisely what happened.
As reported recently in the RFID Journal, Walmart’s US division has informed its suppliers that it is extending its labeling requirements to products in many new merchandise categories. By September, these items should arrive in Walmart stores with RFID smart tags.
This is a very smart move on Walmart’s part. And while 2022 is still young, some people think this could turn out to be the biggest omnichannel retail news of the year.
Beyond clothing and footwear
In 2019, Walmart USA ordered all suppliers of clothing, shoes, sunglasses and watches to start applying RFID tags to merchandise. Much of the Jewelry category has also been included. Walmart now also uses RFID to manage its tire inventory.
Fast forward to 2022. Some of the new categories are:
Consumer electronics (think TVs, Xboxes)
Wireless (think cellphones, tablets, accessories)
· Kitchen and dining room
· Shower bath
Storage and organization
As reported by Advertising Age, Walmart’s memo to its suppliers includes the following statements:
1. “Over the past year we have successfully implemented RFID technology in our apparel departments and have seen dramatic results.”
2. “We’ve improved On Hand Accuracy, which has increased online order processing. These dramatic improvements have had major impacts on direct selling and customer satisfaction. »
3. “With the success of this initiative, Walmart plans to continue to expand this program to other departments and categories. RFID will help improve inventory accuracy, resulting in a better in-store shopping experience for customers, more online and in-store pick-up capabilities and greater sales opportunities.
Put it in context
Walmart is known for offering great merchandise at great prices. Being able to say “even Walmart is putting RFID smart tags on their clothes or household items or (you name the product)” is very powerful.
Most people don’t realize this, but around 2011, Walmart USA had to require all clothing and footwear to be labelled. Unfortunately, some patent litigation has created a delay. It was resolved a few 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 clothing and footwear. While it is true that the cost of RFID tags has fallen further in the meantime, in 2011 they were cheap enough to generate a sufficient return on investment, not only for Walmart, but for all companies selling clothing and footwear. at higher prices than Walmart.
By the time of Walmart’s 2019 directive to its apparel and footwear suppliers, Target had beaten it to the fist by two years. And the Target program includes all Soft Home products, not just Clothing and Footwear. Overseas, British retailer Tesco’s rollout in the Clothing category was well advanced in 2015, and C&A’s rollout in clothing took off in 2016. By then, Macy’s had also done RFID tagging a formal requirement for the vast majority of its wares. Nordstrom, Belk and Dillard have also done so.
The fact that there isn’t a single product in Walmart’s recent expansion that isn’t already labeled for at least one other retailer doesn’t diminish the importance of this news from Bentonville.
Walmart stores in other countries
It’s unclear when Walmart stores outside the United States will also start using RFID. I spoke with Myron Burke, a former Walmart executive who guided much of the company’s store innovation work from 2007 until he left the company in 2019. many in the retail community considered him the face of the RFID program at Walmart. According to Burke, in countries other than the United States, Walmart generally leaves it up to the CEO who runs Walmart’s business in that country to decide if and how they will begin participating in such initiatives.
That being said, Burke believes Walmart Canada is the strongest candidate to be next to give RFID capabilities to its stores, followed by Walmart Mexico. Compared to Walmart’s other businesses globally, Walmart Canada and Walmart Mexico have the most overlap with Walmart USA in terms of their computing platform cores. So they have more that they can immediately put to use if they want to move forward with RFID.
It’s now fair to wonder when Walmart Canada or Walmart Mexico might make their own announcements.
Apparel and footwear are the categories where RFID first proliferated in retail. But there has also been a steady rise in other major consumer product categories in recent years. Walmart’s wise move to improve its store-level inventory accuracy in household goods, wireless, and consumer electronics will now shine a light on the value that RFID has already delivered in these other market sectors.