JC Penney Slows Down RFID Rollout Pace

JC-Penney-rfid-blogRon Johnson, CEO of JC Penney, shocked the RFID industry a little bit last summer when he said in an interview that JCP would be virtually 100% RFID-enabled in its stores by Feb. 1st, 2013. JCP had already been rolling out RFID capabilities in store in several product categories for the usual benefits in inventory accuracy and reduced store labor.

Johnson observed that “You go to most retail stores, all you see is people doing work to execute the retail strategy. It’s stocking shelves and transacting business,” adding that about 10% of its labor spend in store, or half a billion dollars a year, is involved in processing transactions at traditional POS terminals.

“That’s going to all change, because of how we use Wi-Fi, RFID, mobile checkout,” Johnson said. “You’ll be able to check out anywhere anytime, from anyone including yourself, because we’re going to roll out self-checkout to our stores next year, and it’s really cool and it’s really easy because it’s RFID-based.”

He added that RFID would have big benefits for the consumer over bar coding: “You don’t have to scan an item. You just throw it down and there’s the price,” Johnson said.

However, news this week from several SCDigest readers say that Penney’s is slowing down the tagging tollout, meaning the company will be far from fully RFID-enabled by Feb. 1.

So why the pull-back?

“I think JC Penney was just caught in a sort of Rubik’s cube in terms of merchandising, store layout and product tagging,” one Penney’s vendor told SCDigest this week.

“They are changing the merchandise plan, so there is no need to tag products that may be eliminated soon. Store layouts are also changing, being done in conjunction with the merchandise plan, and which include the ‘sores in store’ concept for things like Levi’s jeans and more. There are just too many moving and inter-connected parts to go forward with a full RFID rollout.”

SCDigest’s view is that the explanation offered by the Penney’s vendor makes sense, the Johnson’s accelerated roll out was probably unrealistic, and that all new technologies take longer to adopt than expected.