IDTechEx Discusses the Effect Walmart’s RFID Mandate Will Have On RFID Adoption in Retail
The big news in the RFID industry at the start of 2022 was Walmart's announcement—the leading retailer revealed plans to expand RFID use from retail apparel to other retail departments.
The retailer requested that its suppliers for the departments listed above place Gen 2 UHF RFID tags, which has a frequency of 902 to 928 MHz, on all items delivered to Walmart.
- Home departments – kitchen & dining, home décor, bath & shower, bedding, furniture & luggage, closet & organization
- Entertainment departments – toys, electronics, wireless
- Hardlines departments – sporting goods, automotive tires and batteries
According to Walmart, UHF RFID tags were adopted in its retail apparel sector in 2020, and inventory management has improved dramatically since then, resulting in a better in-store shopping experience for customers, additional online and in-store pickup opportunities, and improved sales potential. This is considered the primary motivator for Walmart to expand RFID deployment to other categories.
The use of UHF RFID proliferated initially in retail in the apparel and footwear segments. Last year, more than 70 percent of UHF RFID tags are utilized in that two segments combined, according to IDTechEx, a market research firm that has been monitoring RFID for more than 20 years. "UHF RFID business in retail apparel and footwear tagging is still by far the largest UHF RFID market by tag volume as well as market value, and it will remain so for the next ten years since the payback is well-proven. We see retailers are rolling out in a cookie-cutter approach," stated IDTechEx CEO, Raghu Das. "As UHF RFID has shown to be very effective in the retail apparel and footwear tagging market, many leading players we spoke to are now looking at transferring this success to other business sectors."
Now, Walmart's announcement may potentially accelerate the UHF RFID adoption process in other retail segments, inevitably driving other retailers to follow suit.
Despite RFID's bright future in retail, one issue that must be addressed is that the UHF reader network is nowhere near ubiquitous because it is mostly employed by businesses rather than consumers. UHF readers are becoming lower cost and ultimately may be integrated into consumer smartphones, as NFC often is. UHF reader smartphones are available now but mainly at price points where they are used in the industry, and they are not targeted at consumers.
IDTechEx believes that as reader infrastructure becomes more widely available, RFID adoption will further accelerate in both retail for apparel and footwear and for other retail segments This includes moving beyond inventory management offering benefits such as customer engagement and advertising, which can be realized to justify the additional cost of RFID added to products.
IDTechEx has studied the RFID market for more than 20 years. The latest version of the RFID market research report, "RFID Forecasts, Players and Opportunities 2022-2032," provides a comprehensive overview covering passive RFID (for UHF, HF, and LF frequencies), battery-assisted passive, active RFID and chipless RFID technologies, players and markets. This report presents an unbiased analysis of primary data gathered through our interviews with key players throughout the value as well as secondary data from all available sources, and it builds on our expertise in the RFID industry. This report gives extensive forecasts and depth that no other source can match.