Posts Tagged ‘Wal-Mart’

Item Level RFID Initiative receives $400K-plus sponsorship from Impinj, Motorola, three others

Thursday, June 30th, 2011

The Item Level RFID Initiative received a major shot in the arm this week when Impinj, Motorola, Tyco, Avery-Dennison and Checkpoint Systems all signed on as Platinum sponsors of the initiative. The exact amount kicked in by each firm wasn’t available today, but it is believed the checks from the five RFID vendors total well into the high six figures.

(Click here for RFID 24-7′s prior coverage of the Item Level RFID Initiative)

The Item Level RFID Initiative, a consortium of retailers (Wal-Mart, Macy’s Kohl’s, Dillards and more) and industry vendors, was unveiled in November to jump-start the use of item level tagging in retail. The group, which operates under the wing of standards group VICS, operated on a budget of about $40,000 last year. Behind its new Platinum sponsors, that budget will be expanded 10-fold this year and next, allowing the group to accelerate development of guidelines and standards, as well as promote the group to a broader set of retailers and vendors.

ILRI will also be seeking Gold and Silver sponsorships. The move makes sense for suppliers like Impinj and Motorola, who have the most to gain by a faster adoption curve.

In other ILRI news, the Retail Council of Canada has become a member of the group, representing the first foreign interest to be granted membership. Retailers like Gerry Weber in Germany have already reached out to join the group. ILRI will also launch its own web site in July. Stay tuned to RFID 24-7 for more details.

Wal-Mart’s multi-billion RFID tag order drives optimism in the market

Thursday, September 16th, 2010

The market for RFID products and services will surpass $6 billion next year, according to a report released today by ABI Research. ABI’s “RFID Annual Market Overview” includes traditional applications such as access control, automobile immobilization, electronic toll collection and e-ID/ID documents as well as “modernizing” applications such as animal ID, asset management, baggage handling, cargo tracking/security, contactless payment and ticketing, RTLS, and supply chain management.

The latest research indicates CAGRs of between 21.7 percent and 28.8 percent for the five primary applications from 2010-2014. Practice director Michael Liard sums up the “big picture” as generally optimistic despite last year’s economic woes, and growing more so.

Emblematic of the industry’s generally cheerful outlook is Wal-Mart’s recent multi-billion unit  passive UHF RFID apparel tag and 15,000+ handheld reader RFP order and its expected U.S. rollout, which some observers believe has sparked renewed interest in RFID for item-level tracking.

“In response to the weakened economy, most RFID and RTLS value chain participants reported reductions to marketing expenditure, staff, and on-hand inventory levels beginning in late 2008 and continuing throughout 2009,” says Liard.

As the end of 2009 approached, however, ABI Research’s conversations with vendors and solutions providers grew more positive – the market was growing, orders were being placed and user interest was picking up across industries. “Overall 2009 continued the forward momentum for both RFID solution providers and the user community,” says Liard. “That trend continues in 2010.”

TheStreet: Wal-Mart item-level tagging doesn’t represent an invasion of privacy – or does it?

Tuesday, August 3rd, 2010

I’m a firm believer that privacy concerns about RFID are fading as the benefits of the technology become more apparent to consumers. While there is still a ways to go on that subject, a recent poll by TheStreet suggests that consumers are not concerned about privacy invasions from RFID – although only by a small majority. In the poll, 53.3 percent of respondents said they do not consider RFID tags a breach of privacy, while 46.7 percent believe their rights could potentially be violated.

The publication doesn’t reveal any information on margins of error, but you’ve got to believe that the poll isn’t far off from a 50-50 split on the topic, which suggests further education is needed when it comes to privacy. Regarding the Street poll, first I’d like to know why the poll results were buried in the last paragraph. Secondly, I’d like to know how many people TheStreet surveyed, and how familiar they are with the technology.

Click here to read previous coverage of privacy issues in RFID 24-7.

Click here to read the full story from TheStreet

Wal-Mart’s item-level apparel tagging campaign will drive global adoption

Wednesday, July 28th, 2010

For anyone that missed RFID 24-7 on Tuesday, we’ve posted our Wal-Mart story here…

It’s not often that RFID ends up on the front page of the Wall Street Journal. But it’s not often that the world’s largest retailer goes public with its technology plans either. Wal-Mart used to be quoted widely about its plans for RFID in the supply chain. Then a light bulb went off; the retailer realized that RFID is far more valuable at the store level, and on specific items.

