The company is requiring all suppliers shipping products to its Sam Club’s distribution center in DeSoto to start applying the radio tags to their pallets starting today.

If they don’t, Wal-Mart will charge the suppliers $2 per pallet to do it for them, the company informed them in a letter earlier this month.

“I think everyone recognizes that it’s the future of how products are going to move through the supply chain, and not just at Wal-Mart, but everywhere,” said Wal-Mart spokesman John Simley.

Wal-Mart and radio frequency identification vendors say the new timeline – with additional distribution centers around the country coming online later this year – highlights the fact that the wireless technology is working as intended, cutting down on out-of-stock problems and boosting sales.

And it’s another sign that the Dallas area is one of the major centers of RFID development and implementation.

Dean Frew is president and chief executive of Carrollton-based Xterprise Inc., which helps other companies, including many Wal-Mart and Sam’s Club suppliers, implement RFID systems.

Mr. Frew said the new timeline for shipping RFID-tagged pallets to the Sam’s Club distribution center will definitely help Wal-Mart, although the payoff for the suppliers themselves might be a bit further off.

“There’s clearly a benefit for the suppliers,” he said. “Is it as immediate as they would like to see? No, probably not.

“But you can’t ignore the fact that if they’re able to keep the shelf stocked more efficiently, in the end suppliers are going to benefit as well.”

RFID technology includes a paper-thin tag with a tiny chip and antenna. When in range of a wireless scanner – at a loading dock in a warehouse, for example – the chip is activated and transmits a small burst of data about the product it’s attached to.

The goal is an automatic electronic inventory system that can track when products come in the warehouse, when they get shipped to stores, and, eventually, when they get sold off the shelf.

After the DeSoto distribution center ramps up, suppliers will have to add four more Sam’s Club distribution centers – including one in Dayton, Texas – to their list by the end of October, and then 17 more by the end of January 2009.

The DeSoto facility will also be the first Sam’s Club distribution center in the country where suppliers will be required to tag every case on a pallet (Oct. 31, 2008) and then every single item that makes it on to store shelves (Oct. 31, 2009).

The timelines should remove any confusion that suppliers have about what they need to do, Mr. Simley said.

“A lot of suppliers of Sam’s were asking for some clarity,” he said. “What do you want us to do and when do you want us to do it by?”

Making DeSoto the launching pad for that effort makes sense.

The Dallas area’s reputation as a top spot for RFID technology can be traced to a variety of sources, from technical work done by researchers at Dallas-based Texas Instruments Inc. to Wal-Mart’s own RFID pilot program, which started in the region.

The area is home to scores of RFID-focused start-up firms, while the Metroplex Technology Business Council is trying to brand the Dallas-Fort Worth region as the “RFID Hub.”

The annual RFID World convention has been held in Grapevine for several years, although the 2008 event is being held in Las Vegas

Source : VICTOR GODINEZ / The Dallas Morning News / January 30, 2008

The world’s largest retailer is luring customers with $4 prescription drugs and energy-efficient light bulbs. “I thank God we are positioned like we are this year. If you had this economy at this time last year when we were positioned like we were, I wouldn’t be up here,” Mr Scott told analysts.

Last year, Mr Scott turned the Arkansas-based company’s focus back to basic clothing after an attempt to attract higher-income customers with more fashionable apparel failed to drum up sales. For Mr Scott, 59, who oversaw the loss of $115 billion of stock market value in his first seven years at the helm, rising sales are a sign the company is turning around. This year, Wal-Mart is the biggest gainer on the Dow Jones Industrial Average, gaining 23% in New York trading.

A year ago, Mr Scott addressed investors after posting the smallest annual increase in individual-store sales in at least 27 years. This year the annual meeting followed a 3.9% increase in May sales at stores open more than a year, higher than the company or analysts had predicted. “If they had had this economic downturn a year ago, they would be in the same situation,” said, Patricia Edwards, who helps manage $14.8 billion in Seattle.

Wal-Mart said last week that lower prices on groceries, medicines and laptops attracted shoppers. Tax rebates also spurred sales as consumers grappled with job losses and the worst US housing market in a quarter century . Investors pushed Wal-Mart to a four-year high in New York trading last week. However, the retailer’s fortunes might still falter should the economy begin to recover. Mr Scott’s attempt earlier in the decade to push into trendier clothes didn’t boost revenue even as the economy grew.

Wal-Mart is now focusing on its main customers, families in lower-income brackets. In late April, the company started cashing rebate checks for free and cut prices on shampoo, cereal and groceries, targeting Americans who are to receive more than $100 billion in tax rebates through July. That has paid off by bringing in shoppers. Wal-Mart has cashed $350 million in rebates, and an undetermined amount has been spent in the stores, CFO Thomas Schoewe said last week. The results reflect the changes the company has made in the past year after its earlier missteps.

The songs will be sold in MP3 format, which means users of the Rhapsody service will be able to play them on iPods. Before now Rhapsody, jointly owned by Real Networks Inc and Viacom Inc’s MTV Networks, had focused on a subscription service, allowing unlimited song streaming for $13 to $15 a month, rather than selling downloads.

But Rhapsody Vice President Neil Smith said the fact the service has not been compatible with Apple Inc’s top-selling iPod digital player has limited Rhapsody’s reach.

“We’re no longer competing with the iPod,” Smith said. “We’re embracing it.” Rhapsody also will be the music store back-end to MTV’s music Web sites and iLike, one of the most widely used music applications on social networking site Facebook.

Rhapsody will be available on mobile phones via the Verizon Wireless VCAST Music service. Buyers of a song over-the-air directly from phones also will be able to download that song to their computer. Verizon Wireless is a joint venture of Verizon Communications Inc and Vodafone Group Plc.

Rhapsody executives describe the strategy as “Music Without Limits.” They said it would be backed by a marketing blitz worth up to $50 million in media space over the next year in part by leveraging co-parent MTV’s TV networks and Web sites.

CHALLENGERS
Rhapsody is the latest player to challenge iTunes’s 70 percent-plus market share of U.S. digital music sales. Last month digital music service Napster Inc launched an MP3 store.

Both Wal-Mart Stores Inc and Amazon.com Inc launched stores last year. None of the new stores has made much of a dent on Apple’s lead. Early this year iTunes became the biggest music retailer in the United States. It has sold more than 5 billion songs since it launched in 2003.

Its success has been due partly to a seamless interface between iTunes and the iPod and because it provides a good user experience, said analyst David Card of Jupiter Research. The new digital MP3 stores have been made possible because the four major record groups last year started to experiment with allowing retailers to sell music without digital rights management (DRM) software to prevent illegal sharing of music.

Analysts believe the move by Vivendi’s Universal Music Group, Sony BMG , Warner Music Group and EMI Group will help open the market for retailers and music companies. “I think we’ll see retailers begin to compete the way they usually compete with pricing, merchandising and promotions, rather than due to some arbitrary technology,” Card said.