But it did, even though it has softened the edges of its so-called line in the sand a bit. And Jan. 1, 2005 has come and gone. Now all eyes are on Wal-Mart to ascertain when –more than whether –RFID becomes as commonplace as UPC.

The January 1 date for compliance has been rolled back to "early February." As a result, Simon Langford, Wal-Mart's manager of RFID strategies, has yet to announce any results. But at least three major studies, conducted among Wal-Mart's first-phase of suppliers during the months leading up to the deadline, reveal a mixed bag of results both critical and hopeful.

Two of the studies confirm that, in general, suppliers waited too long and paid too little to develop solutions for meeting the mandate. A study of the 100 suppliers by AMR Research, based in Boston, concludes that they "did not view RFID as a strategic investment and have patched systems together just enough to meet Wal-Mart's compliance deadline."

Specifically, it found that the suppliers have spent between $1 million to $3 million each on RFID, "which is enough to purchase tags, readers, and minimal software. In order to see any significant benefit," AMR analysts says, "suppliers must integrate RFID into their applications, change existing software, and enable large volumes of data to be stored." These researchers estimate that meeting that objective would cost each supplier between $13 million and $23 million.

In studying RFID preparations by the targeted 100 and 37 additional major Wal-Mart suppliers during November and December 2004, Incucomm Inc., based in Dallas, delineated the differences among their responses to the mandate. It, too, concluded that spending was far less than projected. The average, it says, was just under $500,000 on the purchase of RFID related goods and services, and the median spending was less than $200,000.

This was not the result of "active resistance" among the suppliers, Incucomm concludes. Steve Roemerman, Incucomm's CEO, says, "we found the vast majority of firms . . making efforts to comply," with just four –or 3% --making "essentially no effort." Almost half, 47% of the suppliers used internal, "do-it-yourself," teams to develop minimal solutions; another 24% contracted with outside suppliers to program and provide RFID tags under a method widely referred to as "slap and ship;" and 20% hired outside firms to provide RFID solutions that integrated "to a significant degree" with other systems. Of the remainder, 4% had or were developing RFPs to select a contractor to assist in RFID compliance.

It is integration with existing systems that will reap the real benefit of RFID, but is the most complex and costly aspect of converting to RFID. The small RFID tags on products allow retailers and manufacturers to track goods from the warehouse to the store shelf, helping to reduce out-of-stocks, theft, labor costs, and counterfeiting. In summary, the tags contain a magnitude of information, which is read by radio frequency, eliminating the need for individual scanning. The "reads" can then prompt appropriate responses, such as speeding or delaying shipments, re-stocking shelves, halting poor performing promotions, or even eliminating slow-sellers, among other systems along the path from production to store.

AMR's research director, Kara Romanow, says, "there were too many hurdles to overcome in too short a period. Many of Wal-Mart's suppliers are more convinced than ever that there is no ROI, even worse, consider their technology investments to be throwaway thus far. Because of this," she says, "they've only spent the bare minimum needed to comply."

Costs of hardware, software and tags are higher than the (supplier) industry expected. The combined with the lack of return on investment, especially for low-value consumer goods, failed to convince suppliers of any benefit beyond maintaining their relationship with the retail giant. That is an incentive, but just enough of one to force minimal efforts.

Romanow and Roemerman, however, continue to conclude that RFID is on a path toward widespread adoption. "While costs still prevents positive business cases for low-value products, retailers and manufacturers should look at high-value product areas like consumer electronics, DVDs, pharmaceutical, high-end apparel or sporting goods where there is a strong, positive business case," says Romanow. She also urges "fast followers, both retailers and manufacturers not in Wal-mart's top 100," to "pay careful attention to the lessons learned thus far."

Incucomm analysts believe "the most promising areas of ROI for Wal-Mart and its top suppliers may be provable by mid-2005, and, if Wal-Mart chooses to share this information, the debate on ROI could end quickly." Wal-Mart's Langford is scheduled to address RFID implementation at an interactive web conference on February 28, sponsored by several technology suppliers, produced in partnership with Integrated Solutions Magazine and Chain Store Age and hosted by Xtalks, a web-based information network.

Efforts at RFID standardization are picking up speed, which should also help eliminate suppliers' reluctance to invest in more expensive, but ultimately more productive RFID capabilities. The third annual RFID ROI summit takes place in London later this month. The goal is worldwide, certified standards, such as those once established for UPC bar coding.

On the positive side, Incucomm found that many of the Wal-Mart suppliers are achieving 100% read rate success from their RFID tags. "Success in compliance varies widely at this point," Roemerman concedes, "but the degree of variance will probably diminish quickly with nearly all SKUs and (top Wal-Mart) vendors achieving compliance with Wal-Mart's requirements."

In a study by Yankee Group, conducted during the countdown to compliance, analyst John Fontanella concludes, "there are some legit problems to be overcome," and he calls the automatic tracking of products along the supply chain "a work in progress." He also notes that Wal-mart is taking a collaborative approach with suppliers, is willing to accept slap-and-ship solutions for now, has been willing to eliminate some (low-value) products from the program, and is flexible on its proposed rollout strategies as long as suppliers show a commitment to making RFID work.

Meanwhile, RFID has had bad press. Because RFID tags can contain valuable marketing data on consumer purchases and actually track merchandise home and in use, some civil liberties groups warn that RFID is Big Brother's closest sibling. One newspaper even reported that an RFID label would make a microwave oven blow up. Yet, RFID is not really new. It's the tiny chip people have sewn into dogs, and, in rare cases, even small children, so guardians can be located when these loved ones go astray. Hospitals use it to comfortably obtain vital statistics from ailing, immobilized patients.

Yet, it is Wal-Mart that will forever be IDed as injecting RFID into the realm of consumer products and consumers' consciousness, even though Target, Albertsons, and a few others followed its mandate with their own as did the US Department of Defense. Wal-Mart's next RFID-Day comes this October when the mandate extends to its next largest 200 suppliers and to three more distribution centers and another 900 stores. And Wal-Mart means this to keep this mandate, too, despite some apparent disappointments in its first significant nudge to move the world of retail toward RFID.