Why Wal-Mart needs RFID tags?

Wal-Mart will shortly be adding Radio Frequency IDentity tags to some of its garments. RFID tags can carry more data than bar codes and so are more useful for stock control. An item bearing an RFID tag does not have to be taken out from the trolley to be scanned because the tag reflects its information back to the reader on its own unique radio frequency. These tags can be put under labels or sewn into garments because they can be very, very small.

Wal-Mart plans to begin using removable tags. This is important, because these tags broadcast their data to any machine that asks for it and there are simply thousands of RFID readers in every city.

Wal-Mart is to start using RFID tags

Wal-Mart is to start using RFID tags

For instance, the tag in your Wal-Mart shirt might be saying: ‘I am a sleeveless shirt, colour yellow, size 12. I cost 9.95. I was bought at Wal-Mart Superstore number 00067 in New York, USA. I am number 400 of 20,000 bought on June 15, 2010 I was made by Satis in Thailand in June 2010’.

This and more information, encoded on the RFID tag is very useful for stock control. RFID tags are an advanced form of bar code. Bar codes are OK, but the scanner has to see them to read them, whereas RFID tags reflect back their data when they get the power to do so from an RFID reader.

These readers can be hand-held or stationary and can often read the tags from about a metre away without having to see it. Therefore, the reader could be under, over or along side the shopping trolley and as you pass past it will read all the contents of your trolley without you having to unload them.

This saves time, which can mean fewer human errors and even fewer employees. If the reader is connected to a central computer, stock levels are adjusted automatically, and the fastest moving items and the most and least profitable items in the store can be read off a list that is accurate up to the second.

Link the stores to head office and the CEO knows what is going on everywhere in his empire live. Link the computer to the central distribution warehouse and items can be ordered automatically when stock drops to a predetermined level.

However, there are some privacy concerns. Wal-Mart plans to use removable tags, but consumer societies say that criminals could scan rubbish bins to see what a person has purchased recently. More of a problem would be if the tags were sewn into hems or linings, because they are ‘always on’.

RFID is used in a lot of credit cards and security passes, so it is hypothetically possible that the readers will scan those as well. If the details hidden on passes, credit cards, driving licenses and passports is connected together, then the store will know a whole lot about you, as well as your shopping predilections as soon as you walk through the door.

It could be a very smart move for Wal-Mart to start using smart tags. An experiment at American Apparel Inc. in 2007 showed that shops using smart RFID tags made 14.3% more sales that stores that did not use them. It is also easier to discover employee theft of items from the stock room if RFID tags are used.

About this entry