Fifteen years after Walmart launched a costly pilot project, the sensors are coming back in style thanks to proven benefits for retailers and their suppliers.
Ask someone about the history of RFID and the first thing you’ll likely hear is about is Walmart.
In 2003, Walmart told its top 100 suppliers and vendors they had to tag all pallets and cases with RFID tags within two years. Bill Hardgrave, who consulted with the large retailer and its vendors alongside his colleagues when he was at the University of Arkansas, said use in retail jumpstarted with that announcement.
“At that time, we all believed that RFID was the technology meant for the supply chain, and for pallets and cases only,” Hardgrave, who would go on to start the RFID Research Center a few years later and is now the provost at Auburn University, told Supply Chain Dive.
But RFID was not yet ready for prime time
In the Walmart years, RFID technology was relatively new and didn’t work that well. Despite the hype around Walmart’s pilot project, the tags were not giving suppliers useful data, Hardgrave said, adding little to already-efficient distribution centers and warehouses.
“It was a solution in search of a problem,” Hardgrave said, and it gave RFID a bad name. In 2006, however, a focal change in RFID projects gave the technology new life.
The next iteration of technology vastly improved performance, and prices began to drop. Based on Walmart studies, retailers like Diller’s, Bloomingdales and Macy’s realized that the tracking problems they wanted to solve weren’t in the warehouses, but in the stores.