Technology
Domino Features Tiered Solution
for RF Compliance
Sam’s Club pulls back on tagging schedu le.
Domino Integrated Solutions
Group (ISG; Dallas) offers
three tiers of solutions for meeting RFID tagging requirements from
retailers. The solution suite addresses
the various requirements for container tagging set out by Walmart Stores
and Sam’s Clubs.
After laying out an aggressive
schedule for EPC labeling last year,
Sam’s Club in January scaled the
requirements back, citing supplier
concerns over the cost of the RF tagging. The wholesale club reduced $2
and $3 fees imposed for untagged
pallets to 12 cents.
Suppliers have been tagging pallets
and cases for several years for supplying Walmart stores. So those that
supply to both chains have had a head
start for meeting Sam’s Club mandates. At Walmart, the focus has shifted from the DCs to the stores. At the
store level, tagging supports tracking
promotional displays and high-value
items and departments.
Sam’s Club is emphasizing pallet
tracking, and is committed to 100%
tagging at the packaging sellable
level.
“Sam’s Clubs stack in pallet, and
sell in bulk, so they are focusing on
the pallet tracking and point-of-sale.
They want to move to [hands-free]
self-checkout. The sellable units
[at the wholesale clubs] are higher-dollar, higher-margin sales, so the
tagging is more affordable,” says
Dwain Farley, CEO, Domino ISG.
Sam’s Club last year had called
for sellable-unit tagging by October
2010. Case tagging was to be in place
by October this year. Pallets shipped
to all of its 22 DCs had required tags
as of January 2009.
For pallet tagging, Sam’s Club
has now advised that it will
“prepare for a chainwide
rollout of pallet-level labeling by 2010.” It said that
the schedule for item-level
tagging is under review. Case
labeling is now optional.
“Case-level tagging doesn’t make
that much sense [at Sam’s Clubs],
because in most cases the in-store
product is at the pallet level,” Farley
says.
In a letter to suppliers, Sam’s Club
CEO Doug McMillon wrote that
“Sam’s Club remains committed to
the vision of 100% EPC labeling on
selling units.
“While there are benefits to case
labeling in the Sam’s Club environment, and some suppliers that are
labeling cases today have found value
based on supply-chain visibility, the
benefit to our members is less significant when compared with the benefit
of selling-unit labeling.”
“[Since the tagging mandate was
announced in January 2008], several of you have contacted us with
questions, concerns, and suggestions,
particularly in light of the current
economic environment. We learned
we need to clearly help you understand the benefits of selling-unit
labeling before we lock into a firm
deadline,” McMillon wrote.
“Sam’s Club suppliers pushed
back. We are seeing the same thing
[in the RF solutions business], due to
the economic climate,” Farley says.
Farley says two local Dallas-based
firms recently had second thoughts
about investing in a coding solution.
“They went back to Sam’s Club and
said, ‘Overall, our business is down.
We don’t have the margin in the
products to invest in the technology
and apply the tags.’ ”
Farley notes that in the past year,
many Sam’s Club suppliers found it
easier to pay the pallet fees rather
than put in their own systems.
Sam’s Club is expanding testing
of shelf tagging for pallet tracking in
the clubs. RF interrogators mounted
on forklifts track the placement of
tagged pallets by associating each
