How an RFID System Can Benefit Your Retail Business

How an RFID System Can Benefit Your Retail Business

The prominence and applications of RFID are growing at a rapid pace, and they offer considerable benefits for retailers. More than 69% of retailers worldwide have adopted some level of RFID use, and the numbers continue to increase as technology becomes more affordable.

RFID can be a valuable tool in inventory tracking and management, transforming any existing inventory system to a more effective and productive model. Its effectiveness has been proven with its wide applications in industries ranging from automotive to defence, pharmaceuticals, medicine, government, manufacturing and logistics.

Adopting new technologies, especially when you have a working system in place can seem unnecessary. However, the advantages that RFID offers makes it a worthwhile option to explore, particularly if you plan to expand to omnichannel sales. Here is guide on RFID and how an integrated RFID retail inventory tracking system can help your retail business.

What is RFID?

RFID refers to Radio Frequency Identification and uses electromagnetic radio waves to read and identify tags that are attached to objects. Information can be stored electronically in the tags which can then be read by RFID readers or scanners, either handheld or fixed.

The concept of RFID first evolved in the 1940s, in the form of a radar that can convey information. Due to issues in power communication, the development was slowed down. In 1973, a patent was filed for a passive radio transponder with memory, and it became the foundation for modern day RFID. Original applications for RFID were intended to be in transportation, banking, security and medicine.

In the past two decades, the cost of RFID tags dropped, reliability reached 99.9%, and printers started including capabilities to print and encode RFID chips. Readers for RFID tags also became more compact and affordable. An RFID tag can store more data than its equivalents, giving you greater clarity on the product. Although RFID compatible printers can be expensive as compared to other printers, there is a significant enhancement of functionality.

Applications of RFID in Retail

The technology behind RFID might be intimidating, but using it is simple, and similar to using barcodes. With a RFID compatible printer, you can print and encode a RFID tag and directly attach it to any product.

When a reader is passed by a product, it can scan the tag and transmit the stored information, thereby tracking and identifying products from a distance. Typical RFID readers can scan from a distance of even 20 feet away, without a direct line of sight event. They can be handheld or location fixed, and can even be attached to doors for automatic scanning.

Some manufacturers include RFID tags at the point of production, and it can also be attached to other forms of sales tags and stickers. In contrast to barcodes, an RFID tag can be scanned from any location close to the tag, even inside a container and without facing the actual tag. The broad applications of RFID in retail are:

1. Inventory Management

In retail, the single largest application of RFID is in inventory management, as it gives 99%+ inventory accuracy. By attaching RFID tags to products, you can easily track assets and manage inventory overall, whether in warehouses, storage spaces, or in transport. If any products are running low, or are delayed, you will find out instantly and can follow up with suppliers.

The accuracy of RFID is unparalleled and scanning RFID tags takes a fraction of the time that it would take to scan typical labels. With up to date product tracking you can avoid being out of stock of popular items, and over stocking unpopular products. Keeping up-to-date with inventory is particularly important if you have a fast-moving store, or multiple storefronts.

If you have an omnichannel set up with an offline and online presence, or multiple shops with a single inventory setup, an RFID can prove invaluable. With an RFID setup, you can streamline all the inventory and manage it effectively, keeping track of sales, stock and locations of products. If you are planning to expand a single retail storefront to an omnichannel presence in the future, investing in an RFID system can help you.

2. Sales Management

Apart from warehouse and inventory management, RFID tags can help you keep track of sales and products stored within the store. Any item within the store can have an RFID tag affixed, including trolley carts and baskets, in addition to the products for sale. During promotions, RFID tags can help you judge the success of promotional strategies by tracking sales of discounted items.

With an RFID scanner at the point of sales (POS) setup, scanning products is faster and more accurate. They are also suitable for self-service kiosks. By setting up an RFID scanner and display monitor in store, shoppers can instantly check all the product data, encouraging them to make a purchase.

By tagging all the items with RFID and setting up an RFID scanner near the exit, you can significantly reduce shoplifting and theft. When an item has been paid for, the RFID tag can be removed physically or deactivated electronically. If an item with an active RFID tag approaches the scanner, an alarm can be activated while the product details will be instantly identified.

