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90% of these problems are fixable with RFID tags, which are relatively cheap to roll out and maintain. Lululemon has been doing it for years[1], any insights ab

90% of these problems are fixable with RFID tags, which are relatively cheap to roll out and maintain. Lululemon has been doing it for years[1], any insights about why it's not more popular? https://www.globenewswire.com/news-release/2017/05/16/1257127/0/en/lululemon-honored-with-Best-Retail-RFID-Implementation-industry-award.html https://www.globenewswire.com/news-release/2017/05/16/125712...

fma 6y ago
This is a great question...When I was in college in the 2000s RFID was going to be a game changer. The ability to track everything...the ability to just push your cart out and pay without scanning your items. Technology is there, but my only guess is somehow it's cheaper to have stolen items and less accurate counts.
- theptip 6y ago
  I believe Walmart uses RFID extensively in their logistics/distribution pipeline, and they have a lot of control over their suppliers, so I'd assume they would use it in the store if it was viable. https://www.atlasrfidstore.com/rfid-insider/walmart-and-rfid-the-relationship-that-put-rfid-on-the-map https://www.atlasrfidstore.com/rfid-insider/walmart-and-rfid... I'd be interested to know the precise reasons for not using RFID on items though, I suspect it might be something like "tagging $1 items is cost-prohibitive, and the system isn't useful if you don't tag every item".
  - parliament32 6y ago
    I'd be more inclined to suspect that the sheer square footage of their stores makes it cost-prohibitive to outfit the space with the sensor infrastructure (comparing to Lululemon, who has much smaller stores). The tags themselves are fractions of a penny (I'm seeing $0.002 on alibaba) and are just applied as stickers, so I don't think that's too much of an issue -- not to mention Walmart probably has the buying power to insist their suppliers pre-tag all items.
    - thaumasiotes 6y ago
      > not to mention Walmart probably has the buying power to insist their suppliers pre-tag all items. That wouldn't stop them from paying for the tagging. If it happens at all, everyone later in the supply chain has to pay for it.
- aeternum 6y ago
  Thieves could just pull off the tag or swap tags with a cheaper item. If you want it integrated then your store must convince every manufacturerto modify their production line to put a tag inside the product packaging. Reading is still a problem also, RFID works great alone but what about reading a shelf full of products at once? IMO computer vision (like Amazon Go) is a more likely solution to the problem.
  - rootsudo 6y ago
    They already can with barcodes. It's harder to forge an RFID then a UPC 128 barcode (print as sticker, apply at store) Reading a shelf full of products isn't an issue, how do you think they can wave a wand over clothes and know the exact sizes they have and quantity? They should double down on RFID but many of the manufacturers don't want to incorporate it in their process.
    - rtkwe 6y ago
      The processing time of applying in the store would be enormous there's a reason very few stores still use the price sticker gun to label items, it's time consuming when there's already a tag on each item. Also in a number of places walmart and other stores literally just open a box provided by their sources and place it on shelves.
breakingcups 6y ago
Does anyone have a (well-founded) idea of the amount of extra waste this would create? Or how much this would increase manufacturing costs? This is a genuine question by the way, I honestly have no idea of the scale of this when applied to a store chain as huge as Walmart.
- deleted 6y ago
  [deleted]
- rtkwe 6y ago
  Bulk raw wafers can be obtained for a couple cents in 120k quantities but the tooling to apply them is where the cost is mostly. Also Walmart is a huge customer but not the sole customer for the brands they stock so they'd have to convince a lot of different companies to include it to make it worth while. I think the second is a big part of why RFID tags haven't taken hold, stores need enough of their stock to use them to be useful while manufacturers need enough clients to want the tags embedded to go through the trouble of including it in the packaging. https://www.mouser.com/ProductDetail/NXP-Semiconductors/SL3S1203FUD-BG003?qs=fhAOlxDPaYXTtmatA5gc%2FQ%3D%3D https://www.mouser.com/ProductDetail/NXP-Semiconductors/SL3S...
bckygldstn 6y ago
The tags are still much too expensive for grocery and low-end retail. The ~US$0.10 to buy and apply the tag really eats into profit for those segments, where average price is a few dollars and margins are a few percent.
- kregasaurusrex 6y ago
  10 cents is likely closer to being the raw cost of the tag itself; the actual costs including tooling and tracking would likely make this closer to 15-20 cents per unit at scale. It's still too high for a low-margin retail environment, where you're competing with services like Amazon Go's camera systems (including the removal of overhead associated with cashiers) which have a fixed upfront cost regardless of unit volume.
vkou 6y ago
Lululemon sells a small number of luxury items at a margin of 90%. (They don't capture that entire margin for themselves, but the presence of this margin also affects their relationship with their suppliers.) Walmart sells bulk poverty goods with a margin of 1%. It's often the only store in town it's customers can afford to shop in.
tuatoru 6y ago
Back in the late 1980s I worked (indirectly) for a clothing rental place and looked at RFID tags to replace the barcodes that were iused to track individual garments. Barcodes are not ideal on something that is flexible and gets cleaned a lot, but RFID was discarded as a solution then. My point is that RFID tags have had over 30 years in the market. If they were a better general solution than barcodes, they would be everywhere.
xyzzy_plugh 6y ago
RFID tags are problematic in a lot of environments. Warehousing in particular, especially with containers of fluid or other dense goods that can block radio signals. I can see a lot of problems at a place like Walmart. A shelf full of cleaning products sounds like a nightmare scenario. Source: I worked at a company selling RFID-based inventory tracking hardware.
ProAm 6y ago
RFID is definitely not cheap, especially at scale compared to barcoding.
Balgair 6y ago
One unmentioned issue is that RFID is also not universal. In that, each country has it's own part of the EM spectrum regulated for RFID. And most of these bands don't overlap. So you need one tag for the US, one for the EU, one for Japan, etc.
notatoad 6y ago
Do you have any firsthand knowledge of how well lululemon's implementation actually works? that seems like the sort of press release where corporate and the implementation partner are very proud of their thing, but the frontline staff who have to actually manage the inventory roll their eyes and fix the computer manually every time it's wrong.
jessriedel 6y ago
A few other HN comments on what is holding back RFID tags: https://news.ycombinator.com/item?id=22529512 https://news.ycombinator.com/item?id=22529512
xellisx 6y ago
Yay, more e-waste!
Closi 6y ago
I have some experience of RFID from working for a UK supermarket in their supply strategy team, who did a very limited partial rollout. The reason is that your original premise is not true - they are not relatively cheap to roll out or maintain (relative to the cost of goods). They are not cheap to roll out: - Readers in all stores, including handheld devices, tills, doors e.t.c. - If you are tagging 100% of products, it affects every single supplier production line, of which there are tens of thousands. A cost to your supplier is a cost to you, because it will inevitably affect the cost of goods sold. - IT cost implications both internally and at your suppliers. - If you don't get 100% of suppliers adhering, you don't get as much benefit. Good luck getting Coca-Cola to change their production lines for no benefit to themselves! They are not cheap to maintain: - At an estimated 2p per item, if you are shipping 10 billion items that is £200,000,000 a year just in tag costs. Alternatively put, if you sell items for £1 on average and make 4% net profit, that cost of tag cuts deep. - There is an incremental cost for suppliers to maintain all that equipment to apply tags or build them into the packaging (which comes back in COGS). - Maintenance of all RF readers And inventory routines are cheap relative to this cost: - Assuming you have 1000 stores, and spend 5 hours per day on inventory routines @ £12 total cost to employ, you are talking a £20m cost (5 hours assumes gap scanning & code checking). I assume a manual financial account is still required once a year to account for failed tags. So we have to come up with other benefits, like top-line growth driven by a better customer experience, but customers will have to be willing to pay for this with higher prices.

