RFID to Be Served 7-Eleven Style

7-Eleven's CIO says to go along with the industry, the convenience store chain will wind up with a Wal-Mart-dictated solution that will work better for them than for 7-Eleven.

A dairy truck driver pulls up to a 7-Eleven convenience store and is preparing to deliver crates of milk when the store manager greets him.

"Hold on a moment," the manager says, as he looks at an RFID readout on his PDA. "These crates over here are bad. Sure, theyre registering a good temperature now, but it looks like they got way too warm for nine hours yesterday. Did you pull over for a break and suffer refrigeration problems? No matter. I wont take these three over here, but it looks like the others are fine. Bring em in."

That hypothetical scene is exactly where Keith Morrow—the CIO of $36 billion retail convenience store giant 7-Eleven—would like to see RFID take the nations largest convenience store chain. But to get those and other capabilities, Morrow knows that he must pave his own path to RFID and not let other industry leaders clear the way.

Wal-Mart was out early and loudly in the RFID game, forcing suppliers to begin the expensive and painful retrofitting and new procedure processes. Other major retail CIOs—including Best Buy and Circuit City—have said they are willing to let Wal-Mart and others lead the way and therefore make the mistakes that they can inexpensively learn from. But 7-Eleven sees its operations as radically different than most other major retailers and that the convenience store segment has far too many unique challenges and opportunities to follow the leader.

/zimages/6/28571.gifTo read more about Best Buys RFID strategy, click here.

"If we do that, were just going to get a Wal-Mart solution. I think our implementation will have to be different. Our requirements are different. Its not in our best interest to let someone else completely" set the direction, Morrow said in an eWEEK.com interview.

Much of this involves how extremely different 7-Elevens more than 27,000 stores are from non-convenience chain retailers. Beyond the stores being open 24-by-7, 7-Elevens have an extremely varied—even by todays standard—product mix, from gasoline and sandwiches to prepaid phone cards and money orders. A typical 7-Eleven carries about 2,500 different products.

The neighborhood locations draw not only a large number of customers—about 6 million a day—but a demographic range that is among the most diverse anywhere in retail, cutting across almost all age and income categories. "The demographic of our customers is everyone," Morrow said. On-site inventory is minimal. At any point, "most of our inventory is on trucks," he said.

/zimages/6/28571.gifTo read more about the challenges of a retail RFID strategy, click here.

Of the greatest IT concern, though, is the small size of each store, often supporting only two and maybe three POS (point of sale) units. Each shopping trip is also very quick, making the customer expectation of a quick trip out of the store essential. An inconvenient convenience store is not long for this world.

Next Page: A relatively young POS fleet.