Best Buy Taking Baby Steps to Full RFID

Dubbing it "go slow to go fast," Best Buy EVP says everyone wants to have RFID, but few agree on what they want to do with it.

Best Buy has gone public with its RFID plans, pledging to move all of its major suppliers to start delivering RFID-compliant tags for all product cases and pallets by Jan. 2, 2006. The deadline for those suppliers to support all product cases and pallets is May 2007.

But the $25 billion Fortune 100 retailer said this rollout—which has been in the works for about a year—is being done at a relatively relaxed pace. "This is going to be a go slow to go fast move," said Bob Willett, executive vice president of operations for Best Buy, in an interview. "Weve barely got our feet in the water."

Willett said the deadlines were set by a group of Best Buy executives and 11 major supplier representatives. "We havent dreamt up this deadline on our own. Were deliberately keeping this [requirement] at a low level, to keep it digestible," he said. "Were not asking for massive levels of sophistication here. We could have asked for a much more sophisticated level of tag."

The reason Best Buy wants to let its more than 750 storefronts ease into RFID is that, while they are certain that RFID is where the industry is—and should be—headed, "none of us have yet worked out how to get there. Frankly, were learning. Theres a lot of hypothesis around this," Willett said.

/zimages/4/28571.gifTo evaluate one vendors effort to streamline RFID implementations, click here.

"This is all about trial, evaluate, rollout. No one isnt embracing RFID," he said. "But at the end of the day, no one is absolutely sure where this will all lead."

The Best Buy EVP took pains to differentiate using the technology and using it wisely. "Best Buy is a very innovative company. But I dont see [this RFID effort] as pioneering. What is pioneering is how well use it effectively," he said. "Few companies fail because of lousy strategy. They fail because of poor execution."

Best Buy wants to use RFID to advance customer objectives and to make major improvements in inventory control, labor forecasting, price optimization and value targeting.

"RFID is not RFID on its own. How do you use that technology? For example, how does it get used in space optimization?" he said.

Next Page: Top Best Buy goal.