fma 6y ago

This is a great question...When I was in college in the 2000s RFID was going to be a game changer. The ability to track everything...the ability to just push your cart out and pay without scanning your items. Technology is there, but my only guess is somehow it's cheaper to have stolen items and less accurate counts.

theptip 6y ago
I believe Walmart uses RFID extensively in their logistics/distribution pipeline, and they have a lot of control over their suppliers, so I'd assume they would use it in the store if it was viable. https://www.atlasrfidstore.com/rfid-insider/walmart-and-rfid-the-relationship-that-put-rfid-on-the-map https://www.atlasrfidstore.com/rfid-insider/walmart-and-rfid... I'd be interested to know the precise reasons for not using RFID on items though, I suspect it might be something like "tagging $1 items is cost-prohibitive, and the system isn't useful if you don't tag every item".
- parliament32 6y ago
  I'd be more inclined to suspect that the sheer square footage of their stores makes it cost-prohibitive to outfit the space with the sensor infrastructure (comparing to Lululemon, who has much smaller stores). The tags themselves are fractions of a penny (I'm seeing $0.002 on alibaba) and are just applied as stickers, so I don't think that's too much of an issue -- not to mention Walmart probably has the buying power to insist their suppliers pre-tag all items.
  - thaumasiotes 6y ago
    > not to mention Walmart probably has the buying power to insist their suppliers pre-tag all items. That wouldn't stop them from paying for the tagging. If it happens at all, everyone later in the supply chain has to pay for it.
aeternum 6y ago
Thieves could just pull off the tag or swap tags with a cheaper item. If you want it integrated then your store must convince every manufacturerto modify their production line to put a tag inside the product packaging. Reading is still a problem also, RFID works great alone but what about reading a shelf full of products at once? IMO computer vision (like Amazon Go) is a more likely solution to the problem.
- rootsudo 6y ago
  They already can with barcodes. It's harder to forge an RFID then a UPC 128 barcode (print as sticker, apply at store) Reading a shelf full of products isn't an issue, how do you think they can wave a wand over clothes and know the exact sizes they have and quantity? They should double down on RFID but many of the manufacturers don't want to incorporate it in their process.
  - rtkwe 6y ago
    The processing time of applying in the store would be enormous there's a reason very few stores still use the price sticker gun to label items, it's time consuming when there's already a tag on each item. Also in a number of places walmart and other stores literally just open a box provided by their sources and place it on shelves.

