RFID for Retailers: Either Lead or Be Led

The retail industry is ever-changing. New technology and innovation re-focuses and alters the marketplace at every turn. Retailers must stay ahead of the curve to attract new customers, retain the loyalty of existing customers, and streamline operations to sustain profits.

Adopting RFID is a win-win strategy that allows today’s retailers to forge ahead in this ever-changing landscape while leading the industry in a new and innovative direction. Mark Roberti, founder and editor of the RFID Journal, says in an article, “RFID’s Tipping Point, “What I see is a technology that is beginning to build critical mass in retail. At some point, enough retailers will have put RFID in stores that suppliers will decide they might as well tag all of their clothing. At that point, other retailers will quickly follow suit, and RFID will spread rapidly through the rest of the retail sector.”


Some large global retailers such as Walmart, Macy’s, Zara, and JC Penney, are already using RFID technology and the use of RFID tagging has significantly increased over the past five years. But the industry is poised for an exponential growth surge in the very near future. The RFID Journal reports that the retail industry could “see tag volumes grow from 5 billion [at present] to 10 billion to 50 billion in the space of just a year or two.” A Frost & Sullivan report on tags, hardware, and middleware/software, predicts that the RFID retail market “will grow from $289 million in 2011 to $3.2 billion in 2017,” with significant growth in the areas of “apparel and footwear, perishables, jewelry, and personal care.”

Retailers who do not jump on the RFID bandwagon soon, may find themselves lagging behind their competitors in several key areas, such as inventory control and distribution, product authentication, and customer satisfaction.


Retail innovators are eager to get started using RFID technology and realize that, as with the implementation of any new idea, there is a foundation to be laid.

  • RFID requires a commitment from manufacturers and suppliers to put tags on goods.
  • RFID infrastructure takes time to install in stores.
  • RFID necessitates a strategic and purposeful allocation of resources.

Some retailers have started their RFID plan with a limited number of product categories and then expand to more categories as time and money allow. This way they will not be caught short when the “tipping point” is reached and the majority of retailers are scrambling to develop and execute RFID programs.


What can retailers gain from adopting and implementing RFID technology? Business Wire reports, “Increasing acceptance of RFID technology in the retail sector is the major trend in the market. RFID systems for retail applications are applied by the business to increase their return on investment as these systems help reduce the delivery cycle time of goods and the number of defects. RFID systems provide transparency and help streamline supply chain operations. With the help of RFID systems, retailers are able to capture the data and use inventory management software and big data solutions to identify the buying patterns of customers and form different promotional schemes to increase sales.”

Benefits of using RFID technology:

  • Accurate inventory tracking
  • Less discrepancies in inventory accounting
  • More efficient distribution
  • Reduced costs due to inaccurate accounting or delayed reporting of theft or other product loss
  • Identification of individual product items beyond their product type
  • Location of items beyond a direct sight line
  • Access of information from thousands of items simultaneously, all without manual data input or manipulation
  • Immediate access to information about the product that can be sent to inventory systems and/or manufacturers
  • Increased efficiency of operations
  • Improve asset accounting
  • Decrease reliance on manual input
  • Reduction of operations costs and supply chain inefficiencies
  • Simultaneous and continuous collection of useful data for analytics
  • Ability to identify the buying patterns of customers, online and in-store, to create targeted promotions that increase sales


Retailers are beginning to get off the proverbial fence and really start to look at implementing RFID technology. This area is expected to expand, especially with businesses that can respond nimbly to new technologies, cutting-edge innovation, consumer demands, and marketplace pressure. Technavio, the leading global technology research and advisory company, reports, “Increasing adoption of RFID technology will significantly propel the global inventory management software market in the retail sector until 2020.”

Building an RFID strategy requires accurate planning by manufacturers and retailers to address an often complex set of objectives with the goal to ultimately better serve their vendors, distributors, and consumers both in the real world and in the virtual online marketplace.