Wal-Mart expands RFID program

Wal-Mart has announced its intention to make more than a quarter of its stores RFID-capable within the next 18 months. 1,000 of its 3,600-plus locations are expected to be able to handle the technology by January 2007. The retailer said it was expecting a further 200 of its top US suppliers to be using RFID tags by January, in addition to the 100 suppliers already working with the tags. It will ask a further 300 suppliers to follow by January 2007. Wal-Mart has also released highlights of a study carried out at its stores by the University of Arkansas, indicating that using RFID tags is likely to increase suppliers’ sales.

The study was conducted at 24 Wal-Mart stores, and is the first to compare the performance of RFID-enabled stores with those relying on bar codes to manage inventory.

The study concluded that RFID-enabled stores were 63 per cent more effective in replenishing out-of-stock items than traditional stores, as sales at the cash register translated into automatic instructions to move goods out of stockrooms, as well as re-orders.

It found that RFID-tagged items were three times less likely to be out of stock than non-tagged items at the same store. Manual orders from the stores to Wal-Mart’s distribution centers were also reduced by ten per cent. The study was conducted over 29 weeks at 12 stores enabled with RFID, and 12 traditional stores.