And while Friday’s article in the Journal wasn’t exactly breaking news, it did cement the fact that Wal-Mart is pursuing item-level tagging for certain lines of men’s jeans and underwear. Industry experts predict that Wal-Mart will consume 30 million tags over the next 12 months just on those lines. If the launch is expanded, and it likely will when Wal-Mart sees the proper business value, the retailer’s use of RFID could explode and catapult item-level tagging to global acceptance. Down the road, it’s entirely possible that Wal-Mart could use hundreds of millions of tags while not even approaching a full apparel rollout.

“This is the beginning of the whole retail item-level tracking thing in the big world,” says Drew Nathanson, senior RFID analyst and director of research operations at VDC Research Group, Inc., who says that retailers will use more than 800 million RFID tags in 2011.

“We’ve seen some of these other applications with retailers but this shows it’s not only sparse deployments. You have the number one retailer in the world saying that this is the way we’re going to get more profit and more efficiency.”

Item-level tagging for apparel has been a sweet spot for the retail industry for years, although projects have been limited in scope, with many small pilots. There have been some exceptions, such as American Apparel’s well-documented item-level program, some very successful footwear programs in Europe, and, more recently, the Gerry Weber chain. The company will be the first German retail company to roll out RFID technology combining inventory management and loss prevention. Gerry Weber will rely on an Avery Dennison supplied RFID solution in more than 25 million garments a year through an RFID chip imbedded in a care label. This solution will optimize Gerry Weber logistics and retail processes, reduce theft and ensure stores are well stocked with popular items.

American Apparel operates about 300 stores. That’s a significant rollout, but considering that Wal-Mart operates well over 300 retail outlets in Texas alone, it’s understandable how this deployment could scale significantly.

“If Wal-Mart moves forward with this by rolling it out to all stores it would dwarf all other initiatives to date,” says Bill Hardgrave, founder and director of the RFID Research Center at the University of Arkansas. “It’s just another indication that we are moving down the item-level path very quickly. The fact that retailers are embracing RFID is nothing new. The fact that Wal-Mart it out there talking about its current plans is what caught everyone’s attention. It’s been a while since they’ve talked about this.”

The ramifications of Wal-Mart pushing item level tagging go well beyond the apparel sector and retailing. For starters, Wal-Mart has great clout with its suppliers, and this initiative will cause tagging to be pushed down the value chain quickly, resulting in more tagging at the source of manufacture. Additionally, the move will force competitors like Target to enter the game quickly. Target has remained very quite about RFID, but it’s believed the company has learned from others and could be ready to dive into the technology soon.

“Any time that [Wal-Mart] does something, everyone wants to understand what it is, why, and what kinds of benefits are being gained,” says Rose Depoe, global director of RFID strategic solutions and alliances for Avery Dennison Retail Information Services. “In general, in retail the quickest categories to adopt are those that are most complex in terms of SKU management. So in apparel, when we talk about the Wal-Mart announcement being for jeans and underwear, nearly all of them start with areas that are the most complex to manage. This is true for the 20 or 30 projects we’re involved in now.”

Such a big push by the retail sector could drive prices down further, opening up other opportunities in other industries. The pharmaceutical sector, which has seen stop-and-go item-level tagging, could  expand tagging initiatives if pricing drops further.

Last month RFID 24-7 published VDC Research’s predictions for the retail segment that includes a prediction for more than 10.5 billion tags sold by 2014, of which 3.4 billion will be used in retail, including item-level tags, as well as tags used for smart courtesy cards and access control.

“This all kind of goes along with that retail forecast that we’ve discussed where you see a huge number going up because they will be doing it continuously not only by store, but by additional product lines,” says Nathanson. “If [Wal-Mart] get the benefit they are expecting from it, you’ll see this [expand] fairly quickly.”

Retailers drive item-level tagging; tag sales could top 10.5B units by 2014

Monday, July 12th, 2010

For anyone that missed last week’s issue, here is our lead story on item-level tagging.

07/05/10 | John R. Johnson | email

As the benefits of RFID technology continue to expand, users of RFID have become more excited about the technology than RFID vendors themselves. That speaks volumes for the technology as it gains traction not only for single projects, but also for enterprise-wide applications.

