In 2022, Retail giant Walmart announced that it was expanding the utilisation of radio frequency identification (RFID) technology beyond retail apparel to encompass other critical retail departments. This included home, entertainment and hardline departments, targeting a wide range of products.
By imposing a mandate on its suppliers, Walmart required them to implement RFID tagging for home goods, sporting goods, electronics and toys by 2 September 2022.
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This strategic move underscored Walmart’s confidence in the effectiveness of RFID technology and its potential to revolutionise inventory management across diverse retail sectors.
Alongside this, GlobalData identifies Walmart as one of the top 25 global retailers that saw growth in 2022 amidst the challenges of labour shortages, high inflation rates and supply chain issues.
Indeed, GlobalData’s retail analysis finds that to reduce the pain points of offline customer journeys and replicate the conveniences of e-commerce, investment in RFID technology must be at the forefront of omnichannel stock strategy to evolve physical retail spaces.
Did Walmart’s push for RFID technology spur its adoption in retail beyond apparel?
According to IDTechEx research, more than 72% of UHF RFID tags were deployed in these two segments combined last year. This dominance in retail apparel and footwear tagging not only accounted for the largest market share in terms of tag volume but also held significant market value in the ultra-high frequency (UHF) sector.
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By GlobalDataIDTechEx expects this trend to persist for the next decade, given the proven return on investment in these sectors. Retailers have been adopting a standardised approach, rapidly implementing UFH RFID solutions.
While apparel and footwear continue to lead the UHF RFID market, other retail sectors are also experiencing notable growth. Players within Walmart’s supply chain have reported a strong double-digit increase in demand as a direct result of Walmart’s RFID mandate.
What are the challenges of implementing RFID technology?
- The cost associated with tagging each individual item, which can be prohibitive for some retailers.
- Sustainability issues arise as the increased use of RFID tags can contribute to electronic waste if proper recycling measures are not in place.
- Technical and implementation challenges exist, particularly when tagging items containing liquids or metals, as these materials can interfere with RFID signals and impact the readability of the tags.
- The immaturity of the ecosystem for large-scale RFID implementation in other retail sectors (beyond apparel and footwear) adds complexity to the adoption process.
IDTechEx says that these challenges highlight the need for ongoing innovation and collaboration within the RFID industry to address cost, sustainability and technical limitations and to foster the development of a robust and efficient ecosystem that can support widespread implementation in the retail sector.
