Wal-Mart Stores has signed up 138 manufacturers and expects more to join its test of radio-frequency ID tags (RFID) beginning in January 2005 in 150 Dallas-area stores. Eight manufacturers already are testing RFID tags on goods sold in Dallas Wal-Mart and Sam’s Club stores.
Wal-Mart plans to expand RFID tagging in the U.S. through 2005, with all suppliers tagging all cartons and pallets by the end of 2006. It could take 10 to 15 years before RFID tags are required on individual packages.
“Embrace this, because it’s going to happen,” said Ron Moser, Wal-Mart RFID strategic analyst, speaking at Information Resources, Inc.’s CPG Summit yesterday in San Diego.
“RFID isn’t just Wal-Mart. It’s for the entire [packaged goods] industry, and you [manufacturers] need to be part of it.”
Moser encouraged packaged goods marketers to get involved with the EPC Council that’s developing “electronic product codes” that will replace UPCs, in order to “be part of setting product design and standards,” Moser said. He also recommended that marketers form an internal RFID team to decide how to put tags on during manufacturing, and to analyze benefits beyond retail stock-keeping.
RFID data should reduce out-of-stock problems: An average 7.9% of products are out of stock at any given time. RFID will speed shipping, inventory tracking and consumer check-out in stores without adding labor costs, Moser told the IRI crowd. Bentonville, AR-based Wal-Mart will not endorse a single technology, and supports an open platform to make all RFID tags and readers from different vendors compatible.