How RFID Tracking Is Changing The Face Of Retail Inventory Management


In the contemporary world of inventory management, RFID asset tracking has garnered immense importance for enhancing efficiency, reducing costs, and minimising challenges. Business communities across the world are convinced about the technology of RFID and its enormous potentiality that can take their businesses to the next level. This is the reason Radio Frequency Identification technology or popularly known as RFID has drawn a lot of attention from the business sector both in retail and wholesale as well as at the level of manufacturing.

RFID is an advanced technology that effectively streamlines the inventory management system so that all the items can be easily tracked, and get visibility throughout the processes of the supply chain. The technology is controlled and regulated by radio waves that function through an efficient communication system between a tag on the item and the RFID reader. As every individual item is accurately tracked and traced in the entire processes of transportation, warehouses and even at the user level, RFID inventory management is the most appropriate system, especially for the retail industry.

How Does The RFID Technology Function?

There are different types of inventory tracking systems that have been traditionally at the place since time immemorial. For example, the barcode system which is still used universally requires the line of sight for scanning and helps in the payment system. These tracking systems are long outdated especially when RFID evolved. RFID does not require the line of sight nor needs a lot of time for tracking and rendering information.

RFID is the latest and advanced technology that provides accurate, up-to-date, and detailed information, visibility, and control instantly to the retailers as well as to other stakeholders. The RFID technology is incorporated with a high-quality scanner that functions through radio waves and transmits information to the RFID tags. The tags that are attached to the items contain microchips that allow the reader to read the data and other information. The microchips also write the data and information to the tags for instant updating in real-time.

The tags can be attached or fixed on various types of surfaces on the items and are wrapped in durable materials like paper or plastic for safety and protection. Almost all the tags used in the RFID tracking system are passive tags which means they do not depend upon or do not run by batteries. In fact, the tags of the RFID technology are powered and run by the waves transmitted by the readers. The active tags are usually attached to machinery like railway cars and trucks for long-range tracking and are expensive. On the other hand, the RFID passive tags as well as the readers are cost-effective and affordable and are functional in any adverse situations. It can further trace and track the items anywhere irrespective of any weather conditions.

The RFID readers are connected through a network and can be portable or attached permanently. The RFID technology used electromagnetic fields to trace and track the tags that are attached to the items. The process of the RFID transmission system begins when the RFID reader triggers the tag with an electromagnetic interrogation pulse. The tag then gets powered and transmits the inventory number back to the reader.

Advantages Of RFID Tracking System In Retail Inventory Management

The RFID technology is faster than any other tracing and tracking mechanism in the contemporary inventory management system. This helps the retailer meet the expectations of the customers in terms of faster and more convenient fulfilment of services. Besides this, the RFID technology drastically reduces human resources in inventory management and thus incredibly minimises the cost and benefits the retailers. Following are a few remarkable advantages of the RFID technology that have the potential of helping retailers take their business to the next level.

  • Quick Scanning And Enhanced Visibility:

    The RFID tracking system does not rely on line-of-sight for scanning like that of the barcode system. Its radio wave reader and RFID tags scan and process the inventory from a distance without the line of sight. This mechanism of the technology makes the process faster and more accurate. The technology also allows the system to read the information in any orientation and thus you get frequent updates and location details of your inventory. This eventually enables you to serve the needs of your customers in time resulting in enhanced customer satisfaction and taking your retail business to the next level.

  • Incredibly Reduced Cost Of Labor:

    The RFID technology does not rely upon human resource engagement leading to a drastic reduction of the labour cost in your inventory management. It reduces the labour cost incredibly by 50 to 80% in the entire inventory management processes that include inventory check-in, shipment verification, counting, etc. These all activities are performed by the RFID technology within a wink. Therefore, you may not require to assign these activities to your employees to allow human errors as RFID performs them accurately faster. So, you saved money which you can invest in other progressive efforts and enhance your retail business.

  • Sustainability:

    Retaining the existing customer base is more important than anything else in a retail business. RFID technology accurately tracks the inventory from the source to the destination or the doorstep of the users. So, when you come to know that a certain customer is just a few yards from your distribution centre it is a waste of time, money, and energy to send the packet from your distribution centre. So you arrange to deliver the packet from the nearest store and enhance the customer relation fulfilling the customer expectation before time. This goes a long way in terms of sustaining the customer base of your retail business.


RFID Readers and tags are marvellous for the transformation of your retail business but it requires an abundant infrastructure in terms of the inventory management system, tags, readers, building wiring, network, etc. to set up. However, every new attempt has an initial one-time investment and you need to do this at any cost. So, be prepared for this.



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