We integrate information from over a thousand sources, including our own extensive primary research to provide a clear picture on the trials, Wal-Mart's plans, and both the successes and failures to date.
The report provides a detailed look at the spending by Wal-Mart's 137 vendors in the initial deployment, during 2004, and the prospects for 2005 spending. The report provides market segmentation by compliance approach, and market share information for many RFID value chain participants.
The report details what types of compliance approaches are finding success, and in the case of approaches that are not succeeding, a detailed list of challenges is provided.
This report is intended for investors and investment analysts who need insight to emerging market leaders, for Consumer Package Goods firms who need to understand the most successful sources for RFID solutions, and, for firms in the RFID market who need to better understand their customers, and their competitors.
II. Why this Research Page 4
Examples of Conflicting Findings Page 4
Clearing the Fog Page 4
III. Background of the Wal-Mart Deployment Page 6
Wal-Mart’s 2005 plans Page 6
Wal-Mart Plans After Initial Deployment Page 6
Several Factors Make Consumer Packaged Goods Unique Page 6
IV. A Survey of Efforts to Comply* Page 8
Summary of The 137’s Efforts to Date Page 8
Problems Experienced by the Minimalists Page 9
Three Reasons Why Many Firms Were Minimalists in 2004 Page 9
Slap and Ship Page 10
Success Among Non-Minimalists and Systems Integrators Page 10
V. A Survey of EPC RFID Component Performance, and Suppliers Page 12
Middleware Page 12
Tags and Labels Page 12
Readers, Programmers, Printers Page 15
Packaged Solutions Page 15
VI. A Survey of Costs to Comply* Page 16
VII. A Survey of Systems Integrators providing Compliance Solutions* Page 18
VIII. A Survey of Compliance Results to Date and ROI Prospects Page 21
*These sections contain graphs, data tables, or both
- Active resistance was much less common than has been widely reported. We found the vast majority of firms selected for the trials are making efforts to comply, with only 4 firms making essentially no effort to comply to the mandate – only about 3% of The 137.
- Spending per vendor has been far less than many sources projected. We estimate the average spending by these 137 firms to be just under $500,000 to purchase RFID related goods and services, and perhaps more dramatic, the median spending was less $200,000. We found this level of spending, lower than many had predicted, was caused by at least three factors (see Section IV). Spending in 2005 will grow, but “I” portion of ROI is smaller than most have claimed.
- The most promising areas of ROI for Wal-Mart and its CPG suppliers may be provable by mid- 2005. If Wal-Mart chooses to share this information, the debate on ROI could end quickly.
We found many firms achieving 100% read rate success. Success in compliance varies widely at this point, but the degree of variance will probably diminish quickly with nearly all SKUs and vendors achieving compliance with Wal-Mart’s requirements.
- RFID solutions and product firms with large promotion budgets have not been able to leverage their name recognition into System Integrator wins. Brand name and aggressive advertising have had little effect on the pragmatic, performance driven buyers who support logistics in Wal-Mart’s vendor community. Successful solutions providers are building strong customer references, which could provide significant competitive advantage in the next wave of deployments.
- Other large players in RFID have yet to demonstrate they can ride this new wave . New firms like Alien, R4, Thing Magic, and Xterprise are winning more market share than their older, larger peers.