RFID Technology: The Future for Retail

Radio Frequency Identification (RFID) is a technology which is used widely across many sectors.

It has a multitude of applications that bring many benefits to businesses and their customers.

In this post, we’re going to focus on how RFID is playing an important role in modernising the retail sector. We’ll explain what it is, how it works and how RFID can benefit those in the retail industry.

What is RFID?

In some ways, RFID can be seen as similar to a bar code system. However, instead of using an optical scanner to read the bars, it uses radio waves to read data from small chips, known as tags. This more advanced technology enables it to have far more applications and offer many more benefits than a bar code system is capable of.

How does RFID work?

RFID works by sending radio signals between a reader and a tag. The reader transmits a radio signal and when a tag comes within range, it receives the signal and sends feedback that enables the reader to identify it and receive other data that it contains. As each tag has its own unique code, readers can track and communicate with multiple tags at the same time.

Readers come in a variety of forms including hand-held scanners, access control door scanners and even mobile phones. Tags are small chips that can be embedded into objects such as smart cards, key fobs and sticky labels. They come in two versions: a passive tag which is powered by the radio waves sent by a reader and active tags, which have their own battery and can, therefore, operate over a longer distance.

The data collected from tags can be passed via cable or wireless (including Bluetooth) to computer systems where it can be processed, actioned and stored.

The benefits of RFID in retail

Here are some of the main advantages that RFID technology brings to the retail sector.

Asset Tracking

Asset tracking is one of the major ways that businesses use RFID. It can be used to prevent theft and track assets that are frequently moved and often misplaced. In retail stores that use trolleys, for example, it can be used to track when they leave and enter the store. This not only helps with finding out where trolleys have been left but can also help with their management. RFID can tell if too few trolleys are available for customers so that someone can go and collect them from the car park.

Supply Chain Management

RFID supply chain applications can use item-level tagging to help improve product visibility. These applications can let retailers know exactly where goods are in individual pallets and containers, giving increased control over the supply chain process.

Retailers can also use readers installed at the entrance and exit of their warehouse to read tags on shipped items and delivery vehicles. This can help make many warehousing processes much quicker and easier to undertake.

Stock Management

RFID enables retailers to have real-time stock information at their fingertips. It can do this through automated scanning of items in the warehouse and logging those which pass through checkout. Not only does this enable retailers to have better control of stock and offer improved customer service, it also reduces labour costs as there is no need for employees to physically check items.

Interactive Advertising

Retailers can use RFID for both external and in-store advertising. Tags can be placed on external advertising or in-store POS materials which interested persons can access by swiping their mobile phones above them. This can send the person information about the product they have seen advertised or open up a web page on their browser. It can be used to send detailed product specs, stock availability info, or give them a discount voucher to use in store.

Cashless Payments

By utilising payment wallets on mobile phones, retailers can use RFID to shorten queues and speed up the checkout process. At the same time, you can eradicate losses which arise because of handling cash and dispense with tallying up cash payments.

Automated Checkouts

One of the most exciting applications of RFID is the automated checkout process. By tagging products with NFC stickers, like those from Universal Smart Cards, customers can log their purchase by swiping the item using an app on their mobile phone. Instead of needing to pay at the checkout, they can pay automatically on their phone via their payment wallet (e.g. Google Wallet or Apple Pay).

Another alternative is to use tunnel readers. Using this method, when the shopper gets to the checkout, all the items in the basket are scanned instantly when the basket passes through the checkout tunnel. To pay, they simply need to swipe their card or mobile phone on the checkout reader.

What’s more, customers who are part of a loyalty programme can still pick up points as they purchase and redeem vouchers or discount codes.


RFID can be used for two security purposes: access control and protection against theft. For access control, RFID devices such as smart cards, fobs and wristbands can be used as electronic keys. As each individual can be given access to different areas, it means that you can control not only who can enter but also where different employees may and may not go. In cases of emergency, these tags can also be used to locate members of staff who are in the building so that emergency services know where to find them.

With regards to theft, both stock and company equipment can be tagged. This means that if anyone takes an item out of the building without permission or which is not paid for, scanners on the exits can set off an alarm.

Wrapping up

RFID systems have a lot to offer retailers. They can identify every product in-store with a unique identifying number; they reduce the need for human resources and eradicate human error by automating processes; they enable simultaneous product scanning; offer real-time stock information; provide new ways of advertising; and increase security for staff, equipment and stock.

In addition, RFID works with modern technologies, such as smartphones, apps and computer systems; it’s inexpensive to implement; and new ways of using it are being introduced all the time. With all these benefits, it’s understandable why this technology is being widely adopted across the retail sector.