RFID in Retail
In today's competitive retail landscape, companies are constantly seeking innovative solutions to improve efficiency, enhance customer satisfaction, and drive profits. One such cutting-edge technology that is making waves across the retail industry is Radio Frequency Identification, better known as RFID. Discover how RFID in retail is transforming the way businesses operate and providing substantial benefits to retailers worldwide.
What is RFID in Retail?
RFID stands for Radio Frequency Identification, a technology that uses electromagnetic waves to automatically identify and track tags attached to objects. These tags contain electronically stored information which can be read by RFID readers without requiring physical contact, or even line of sight - making RFID much more efficient than traditional barcodes.
In an industry with a mind-blowing number of barcodes, RFID is playing a crucial role in improving day-to-day operations and overall efficiency in retail.
Retailers who have adopted RFID technology now ensure that all product price tags contain an embedded RFID tag or RFID sticker in addition to the product information and price. By adding an RFID sticker to each product, retailers are unlocking unprecedented advantages in an evolving and highly competitive landscape.
How is RFID Used in Retail?
Once an RFID tag has been placed on a product, it can be uniquely identified from up to 50 feet away - a stark contrast to reading a barcode within only a few inches.
The ability to digital identify a product within a large area, opens the door to a variety of different applications in retail with the most important being inventory management.
Inventory Management
The key to accurate inventory management is regular cycle counting. The more often inventory is counted, the greater visibility retailers have into their inventory.
RFID technology allows retailers to count inventory in minutes instead of hours or even days. While traditional barcodes can be scanned one per second (at most), RFID readers can read up to 750 RFID tags per second.
The ability to count inventory faster, and more efficiently, allows retailers to count inventory more often. Increasing the number of inventory counts provides retailers visibility into:
- Increased product demand
- Increase demand for sizes/colors
- Missing products (and timeline)
- Stolen products (and timeline)
- Insight into slow moving products
Faster Inventory Counts
More Frequent Inventory Counts
Increased Visibility Into Inventory
i.e. - Availability, Demand, Stock Levels
Better Decision Making
- Reorder in-demand items to prevent out-of-stocks
- Locate misplaced products/items
- Create deterrance strategy for frequently stolen items
- Purchase new products based on increased demand in certain colors/sizes/categories
- Relocate slow moving products to increase sell-through-rate
With RFID-enabled accurate inventory management, retailers can use RFID to unlock additional advantages both in store and online.
Locate Misplaced Products
With a handheld reader’s Geiger Counter Functionality, RFID readers can track down missing products. This feature will beep louder and louder the closer you get to the missing item. This ability saves a lot of time searching for items that were misplaced by the customer or left in a dressing room for example.
Accurate Online Inventory
Increasing the frequency of inventory counts and pushing that accurate information to a retailer’s ecommerce store, provides a better customer experience for online shoppers. Whether they choose to checkout online and pickup in store, or purchase the item in store, they can be assured that when they arrive the product will be in stock and available.
Enable Curbside Pickup
Accurate online inventory allows retailers to implement curbside pickup options for online shoppers. Not only does RFID provide accurate inventory information to a retailer’s ecommerce store, but an RFID handheld reader can also help store employees track down products for an online order. Both abilities help to create a seamless online to in-store experience for customers.
Automated Checkout
Similar to how a barcode enables customers to checkout without the assistance of a cashier, RFID tags can be used to do the same – with a twist. Instead of having to scan each individual price tag, all the items can be read in a shopping basket without human-assistance. Take a look at Uniqlo’s automated RFID checkout.
Supply Chain Optimization
When RFID tags are placed on products further up in the supply chain, retailers can increase the efficiency from the top down – starting directly after manufacturing and ending with the point of sale at a local retailer.
With RFID tags on products and on boxes, retailers can monitor products through various points of the supply chain, which can help prevent overstocks or stockouts. The added information can also help to identify bottlenecks and inefficiencies within the supply chain, which can result in increased on-time deliveries, cost savings, and a more efficient, improved workflow.
