Wal-Mart to add ID tags to clothes

Wal-Mart Stores Inc. has launched a project throughout its U.S. stores to add electronic identification tags to select apparel items to ensure that shelves remain stocked with merchandise customers are seeking.

Part of an effort the company calls “next generation Wal-Mart,” the apparel-tagging project will help the firm better manage inventory and maintain its low prices, spokesman Dan Fogleman said.

Through the use of radiofrequency identification tags, an employee with a hand-held reader can take inventory of what’s on the sales floor and in the back room in seconds, Fogleman said.

“It has a lot of time-savingelements to it,” he said.

Knowing what’s on the shelf is critical, Fogleman said, because if a customer is looking for size 34-32 jeans and they’re not on the shelf, “we’ve lost a sale.”

Wal-Mart has been among the leaders in retail promoting the technology and funding research, including projects at the RFID Research Center at the University of Arkansasat Fayetteville.

Bill Hardgrave, director of the center, said Wal-Mart’s move is significant.

“This will be the largest item-level deployment that we've seen to date,” he said. “I view this as a very positive step for the industry.”

Mark Roberti, editor of the trade publication RFID Journal, said the research leaves no doubt that use ofthe tags improves on-shelf accuracy for retailers. What hasn’t been fully analyzed, he said, is the benefit to suppliers who are paying for the cost of buying and attaching the tags.

“The key is, they [Wal-Mart] want to proceed cautiously and deliberately to ensure that the suppliers are on board and this is notsomething that is forced upon them quickly and they have to make dramatic changes,” he said.

However, Roberti does not view Wal-Mart’s move as “transformational,” but rather “one step on the journey.”

Within three to five years, he said, he expects nearly all apparel in large stores to have the tags because “the benefits are enormous.”

Privacy advocates have raised the possibility that retailers could use the electronic tags to track customers’ movements inside their stores and beyond.

Fogleman said the company requires the transponders to be part of price tags or packaging so they are removed by customers after purchase.

“We have no way or desire to follow the merchandise once it leaves the store,” he said.

Wal-Mart’s stock closed Friday at $51.67, up 81 cents or 1.59 percent, on the New York Stock Exchange.