breakingcups 6y ago

Does anyone have a (well-founded) idea of the amount of extra waste this would create? Or how much this would increase manufacturing costs? This is a genuine question by the way, I honestly have no idea of the scale of this when applied to a store chain as huge as Walmart.

deleted 6y ago
[deleted]
rtkwe 6y ago
Bulk raw wafers can be obtained for a couple cents in 120k quantities but the tooling to apply them is where the cost is mostly. Also Walmart is a huge customer but not the sole customer for the brands they stock so they'd have to convince a lot of different companies to include it to make it worth while. I think the second is a big part of why RFID tags haven't taken hold, stores need enough of their stock to use them to be useful while manufacturers need enough clients to want the tags embedded to go through the trouble of including it in the packaging. https://www.mouser.com/ProductDetail/NXP-Semiconductors/SL3S1203FUD-BG003?qs=fhAOlxDPaYXTtmatA5gc%2FQ%3D%3D https://www.mouser.com/ProductDetail/NXP-Semiconductors/SL3S...

bckygldstn 6y ago

The tags are still much too expensive for grocery and low-end retail. The ~US$0.10 to buy and apply the tag really eats into profit for those segments, where average price is a few dollars and margins are a few percent.

kregasaurusrex 6y ago
10 cents is likely closer to being the raw cost of the tag itself; the actual costs including tooling and tracking would likely make this closer to 15-20 cents per unit at scale. It's still too high for a low-margin retail environment, where you're competing with services like Amazon Go's camera systems (including the removal of overhead associated with cashiers) which have a fixed upfront cost regardless of unit volume.

vkou 6y ago

Lululemon sells a small number of luxury items at a margin of 90%. (They don't capture that entire margin for themselves, but the presence of this margin also affects their relationship with their suppliers.) Walmart sells bulk poverty goods with a margin of 1%. It's often the only store in town it's customers can afford to shop in.

tuatoru 6y ago

Back in the late 1980s I worked (indirectly) for a clothing rental place and looked at RFID tags to replace the barcodes that were iused to track individual garments. Barcodes are not ideal on something that is flexible and gets cleaned a lot, but RFID was discarded as a solution then. My point is that RFID tags have had over 30 years in the market. If they were a better general solution than barcodes, they would be everywhere.

xyzzy_plugh 6y ago

RFID tags are problematic in a lot of environments. Warehousing in particular, especially with containers of fluid or other dense goods that can block radio signals. I can see a lot of problems at a place like Walmart. A shelf full of cleaning products sounds like a nightmare scenario. Source: I worked at a company selling RFID-based inventory tracking hardware.

ProAm 6y ago

RFID is definitely not cheap, especially at scale compared to barcoding.

Balgair 6y ago

One unmentioned issue is that RFID is also not universal. In that, each country has it's own part of the EM spectrum regulated for RFID. And most of these bands don't overlap. So you need one tag for the US, one for the EU, one for Japan, etc.

notatoad 6y ago

Do you have any firsthand knowledge of how well lululemon's implementation actually works? that seems like the sort of press release where corporate and the implementation partner are very proud of their thing, but the frontline staff who have to actually manage the inventory roll their eyes and fix the computer manually every time it's wrong.

jessriedel 6y ago

A few other HN comments on what is holding back RFID tags: https://news.ycombinator.com/item?id=22529512 https://news.ycombinator.com/item?id=22529512

xellisx 6y ago

Yay, more e-waste!

Closi 6y ago

I have some experience of RFID from working for a UK supermarket in their supply strategy team, who did a very limited partial rollout. The reason is that your original premise is not true - they are not relatively cheap to roll out or maintain (relative to the cost of goods). They are not cheap to roll out: - Readers in all stores, including handheld devices, tills, doors e.t.c. - If you are tagging 100% of products, it affects every single supplier production line, of which there are tens of thousands. A cost to your supplier is a cost to you, because it will inevitably affect the cost of goods sold. - IT cost implications both internally and at your suppliers. - If you don't get 100% of suppliers adhering, you don't get as much benefit. Good luck getting Coca-Cola to change their production lines for no benefit to themselves! They are not cheap to maintain: - At an estimated 2p per item, if you are shipping 10 billion items that is £200,000,000 a year just in tag costs. Alternatively put, if you sell items for £1 on average and make 4% net profit, that cost of tag cuts deep. - There is an incremental cost for suppliers to maintain all that equipment to apply tags or build them into the packaging (which comes back in COGS). - Maintenance of all RF readers And inventory routines are cheap relative to this cost: - Assuming you have 1000 stores, and spend 5 hours per day on inventory routines @ £12 total cost to employ, you are talking a £20m cost (5 hours assumes gap scanning & code checking). I assume a manual financial account is still required once a year to account for failed tags. So we have to come up with other benefits, like top-line growth driven by a better customer experience, but customers will have to be willing to pay for this with higher prices.