RFID in Retail: Benefits for Retailers and Customers


Utilising RFID in retail organisations can present a wealth of benefits, not just for retailers, but for customers too.

RFID (Radio Frequency Identification) technology has been in existence since the 1940s. However, it’s only in the last couple of decades that it’s had a noticeable presence in the UK retail industry.

Retailers, Marks and Spencer, were among the early UK adopters of RFID back in 2001 and still use the technology today. The company recently took part, along with nine other leading retailers, in a research project called ‘Measuring the Impact of RFID in Retailing’. The results of the associated case studies suggest that retailers can boost their sales by up to 5.5% using RFID. It also showed a reduction in stock holding, lost and stolen inventory, and staff costs.

Major retail companies who used RFID in retail operations saw instant improvements

So, RFID in retail can have a positive impact on sales, and when we break down the benefits it’s not hard to see why. More and more retailers are beginning to see the potential that RFID offers, and it goes beyond effective asset tracking.

Using RFID for Tracking Assets

If you’ve already done some research into RFID for asset tracking, you’ll probably know how it works. In simple terms, it’s a tracking technology that uses radio waves to read and transfer data from small chips (RFID tags) to a reader. A reader might be a mobile device, a hand-held scanner or even an access control door scanner.

By tagging products with RFID tags, you can automatically track your inventory and stock levels while also minimising the risk of loss and theft. In a retail environment, you can use RFID asset tracking for individual products on shelves or other moveable assets such as trolleys and baskets.

A device can scan multiple RFID tags from around 20 feet away, meaning that a direct line of sight isn’t necessarily needed.

Using RFID for Better Supply Chain Management

RFID tracking can also be used to improve product visibility in the supply chain, from manufacture to distribution, to the warehouse, to the sales floor.

RFID allows retailers to understand whether their products are stored on a pallet, in a container, or are on their way to the store. This gives retailers greater control over the supply chain process.

Can RFID Minimise Out-of-Stock Situations and Boosts Inventory Accuracy?

Using RFID, retail staff can scan hundreds of tags at the same time, enabling them to check stock levels quickly and replenish shelves when needed. Being able to have shelves full consistently helps to meet customer expectations and improves the shopping experience.

RFID in retail also improves inventory accuracy. In the same research referenced earlier in this article, the companies included in the case study went from 65-75% to 93-99% inventory accuracy by using RFID.

The clothes retailer, River Island, went from 70% stock accuracy to 98% after implementing RFID technology. In turn, they have seen a significant boost in sales and are now able to ensure the most popular product lines are always in stock.

By having more accurate knowledge of inventory, retailers can successfully implement an omnichannel retail approach in line with customer expectations. The shoppers of today expect to be able to order products online and collect them from a store the following day if they want to.

Retail Asset Tracking before and after RFID adoption

80% of consumers say they’re less likely to visit a store if the retailer’s website doesn’t provide current stock availability. RFID technologies support omnichannel shopping trends by ensuring that stock quantities are updated instantly so that customers in-store and online aren’t left disappointed.

Implementing RFID in Retail to Improve Shopping Experiences

One of the most exciting and innovative developments in the use of RFID is its potential for changing the way customers browse and shop for products. An example is interactive mirrors and fitting rooms. These can recognise products through RFID tags, which sync with available stock in store.

Interactive shopping experiences like this provide customers with a more memorable and personal connection to a product. As well as helping retailers to differentiate their brand and products from competitors in the same space.

To better improve your overall customer service experience, it’s worth checking out the benefits of a help desk software solution.

RFID in Retail; Unexplored Potential

Imagine going into a store, adding items to your shopping trolly and then walking straight out the door. In fact, it’s already happening with a service called Amazon Go.

The concept behind Amazon Go is all about reducing checkout queues and shortening the POS (Point-of-Sale) process. Some retailers, like Tesco, are now using ‘scan as you shop’ technologies to try to reduce checkout friction. Thus making the experience more seamless for customers.

While Tesco uses straightforward barcode scanning technology for this service, which requires the shopper to scan items one by one, RFID could be a game-changer in the way ‘scan and shop’ works.

One retail expert believes that Marks & Spencer could potentially create a system where customers can pick up RFID tagged clothing, pay via their phone, and leave the store. RFID would effectively be able to ‘see’ what the shopper has in their basket without the need for individual scanning.

RFID is widely considered to be the chosen technology to further develop a new era of retail; one which enhances the checkout experience and improves overall retail operations.

Getting Started with RFID in Retail

RFID can provide several immediate benefits to both retailers and customers, as well as the promise of exciting technological advancements in the years to come.

If you’re planning to pilot RFID in retail, you might already be evaluating different suppliers. You may also be working out which RFID tags and readers you may want to use. But it’s essential to consider the long-term goals of your RFID project to ensure the best Return on Investment.

The type of RFID solution you choose will largely depend on the kind of products you sell. It will also depend on what problems you’re hoping to solve.

For example, are you looking for a solution for asset tracking and inventory management? DO you want greater visibility over the supply chain process? Or are you focused on loss prevention and theft?

By using our Comparesoft questionnaire, you can find the right retail asset tracking software that matches your business needs. All we need is a bit of information regarding your retail assets and how you plan to track them. We can then compile a list of suitors that you can shortlist and compare against each other.

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