https://www.globenewswire.com/news-release/2017/05/16/125712...
Source: I worked at a company selling RFID-based inventory tracking hardware.
This is a genuine question by the way, I honestly have no idea of the scale of this when applied to a store chain as huge as Walmart.
I think the second is a big part of why RFID tags haven't taken hold, stores need enough of their stock to use them to be useful while manufacturers need enough clients to want the tags embedded to go through the trouble of including it in the packaging.
https://www.mouser.com/ProductDetail/NXP-Semiconductors/SL3S...
The reason is that your original premise is not true - they are not relatively cheap to roll out or maintain (relative to the cost of goods).
They are not cheap to roll out:
- Readers in all stores, including handheld devices, tills, doors e.t.c.
- If you are tagging 100% of products, it affects every single supplier production line, of which there are tens of thousands. A cost to your supplier is a cost to you, because it will inevitably affect the cost of goods sold.
- IT cost implications both internally and at your suppliers.
- If you don't get 100% of suppliers adhering, you don't get as much benefit. Good luck getting Coca-Cola to change their production lines for no benefit to themselves!
They are not cheap to maintain:
- At an estimated 2p per item, if you are shipping 10 billion items that is £200,000,000 a year just in tag costs. Alternatively put, if you sell items for £1 on average and make 4% net profit, that cost of tag cuts deep.
- There is an incremental cost for suppliers to maintain all that equipment to apply tags or build them into the packaging (which comes back in COGS).
- Maintenance of all RF readers
And inventory routines are cheap relative to this cost: - Assuming you have 1000 stores, and spend 5 hours per day on inventory routines @ £12 total cost to employ, you are talking a £20m cost (5 hours assumes gap scanning & code checking). I assume a manual financial account is still required once a year to account for failed tags.
So we have to come up with other benefits, like top-line growth driven by a better customer experience, but customers will have to be willing to pay for this with higher prices.
https://www.atlasrfidstore.com/rfid-insider/walmart-and-rfid...
I'd be interested to know the precise reasons for not using RFID on items though, I suspect it might be something like "tagging $1 items is cost-prohibitive, and the system isn't useful if you don't tag every item".
That wouldn't stop them from paying for the tagging. If it happens at all, everyone later in the supply chain has to pay for it.
If you want it integrated then your store must convince every manufacturerto modify their production line to put a tag inside the product packaging. Reading is still a problem also, RFID works great alone but what about reading a shelf full of products at once?
IMO computer vision (like Amazon Go) is a more likely solution to the problem.
Reading a shelf full of products isn't an issue, how do you think they can wave a wand over clothes and know the exact sizes they have and quantity?
They should double down on RFID but many of the manufacturers don't want to incorporate it in their process.
Also in a number of places walmart and other stores literally just open a box provided by their sources and place it on shelves.
Barcodes are not ideal on something that is flexible and gets cleaned a lot, but RFID was discarded as a solution then.
My point is that RFID tags have had over 30 years in the market. If they were a better general solution than barcodes, they would be everywhere.
Walmart sells bulk poverty goods with a margin of 1%. It's often the only store in town it's customers can afford to shop in.