With UPS and other logistics companies implementing RFID-tagged shipping labels and outfitting their delivery trucks with RFID technology, near real-time tracking throughout the supply chain is becoming achievable. By replicating UPS' RFID tags and hardware setup, companies can bring this functionality to their internal logistics for near-real time visibility.
How Did RFID Start in Retail?
RFID gained attention in retail in the early 2000s when Walmart required top suppliers to tag shipments for better inventory tracking. Despite challenges, this push spurred innovation, leading other retailers like Target and Best Buy to explore RFID. Today, RFID is essential for inventory management, with retailers like Nike and Macy’s using it to maintain stock accuracy and improve fulfillment. Advances in tag affordability, reader accuracy, and cloud analytics have made RFID an industry standard. Learn more in our article: Walmart & RFID: The Relationship That Put RFID on the Map".
Shop Retail RFID Products
Discover the best RFID products for retail in order to take your operations to the next level. From RFID handheld readers and fixed readers to RFID antennas, tags, and labels, we offer a full range of solutions designed to enhance inventory accuracy, improve checkout efficiency, and streamline retail workflows.
Whether you're implementing RFID in retail for the first time or upgrading your existing system, explore our top-selling RFID products trusted by leading retailers. Shop now and unlock the full potential of RFID in retail!
Who Uses RFID in Retail?
Some of the biggest names in retail use RFID technology to accurately measure inventory and to have better visibility into the entire supply chain. The RFID revolution in retail was started when Walmart made the decision to require all incoming shipments to be tagged with RFID tags, as early as 2006.
Since then, the rise in RFID use in retail has been a global movement, affecting retailers such as:
- Luxury retailers like Burberry, Nordstrom, Prada
- Big box retailers like Walmart, Target
- Specialty retailers like Dick’s Sporting Goods, Lululemon
- Warehouse club retailers like Sam’s Club, BJ’s Wholesale
- Convenience store retailers like 7-Eleven
- Department store retailers like Belk, Macys, Dillards
- Home improvement retailers like Lowe’s, Home Depot
- Food retailers like Kroger
How Do Retailers Implement RFID?
There are a few key steps in implementing RFID technology in retail.
1. Assess Business Needs & Goals
- Identify current inventory challenges like shrinkage, out-of-stocks, etc.
- Define key objectives such as 99.9% inventory accuracy or daily inventory counts
2. Evaluate the Cost & Feasibility
- Work with RFID experts to determine the scope of the project and cost
- Identify any potential challenges like integrations or unfriendly environments
- Conduct a pilot program in one store, or warehouse
3. Select the RFID Hardware/Software
- Determine if you will work with an RFID solution provider or create custom software
- Talk to an RFID hardware provider to select RFID hardware and tags, purchase tag sample packs if available to test tag size/durability
4. Install & Integrate with Existing Systems
- Carefully install the new RFID system and thoroughly test the setup
- Connect the new RFID system with POS, WMS, or ERP systems
- Work with IT teams to ensure all systems integrate with near real-time visibility
5. Train Staff and Update Processes
- Train employees on RFID uses and benefits
- Establish workflows for inventory counting, finding lost products, and identifying low inventory
6. Deploy the Solution
- Roll out RFID in phases across one store at a time
- Monitor each RFID phase roll out and refine processes
RFID Retail Mandates
Once retailers deploy RFID in-house, they can work with suppliers to see if RFID tags can be integrated further up in the supply chain instead of at the point of sale. This is common in larger retailers like Walmart, Nordstrom, and Dick’s Sporting Goods and can be accomplished by ensuring suppliers comply with an RFID mandate.
RFID mandates are basically standards put in place by retailers requiring that all products have an RFID tag with specific information printed on the front, and contained inside.
To learn more about RFID supplier mandates and how we can help, take a look our RFID Supplier Mandate Guide.
Learn More About RFID in Retail
For more information on how RFID is used in retail, contact us or continue learning with our resources listed below.
