Study Sees RFID Savings For Wal-Mart

Shoppers more likely to find what they wanted on the shelves, thanks to the new technology.
RFID could make for happier Wal-Mart shoppers, a study showed.

University researchers found a 16 percent reduction in so-called ''out of stocks'' at Wal-Mart Stores that were using RFID to track products from the time they left the factory to when they were sold off the shelf.

The independent study, released on Friday by the RFID Research Center at the University of Arkansas, sought not only to find out whether use of the product tracking technology improved operations, but also to quantify any savings. The study was commissioned by Wal-Mart.

They found a 16 percent reduction in out-of-stocks, as well as a reduction in excess inventory. Moreover, items bearing electronic product codes (EPCs) that could be read by RFID readers were replenished three times faster than comparable items marked with bar codes. Overall, RFID-enabled stores were 63 percent more effective in replenishing out-of-stocks than the control stores.

''This is no longer a take-it-on-faith initiative,'' Linda Dillman, executive vice president and CIO for Wal-Mart, said in a statement. ''This study provides conclusive evidence that EPCs increase how often we put products in the hands of customers who want to buy them.''

Gartner analyst Jeff Woods said studies analyzing the business case for RFID are one of the most important efforts in the industry. ''It's admirable and beyond the call of duty for Wal-Mart to step up to the plate with this much information,'' he said.

Wal-Mart jump-started the RFID industry with a mandate that its top 100 suppliers begin using RFID tags on shipments to the stores. It later extended the mandate to its top 200 suppliers.

University researchers spent 29 weeks analyzing out-of-stock merchandise at 12 pilot stores equipped with RFID technology and 12 control stores without the technology.

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