Everyone can quit guessing what next step Wal-Mart will take in its plan to test radio frequency identification (RFID) technology. According to a Wall Street Journal report on Friday, the world's largest retailer plans to tag individual men's jeans and basics (underwear and socks) to help it more effectively manage its inventory.
"This ability to wave the wand and have a sense of all the products that are on the floor or in the back room in seconds is something that we feel can really transform our business," Raul Vazquez, the executive in charge of Wal-Mart's stores in the western U.S., told the Journal.
Myron Burke, director of store innovation and the person leading the retailer's EPC program, told RFID Journal, "We are addressing the opportunity to improve inventory accuracy and inventory availability. We have been working collaboratively with suppliers on a strategic basis to make this part of our systems."
Interestingly, a RetailWire poll earlier in the month found 88 percent of respondents thought RFID would be somewhat or much more common in retailing in the next three years. Wal-Mart plans to roll out item-level RFID to other products in all of its 3,750 stores in the U.S. if the test on jeans and underwear is successful.
"We are focused on items that require a more complex purchasing decision by the customer," Mr. Burke told RFID Journal. "With denim, the customer has to make a decision based on brand, style, size and cut, in addition to price, of course. There are other areas of the store where we sell items with similar attributes. Tires are one. Some electronics items, such as TVs, are another."
According to Mr. Burke, apparel will be tagged when it is manufactured and will be ready as it arrive at stores' loading docks and moves to the sales floor. He told RFID Journal that the technology would not only let Wal-Mart know when an item needed to be replenished but if it was missing from a shelf or on the wrong shelf.
While many in retailing see a tremendous upside to the information available using RFID, privacy advocates see the specter of Big Brother in the tags.
"There are two things you really don't want to tag, clothing and identity documents, and ironically that's where we are seeing adoption," Katherine Albrecht, founder of Consumers Against Supermarket Privacy Invasion and Numbering, told the Journal. "The inventory guys may be in the dark about this, but there are a lot of corporate marketers who are interested in tracking people as they walk sales floors."
Discussion Questions: Will Wal-Mart's actions lead to the widespread adoption of item-level RFID at retail? Do privacy advocates have legitimate concerns and how should stores using RFID address them?