Nowhere is the growth or potential bigger than at the retail sector, where the use of RFID is exploding, especially at the item level. The apparel sector has been the big mover, adopting item-level tagging throughout the entire supply chain to improve visibility, increase revenues and provide a more dynamic customer experience.

“There are a lot of neat things going on in cold chain and agriculture, but apparel item-level tagging is driving the industry,” says Bill Hardgrave, founder and director of the RFID Research Center at the University of Arkansas. “There is just tremendous movement there and we’ll see substantial quantities by year end.”

Drew Nathanson, senior RFID analyst and director of research operations at VDC Research Group, Inc., says more than 400 million tags will be consumed by retail in 2010, a number that jumps to 800 million in 2011.

Nathanson says the total market for RFID transponders in 2010 will total 3.5 billion, an increase of more than 33 percent over 2009. He projects that number will exceed 10.5 billion units by 2014, or which 3.4 billion will be used in retail, including item-level tags, as well as tags used for smart courtesy cards and access control.

According to VDC, passive HF and EPC UHF solutions in the retail, CPG, government and transportation sectors will account for more than 80 percent of tag usage by 2014. Supply chain management, inventory control and asset tracking will be the primary applications for EPC UHF tags.

“Projects are scaling, conversion times from pilot/evaluation to deployment are decreasing and adoption among new accounts is increasing,” says Nathanson. “Budgets are way up, significant purchase orders for delivery throughout 2011 are being placed, and RFID is becoming more deeply integrated. Simply stated, the end user is more committed to RFID than ever before.

“The demand for RFID transponders, transponder ICs and inlays is so high that it might exceed near-term capacity and create significant backlogs. For the first time since we’ve been covering the RFID industry, the end user is more optimistic than the supplier.”

Retail applications in the apparel sector are gaining the most exposure, led by the highly-publicized rollout of RFID throughout the entire supply chain at Swiss-based apparel retailer Charles Vögele. The retailer, which operates 851 stores and has revenues of $1.3 billion, has implemented a source-to-store solution across its entire supply chain, from point of manufacture to point of sale, using standard EPC Gen 2 labels. It is the first standards-based solution to RFID-enable a retailer’s entire supply chain.

The solution, provided by Checkpoint Systems, enables retailers to streamline their supply chains by applying smart tags to apparel merchandise at the point of manufacture, and reading the tags throughout the logistics operations and into the store. Once at the store, retailers can improve operations and increase shelf availability by tracking item-level merchandise throughout the facility into the back room, on the selling floor, in fitting rooms, and at point of sale. This visibility enables retailers to optimize their inventory replenishment, reducing out-of-stocks and on-hand inventory, while improving sales.

That’s crucial for Charles Vögele, which sources more than 70 million garments annually from more than 400 suppliers, numbers that represent a logistical challenge for the retailer.

“Our adoption of RFID has transformed and improved our operations from source to store. We have begun streamlining our operations and supporting our sales in ways that simply were not possible before; in many ways this marks the beginning of a retail revolution,” Thomas Beckmann, VP of supply chain, Charles Vögele Group, said in a release.

Hardgrave says retailers like Wal-Mart, Charles Vögele, and JC Penney are just the tip of the iceberg. “We’ll see big numbers by the end of year,” he says. “It seems like almost every week that we’re talking to another retailer moving down that path, and those numbers are starting to add up. We’ve moved past those phase one pilots and really now into the next phase, which is rolling out chain-wide or a store at a time and the numbers are increasing. On the passive UHF side, we’ll see numbers by the end of the year that we’ve never seen before.”

Other developments are occurring quickly in the apparel sector. RFID suppliers, for example, report that retailers are inquiring about single tags that would take the place of a price tag, the EAS security tag, and the garment size/information label attached to the product. The major stumbling block to moving to a single tag is the fact that consumers are so accustomed to seeing a price tag hanging from each individual garment.

However, that obstacle could be less of a problem as consumers grow more used to wireless apps on their cell phones. In the future, pricing information from a single all-encompassing tag could be relayed to a cell phone, instead of being displayed on a label. The customer could also do comparison shopping on the spot.

In addition, vendors continue down the path to integrating the security feature of EAS and the larger benefits of RFID into a single tag. Nathanson predicts that a universal tag that will include additional functionality and elements that are core to the retail floor is still three to five years away.