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Macy’s Won’t Make Its RFID Move Until Everyone Else Does

July 27th, 2011

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. Wal-Mart—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.

Last year, Wal-Mart again tried to push an industry effort on its own, with its drive for retail Chip-and-PIN, which has also—thus far—fallen flat. I guess even the proverbial 800-pound gorilla has its limits.

As it happens, Macy’s is far from alone among major retailers in testing RFID item-level efforts. For industry acceptance, that’s the good news. Unfortunately, everyone is testing it 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 JCPenney is focusing solely on high-end products (no last-mile supply-chain checking) and Wal-Mart 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.

And third, anything that is so crucial to the supply chain and in-store really needs to happen with lots of chains at once. Every once in a while, Macy’s reminds us how standards should happen.


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