A shopping trip in Texas to one of Walmart’s many superstores yielded many items with price points under three dollars, including a couple for less than 75¢. Each of these products shared something in common — a serialized radio frequency identification (RFID) smart label.
The time was ripe to examine Walmart’s shelves in more detail. It had been two and a half years since news hit the street that they would be expanding their successful RFID program into many new product categories. Home goods, consumer electronics, hardware, lawn & garden, toys, sporting goods and art supplies were some of the new categories being added. Apparel, footwear, jewelry and sunglasses were already being tagged by Walmart’s suppliers. Among the day’s purchases:
Under 99¢: Crayons; Fishing Hooks; Lawn Sprinkler Riser
$1.00-$1.99: Garden Faucet Adapter
$2.00-$2.99: Notepad; Pliers; Wooden Toy
$3.00-$4.99: BBQ Grease Cup Foil Liners
$5 and Over: Motor Oil
In the past it’s been unusual to find RFID smart labels being used at scale on sub-99¢ consumer goods — a true milestone in the long history of retail. And since you may be wondering, none of these items were being sold at a discount. These were their regular prices.
But the real story isn’t the 99¢ threshold being crossed. Rather, it’s the sheer volume of products with prices below $3.00 now sitting on the shelves.
What This Does/Doesn’t Tell Us
The fact that RFID tagging is spreading so quickly to products at ultra-low price points is a testament to the cumulative value that can be generated by these multi-purpose smart labels when a retailer chooses to put them to work in more than merely one or two ways.
Just to be clear, though, the message today is not that every consumer good with a price of 72¢ or higher should now be receiving an RFID smart label. As always, it’s all about context.
A Win For Consumers
The larger the range of goods receiving RFID smart labels, the larger the win for consumers. Similarly, the larger the number of retailers using RFID, the larger the win for consumers.
Retailers who use RFID do a better job keeping their sales floors properly stocked. And when a desired item isn’t on the shelf, salespeople are better able to assist.
The combination of inventory accuracy, visibility and findability also creates the degree of precision needed to properly support the harmonization of online and in-person shopping.
RFID helps get items searched online into a customer’s hands more quickly. A larger percentage of a store’s on-hand inventory can be made available for BOPIS programs (Buy Online Pickup In Store) or for fulfillment of online orders shipped to a customer’s home.
No less important, RFID helps retailers shorten the window of time in which they can promise pickup of orders. Speaking at the RFID Journal Live! conference in 2022, Andrew Tashiro, former VP Retail Inventory Management at childrenswear brand Carter’s, proudly shared that the use of RFID allowed Carter’s to promise pickup of BOPIS orders within 60 minutes instead of 120 minutes.
Retailers Win Too
RFID addresses many classic retail pain points. But the conversation usually begins with inventory accuracy. Retailers who use RFID operate with a clear picture of each store’s true on-hand inventory. And they get this view for each and every unique product in their merchandise range.
As an added bonus, the RFID system distinguishes between a product’s stock room and sales floor quantities. Not only is this valuable to merchants, it helps store managers and frontline employees complete their daily tasks more efficiently.
“I can’t imagine executing Omnichannel successfully without RFID” said Kirsten L’Orange at the 2024 NRF Big Show. She leads Omnichannel Productivity globally for Levi Strauss & Co. It’s only natural that a retailer would want RFID smart labels on as many of its products as possible.
Accuracy and visibility together let retailers operate their stores with less surplus stock if they wish. Precision unlocks upstream supply chain benefits too, from factory to store.
The fact that RFID helps reduce theft more effectively is a win for retailers and consumers alike, and one that is easy to overlook. The cost of crime is ultimately borne by honest customers, in the form of higher prices. RFID has been hailed as a game changer by leading experts on retail theft. Businesses and law enforcement have begun using RFID to investigate, prosecute and prevent crime in new ways. Some of America’s District Attorneys are already big fans.
How To Spot RFID In The Wild
If a product has one of the logos in Figure 1 on its price ticket, on an alternate label or elsewhere on its packaging, then the product has received an RFID label. Similar logos are sometimes used, but these two are the most prevalent.
Figure 1
The Bottom Line
If you want to peer further into retail’s future, then monitor the proliferation of RFID smart labels on products with ultra-low prices.
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