WALMART & RFID technology

In class we learned how Walmart is implementing the use of Radio Frequency Identification (RFID) technology. The improvements in sensitivity, range and durability, have enabled widespread RFID use in the logistical planning and operation of supply chain processes in the manufacturing, distribution and retail industries, and helped move its adoption into services such as security and access control, tracking, and monitoring/management. A RFID tag is consisted of a microchip and an antenna packaged into many forms, such as a label, or imbedded in between the cardboard layers in a carton. Information about the product that the tag is stuck on can be recorded when the tag passes through a RFID reader before you walk out of the Walmart store. This is linked to a computer system that updates the location status of the associated product.

This means that Walmart can very quickly, gather information about the customer, the types of groceries or products he/she is buying and further, maybe even come up with some assumptions based on this information. Walmart not only acquires efficiencies and cost reductions (for example, in inventory management) but they are able to gain customer insights about what they are buying more of, how often, what other products complement well with it, what type of customers are buying what specific types of products, etc.

Along with RFID tags are not only great efficiencies but also like we learned in class, there can be privacy concerns. When we gather lots of information from consumers, what we do and who sees this information can get us in trouble. So, Walmart just needs to make sure they are monitoring this and has control over gathered information. Walmart's RFID mandate has enormous strategic implications, not just for their direct suppliers, but the suppliers own operations and vendors in turn. The ripple effect of the mandate will cause RFID costs to drop in general, opening the door for RFID applicability to smaller companies and industries that to this point haven't been able to cost justify using RFID.

It will also enable new applications such as RFID-enabled personal safety and security. These kinds of applications in turn become particularly attractive when combined with GPS technologies to enable comprehensive tracking whether in a building or on the road. Once costs drop enough, and if privacy concerns are able to be overcome, using RFID at the individual consumer product level will open the door to a new generation of retail efficiencies. These may lead to more discovered customer insights, and companies can invest and discover what customers really need when it comes to safety and security.