3. Employee Management

RFID tags are immensely versatile, and can also be attached to employee identification cards. This can help in automatically tracking employee attendance and in scheduling staff. During rush hours, you can instantly find out how many employees are currently on the premises.

If you have certain areas of your premises that you want to grant limited access to, then an RFID tag can be helpful. Specific employees can have RFID tags with permission, or separate passes can be used to grant anyone permission on a need basis. This is particularly useful if you have high value products for which you want to have restricted access.

Benefits of an RFID System

There are considerable benefits of adopting an RFID system for retailers, including improving inventory accuracy, greater customer satisfaction, less shrinkage, lower markdowns and overall higher profits. Retailers across the world have noticed an increase in sales of up to 5-15% by implementing RFID, and a need for 10-15% less working capital as a result of optimised inventory. Here are the specific benefits of setting up an RFID system in a retail business:

  • Store more data

An RFID tag is completely unique and can store a lot more data than any other form of tagging. This helps in detailed identification of products. Since the data is accessed only with a compatible reader, it is not visible from the tag itself. For example, apart from the standard product name, colour and size, you can also include details on the year of production, manufacturing source, materials, and maintenance needs.

  • Inventory Visibility

With an RFID system, there is fast and effective item-level inventory visibility. By tagging each individual item and product, there is greater accountability, particularly when you have massive numbers of products available. For example, if you or a customer is looking for a particular category of products, you can instantly search your database and find all the products in that category.

  • Product tracking

As each RFID tag is completely unique, tracking the movement of products through the entire supply chain is made easier and loss of products is minimised. RFID tags can be durable and weather-proof to withstand wear and tear during transportation.

If you have omnichannel retailing or multiple store branches, product tracking can help you find exactly where items are located. For example, if you or a customer is looking for a specific product, whether online or at your physical retail store, you can check and find out its exact location.

  • Real-time data

Data is a powerful tool that can be analysed and used to improve business performance. With RFIDs, the tags are read instantly and larger amounts of data is transferred, giving you clear insights on the sales of your business. For example, you can identify which specific product variations and sizes are selling the most, and include more products in those sizes.

  • Better product availability

Going out of stock on highly demanded products and over stocking on less popular items can result in reduced sales and unhappy customers. With accurate inventory tracking, you replenish stocks as required and in advance. This can help you avoid running out of items, and establish your brand as having plenty of stock for the items you sell.

  • Reduces staff requirement

Keeping track of inventory and products is a time consuming and labour-intensive task. Even with barcodes, each individual symbol would need to be scanned from directly in front of the barcode. RFID tags can be scanned accurately without being close to the tag itself. As a result, inventory management can be done faster, freeing up your employees for other tasks and to help customers.

  • Prevents theft

Shoplifting and theft is an unfortunate and undesirable aspect of retail sales, regardless of whether it is due to employees or customers. RFID tags are a discreet yet effective way to prevent theft. By affixing an RFID tag to all products and setting up a scanner at the exits, you can identify any product leaving the premises without having the RFID tag removed.

  • Improved customer experience

There are multiple ways that RFID systems help you offer a better customer experience. Proper inventory management supports product tracking and availability, so customers can easily find the items they are looking for, online and offline. Employees will also have more time to personally help the customers. Purchasing items is faster with RFID enabled POS systems, or through self-service kiosks.


RFID uses cutting edge technology to give you optimum results in labelling and identification. The application potential of RFID in retail businesses is significant, especially for inventory management and it offers unparalleled accuracy, speed, and precision.

Using RFID is easy and does not require any specialised training. An RFID compatible printer can print out and encode RFID tags, and a capable scanner can read them. Based on your needs and budget, you opt for handheld or handsfree scanners, and customise the use of the RFID tags.

POS Plaza offers versatile printers and scanners that are RFID compatible, so that you can easily setup an RFID system in your business and reap its many benefits. Reach out to our team today to discuss your needs, so we can guide you in choosing a suitable POS solution