Retailers Drag Feet on RFID Initiatives

Wal-Mart CIO details progress, calls for wider adoption; other execs say it isn't a priority yet

By Carol Sliwa

January 24, 2005 12:00 PM ET

Computerworld - NEW YORK -- "Test it. Don't wait. Don't be last," Wal-Mart Stores Inc. CIO Linda Dillman urged industry colleagues last week after giving them a progress report on her company's use of RFID technology. But while Wal-Mart's embrace may be driving its suppliers to adopt RFID, fellow retailers have been slow to pick up the torch.

And Dillman's exhortation, as well as similar ones by other early adopters, left many attendees at the National Retail Federation's annual convention and expo unconvinced of the need to move more quickly. Fifteen retail executives interviewed at the conference said they have yet to pilot radio frequency identification technology, and they have no plans to make RFID a priority this year.

"It's not on the front burner right now," said Kip Tindell, CEO at The Container Store, a chain based in Copell, Texas. "It's too easy to learn exactly what to do and what not to do by watching Wal-Mart take the first step. That's normally not the way we do things, but with this, it's pretty convenient to take that approach."

Mike Jones, CIO at Richmond, Va.-based Circuit City Stores Inc., said he has "no problem following" and isn't concerned that rival Best Buy Co. has launched an RFID initiative. Jones said that the cost of RFID technology is still too high and that the read rates of the tags are too low for his company to take the plunge.

"I'm more interested in consumer-facing opportunities rather than in the supply chain, where the opportunity is not as visible to our customers," Jones said. He cited new point-of-sale, merchandising, marketing and CRM systems as higher priorities than RFID technology, although he said that Circuit City will likely test it later this year.


Wal-Mart Stores Inc. CIO Linda Dillman

"None of us have millions and millions of dollars to invest in technology that's going to pay off down the road," said Paul Charron, CEO at Liz Claiborne Inc. in New York. "I'm going to get lots of credit for being strategically relevant, but unless that strategic relevance translates into earnings per share in a reasonable period of time, nobody cares."

Charron predicted that Liz Claiborne will use RFID technology in three to five years, once the hardware and the applications are refined and the costs come down. He said it's a "beautiful concept" to be able to pinpoint the location of all of the items in a company's inventory "simply by looking in a computer." But, Charron added, "who wants to be a beta site for this?"

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