Given the large size of Walmart, it’s important when it expands the use of RFID technology to improve the capabilities of its stores. And that’s exactly what happened.
As recently reported in the RFID Journal, Walmart’s U.S. division told its suppliers that it is expanding its labeling requirements on products of many new product categories. By September, these goods should arrive at Walmart stores with smart RFID tags.
This is a very smart move by Walmart. And although 2022 is still young, some people think it may be the biggest news of the year about omnichannel retail.
Extension beyond clothing and footwear
Back in 2019, Walmart USA ordered all suppliers of clothing, footwear, sunglasses and watches to start applying RFID tags to goods. Most of the jewelry category was also included. Walmart now also uses RFID to manage tire inventory.
The transition to 2022. Some of the new categories:
· Consumer Electronics (TVs, Xbox)
· Wireless communication (mobile phones, tablets, accessories)
· Kitchen and dining room
· Home decor
· Bath and shower
· Bed linen
· Storage and organization
· Car batteries
According to the Advertising Age, Walmart’s note to its suppliers contains the following statements:
1. “Over the past year, we have successfully implemented RFID technology in our apparel departments and achieved excellent results.”
2. “We’ve improved the accuracy on hand, which has increased order fulfillment online. These significant improvements have had a major impact on sales and customer satisfaction. ”
3. “Due to the success of this initiative, Walmart plans to continue to expand this program to other departments and categories. RFID will help improve inventory accuracy, leading to a better in-store shopping experience for customers, more online opportunities and self-pickup in the store, as well as more sales opportunities. ”
Putting this into context
Walmart is known for offering good products at great prices. The ability to say “even Walmart puts smart RFID tags on your clothes or household goods or (you name a product)” is very powerful.
Most people don’t realize this, but around 2011 Walmart USA was set up to demand that all clothing and footwear be labeled. Unfortunately, some patent litigation has led to delays. This was resolved a couple of years later. But by the time the dust had settled, the accuracy of the “store-level” inventory had been overtaken by other competing Walmart initiatives.
Allow this to dive in for a moment. Ten years ago, the retail industry was essentially at a time when even Walmart used RFID on all of its clothing and footwear. While it is true that the cost of RFID tags has dropped even more in the meantime, by 2011 they were cheap enough to generate sufficient return on investment – not just for Walmart, but for all companies that sell clothing and footwear at prices higher than at Walmart.
By the time the Walmart directive was adopted in 2019, clothing and footwear supplier Target was ahead of it by a full two years. And the Target program all Soft Home products are included, not just clothes and shoes. Overseas, British retailer Tesco deployed the apparel category in 2015 and C&A deployed apparel in 2016. By then Macy’s had made a formal RFID marking requirement for the vast majority of its products. Nordstrom, Belk and Dillard’s have now done the same.
The fact that in the recent Walmart expansion there is not a single product that would not be labeled for at least one other retailer does not diminish the significance of this news from Bentonville.
Walmart stores in other countries
There is no information on when Walmart stores outside of America will also start using RFID. I spoke with Myron Burke, a former Walmart CEO who has managed most of Store Innovation’s work since 2007 until he left the company in 2019. Many retailers considered him the face of Walmart’s RFID program. According to Burke, in countries outside the U.S. Walmart usually leaves it to the discretion of the CEO who runs Walmart’s business in that country to decide whether and whether they will participate in such initiatives and how.
However, Burke believes that Walmart Canada is the strongest candidate to provide RFID capabilities to its stores, followed by Walmart Mexico. Compared to other Walmart companies around the world, Walmart Canada and Walmart Mexico are the most similar to Walmart USA in terms of the cores of their IT platforms. So they have more that can be used immediately if they want to move forward with RFID.
Now you might wonder if Walmart Canada or Walmart Mexico can make their own ads.
Clothing and footwear are the categories where RFID is prevalent first in retail. But recent years have also seen steady growth in other major categories of consumer goods. Walmart’s wise decision to increase the accuracy of in-store inventory in home goods, wireless and consumer electronics is now to highlight the value that RFID already provides in these other market sectors.