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Wal-Mart Breathes New Life Into RFID

If you thought Wal-Mart was backing off from its big RFID plans, think again. Wal-Mart recently notified, in writing, suppliers of its Sam's Club warehouse stores that it will charge a $2 service fee for pallets of goods that aren't tagged with RFID starting Jan. 30. Suppliers of Wal-Mart stores shouldn't be surprised if they get a letter with some sort of financial incentive to comply with RFID, too.

It's much easier for Wal-Mart to get aggressive about RFID with Sam's Club suppliers, since there are far fewer of them compared with more than 20,000 suppliers for Wal-Mart stores. But Wal-Mart has invested millions in RFID in its namesake stores, and don't think for a minute it's going to keep things comfortable for noncompliant suppliers. Some I've talked to in the industry expect Wal-Mart will create an RFID incentive around sales promotions -- perhaps even choosing only to do promotions for suppliers using RFID. The technology has been helping Wal-Mart work more closely with a number of its suppliers, including Kimberly-Clark and Daisy Brand, to make sure promotions are executed on time.

So here's my advice to suppliers: As long as you plan to sell your products through Wal-Mart stores, and the retailer has requested your participation in the RFID party, it's probably time to suck it up and join. Have an open mind, because you might be surprised at the benefits of RFID if you're willing to put some effort into changing your business processes to support it. Delaying an implementation might result in a panicked last-minute rush to comply, and let's face it, Wal-Mart has the upper hand here. Because at some point, a letter may arrive in the mail for you.

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