StorefrontBacktalk: Macy’s Won’t Make Its RFID Move Until Everyone Else Does
Through a special arrangement, presented here for discussion is a summary of a current article from StorefrontBacktalk, a site tracking retail technology, e-commerce and mobile commerce.
Macy’s is quickly moving ahead with its RFID item-level tagging efforts but is also indicating that significant additional moves will only happen when key competing retailers make their item-level RFID moves. It seems that the $25 billion chain has figured out the difference between being an industry leader and leading an army of one.
An article in RFID 24-7 indicated that Macy’s trial’s goals are focusing on improving cycle counts and maintaining physical inventory accuracy. Bill Connell, Macy’s senior vice president of logistics and operations, was quoted, “We are in the process of evaluating the use of RFID specifically as it relates to replenishment for our apparel and footwear business. And we are deployed into six distribution centers for furniture and bedding. We’re quite pleased with the initial results.”
But Mr. Connell’s next thought, about industry cooperation, was more telling.
“We have stated that as part of the RFID Initiative, we have an eye toward industry adoption by mid-2012 and we fully expect to be an early mover along that timeline. Industry adoption means everybody agreeing to do it, and once that is agreed to, we intend to be an early mover,” Mr. Connell said.
There’s nothing quite as enjoyable in the middle of summer as a nice bit of retail arm- twisting. In this instance, though, it’s absolutely appropriate. Walmart — with its Sam’s Club division — tried going the RFID route alone and discovered that even the world’s largest retailer can only do so much on its own.
Unfortunately, everyone is testing RFID in very different ways. For standardization, which is what suppliers need and what Macy’s is insisting on, that’s bad news. Staples is trying to bring the per-tag cost way down with a re-usable tag approach, while J.C. Penney is focusing solely on high-end products (no last-mile supply-chain checking) and Walmart itself is now freaking out privacy experts by allowing customers to leave its stores carrying fully activated tags, hoping that the customer will later throw them out.
This means that Macy’s is pressuring for both RFID item-level adoption and consistency in its adoption among a wide range of retailers. This is very good for the industry, but it’s a very clever move by Macy’s. First, it takes the pressure off of the chain for rapid deployment — despite the one-year self-proclaimed target — and doesn’t force Macy’s to move any faster (or to invest precious IT funds any faster) than its rivals. It, therefore, is minimizing the ever-popular leader penalty.
Second, it gets Macy’s out of the awkward threats against suppliers. If the industry doesn’t move, there are no threats. And if the industry does move, the supplier anger is diluted because it’s directed at lots of retailers.
Every once in a while, Macy’s reminds us how standards should happen.
- Macy’s Won’t Make Its RFID Move Until Everyone Else Does – StorefrontBacktalk
- Macy’s extends RFID to six DCs for tagging furniture and bedding supplies – RFID 24-7
Discussion Questions: What do you think of Macy’s approach to its RFID trials and rollout as well as vendor compliance? Is this the path to drive standardization?