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Walmart delays item level deployment; tag predictions for 2011 drop 51 percent

Analysts at VDC Research have detected a slowdown by Walmart and other retailers when it comes to the deployment of item level RFID. When retailers met at the NRF show in New York in January, they were very bullish on item level RFID in announcing the Item Level RFID Initiative.

However, since that date, Wal-Mart’s deployment for women’s apparel has been delayed by approximately two quarters, shifting demand to Q4 and Q1 2012. VDC has downgraded its transponder forecast for the retail sector to 2.1 billion for 2011.

According to VDC, the delay pertains to ensuring that the supply chain has adequate support, time and resources for a successful deployment. It appears Wal-Mart does not want to repeat the previous issues and challenges they encountered when implementing RFID in their supply chain.

Macy’s and American Apparel are also not scaling as quickly as anticipated.

“These delays have caused us to revise our estimates and forecasts for the EPC UHF market downward in 2011 as well as adjust the growth rates in 2012 and 2013,” says Andrew Nathanson, Practice Director at VDC Research. “These changes were limited primarily to transponders in the retail sector. Passive EPC applications outside of retail remain on par with our earlier expectations. We strongly feel that these delays should be considered a temporary bump in the road.”

Click here to read the full VDC report and the updated retail predictions.

 

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