Radio Frequency Identification technology (RFID) has been reshaping the retail sector silently for some time. It is used to identify and track the products. It is changing the way both customers and stores are buying and selling merchandise.

“A study by tech giant Accenture points out that RFID has been adopted by 69 percent of the global retail sector and this figure is set to rise in the future”.

The concept of RFID has existed for more than seventy-six years. It has seen major developments in the recent decade and has been fast adopted in the retail sector in the last few years. Factors like low cost, global standardization, easy availability, advances in ultra-high frequency passive tags, and compact RFID readers are among the few factors that have resulted in the popularity of RFIDs in the retail sector.

What is RFID and how does it work:

RFID technology can be understood to be similar to bar code technology except for the fact that instead of an optical scanner, RFIDs are read by an electromagnetic scanner. The barcode sticker is replaced by an RFID tag that contains a chip with all the product data in it. The tag can be either a passive tag (without a power supply and energized by the electromagnetic waves from the scanner) or an active tag (having its power supply).

The tag readers or scanners can be of various types such as hand-held devices, door scanners, or even mobile phones. Since each tag has its unique code, a scanner can read multiple tags at one time. The data collected from the tags is transmitted to computers connected to the scanners by cables or wirelessly.


Advantages of RFID in the retail sector:

RFIDs have multifold benefits due to which they are being adopted in the retail sector. Some of the benefits are mentioned below:

1. Efficient Inventory Management:


The use of RFIDs leads to efficient inventory management. Due to the automated scanning of the merchandise, there is an effective, high-speed record of the goods being sold and the number of remaining articles. Also, due to the mechanized process, inventory management becomes easier and accurate.

2. Proper Supply Chain Management:

Due to the exact location of the products on the move, there is improved product visibility. Retailers can trace the exact location of the goods giving them better control over the supply chain. By installing door scanners at the entry and exit points, the storekeepers can keep a track of the incoming stock and shipped out or sold products.

3. Reduction in Inventory Management Staff:

Due to fast and efficient inventory management, retailers require less workforce or man-hours to manage their inventory. This reduces labor costs.

4. Better store security:

Due to RFID tags on the products, store managers can keep a real-time track on the products on the move. Any theft or illegal movement can thus be detected and neutralized.RFID

5. Product advertisement:

RFID tags can be used for advertising products. The visitor can simply use a mobile phone to read the RFID tag and find the details of the merchandise. This increases the sale of the products.

6. Automated checkouts and cashless payments:

Once the buyer has filled the shopping cart with tagged products, the checkout counter scanner can automatically read the tags and the customer can directly pay through their mobile wallets. This reduces the shopping time and increases the customer’s in-store experience.

7. Better Access Control:

RFIDs can provide better access control. RFID enabled access cards to allow selected personnel or customers to access restricted areas in a store leading to better service and security.

8. Direct increase in sales:

RFID tracking enables the store owners to find out which products are selling more; at what rate and at what time. This helps them modify the products on display increasing their direct sales.

RFIDs have something for everyone.

RFID technology has benefits for everyone. Let’s take a look at them:

For the customer:

RFID can help the customers locate their required goods in very less time. Due to accurate, real-time inventory management made possible by RFIDs, a buyer can quickly find out if the required product is in stock. Also, they can find their physical location in the store and browse through the product details of the same.

For the retailer:

RFIDs increase the accuracy and efficiency of the inventory and supply chain, reduces the time and cost of operations and losses due to theft and misplaced products.

For the brand owners:

Due to the monitored movement of tagged products, brand owners are safe from counterfeit products. Any untagged product can be a duplicate and thus can be zeroed down and investigated. They also get accurate data on the number of goods getting sold which helps them in tweaking their manufacturing activities.

Examples of RFID in retail:

Several retailers have implemented RFID technology to their benefit. Here are a few examples.

River Island:

The British apparel giant, River Island implemented RFID in its retail operations. They reported that the inventory accuracy went up from 72% to 96%. Previously, they used to carry out stock checking once in a year and it required one day to complete. Now with RFIDs, they do it every week within 3 hours. With better inventory data, they were able to reduce the out-of-stock scenario of products by 11% and boost sales by 5%.


This multinational giant has implemented RFID tagging of all its products. It was done both for company outlets and partner stores. This has led to the complete visibility of its global inventory. It helps Nike to make informed decisions on product manufacturing. Also due to improved supply chain management, without increasing the inventory, Nike able to increase its profits by 7%.

In summary:

RFID is positively influencing the retail sector. It has a great future and promises to make retail more secure, efficient, and profitable. It improves the shopping experience, brings visibility in the inventory & supply chain promising even more. RFID could truly be the new age solution of keeping the shoppers in brick and mortar shops.

The increasing technological advancements and innovative applications of RFID, we are bound to meet its new frontiers in the retail sector. It could well be the next solution towards the expectations of the shoppers, retailers and brand owners.

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