JCPenney Puts the Brakes on RFID Rollout

By Joe Skorupa
A well-publicized announcement last year by CEO Ron Johnson set JCPenney on a course to become the poster child for item-level RFID. In an interview with Forbes magazine, Johnson said JCPenney would be virtually 100% RFID enabled in its stores by February 1, 2013.

Not any longer. The aggressive deadline Johnson announced has been rescinded, according to a letter sent to suppliers. The letter, which was reported in a SupplyChainDigest story on 1/29/13, sharply modifies the plan and scales back the ambitious 100% goal.

In a letter sent on January 21, JCPenney informed its vendors that only 41 product "sub divisions" or categories will require RFID tags. These "sub divisions" are confined to footwear, bras and denim -- a small fraction of the total product categories carried within a JCPenney store.

The letter requests that all suppliers send JCPenney a "new lower cost for all items without RFID tags," which apparently refers to removing the additional cost of adding tags. It also notes that "due to this change, RFID offsets will cease immediately for any merchandise not listed in the above sub divisions or categories." The latter refers to footwear, bras and denim.

Like Walmart before it, JCPenney is learning that RFID technology remains the hardest nut to crack in retail technology. Accelerated, aggressive rollout plans may work for mature technologies, but for emerging technologies like RFID a more realistic approach is slow and steady.

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