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Walmart Sets a New Industry Precedent Recommitting to RFID Technology Mandate

The global retail giant is requiring all their home products suppliers to utilize RFID technology for tagging and tracking items no later than September 2022.

Walmart has announced that effective September 2, 2022, they will be mandating the utilization of radio frequency identification (RFID) tags for many of their suppliers within various departments including: home products, hardware, automotive, entertainment, and toys.

The retail giant’s deployment of UHF RFID technology began in 2020 with the implementation of RFID tagging for tracking their goods through the inventory cycle. The organization opted for the usage of a passive UHF RFID labeling solution, meaning that the RFID labels are assigned to each item, creating a uniquely tracked identity which is easily captured via handheld or fixed RFID readers.

As each of these RFID tagged items are received, displayed, and purchased, Walmart has full visibility, capturing real-time data that serves as the key to maintaining sufficient stock levels, timely inventory replenishment, and efficient operations. Given the tremendous success that Walmart has experienced in earlier phases of RFID adoption, they’re now taking the technology expansion initiative a step further with this new supplier-oriented mandate.

“We have seen dramatic results in our ability to ensure product is available for our customers, leading to improved online order fulfillment and customer satisfaction.”
– Shelly McDougal, Walmart’s Sr. Director of Merchandising, told RFID Journal in January of 2022.1

While many of their suppliers already have RFID systems in place and are familiar with the technology, Walmart will be hosting training sessions to ensure companies comprehend and are in full compliance with the mandate’s technical criteria.

Looking to the future, discussion of additional mandates is already a possibility. McDougal adds, “We look forward to expanding the [RFID] technology into more categories to further improve inventory accuracy across the business, provide a better in-store shopping experience for customers and drive more online and pick-up-in-store capabilities.”

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The Mandate’s Anticipated Effects on the Retail Industry

As one of the world’s largest retailers, Walmart’s influence may prompt widespread adoption of RFID technology within the industry. Sandeep Unni, Senior Director Analyst within Gartner’s retail industry research practice states, “A mandate coming from them could just be the tipping point for other retailers to further adoption.”

Expert analysts are in agreement that the impact Walmart’s mandate will have on the retail industry will be significant and, given the current climate of the supply chain, is a timely solution for widespread industry challenges. According to research conducted at the Auburn University RFID Lab, RFID is proven to increase visibility and stock-keeping-unit (SKU) accuracy up to 99 percent for brick-and-mortar retailers.  Research also indicates that RFID provides up to an 80 percent improvement in shipping and picking accuracy as well as improving receiving time by 90 percent.

Why Now?

Now is a better time than ever to deploy RFID. For example, the cost of an RFID solution has drastically reduced as the technology becomes more widely adopted. A report from McKinsey & Co. reveals that the cost of UHF RFID tags has decreased by up to 80 percent over the past two decades, bringing the price down to about 3 to 5 cents per tag (if purchased in large volumes). In addition to cost-effectiveness, the technology itself has undergone continuous improvement in read sensitivity and accuracy over the years. Companies are still learning how to cope and adapt to the unprecedented supply chain issues brought on by the COVID-19 pandemic. Due to the fact that RFID has been shown to deliver better than 97 percent inventory accuracy, it is undoubtedly a well-timed decision for organizations looking for a reliable and justifiable return on investment.

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Regardless of whether or not retail suppliers are being directly impacted by this new Walmart mandate, this innovative initiative serves as an important signal that it is time for the supply chain to explore or reexamine RFID technology as the backbone for efficient and accurate retail operations.

Are you a Supplier Impacted by Walmart’s Tag Mandate?

If you’re affected by Walmart’s mandate or interested to learn how RFID can benefit your business operations, contact RMS Omega’s RFID solutions team. Our RFID Pros can help you select the appropriate tags or inlays, and offer supply chain availability to ensure your business meet Walmart’s deadline. RMS Omega has premier level partnerships with the industry’s leading RFID hardware, software, tag, and inlay manufacturers. Contact us today!

1Source: RFID Journal: Walmart Recommits to RFID