What retailers need to know about RFID technology

RFID (radio-frequency identification) technology has taken the business world by storm, especially in the retail world where it enables companies to improve efficiency, increase sales and provide better customer service. If you’re thinking about implementing this productivity-enhancing technology in your retail business, here are some things you need to know.

How it works
RFID technology works much like barcodes and magnetic strips, except that it uses a small electronic device to store and send unique identifying information for individual items. It also uses radio frequency, rather than lasers or magnetic particles, to transfer the information.

An RFID system consists of three components – an RFID tag (or smart label), an antenna, and an RFID reader, which is sometimes call an interrogator. The RFID tag contains a small chip that holds an integrated circuit and the antenna. When the RFID antenna detects an activation signal from an RFID reader, it activates the RFID tag, which then transmits the information to the reader via the antenna.

Benefits of RFID technology

RFID scanning offers many advantages over standard barcode technology, including:

  • Ease of use. Unlike barcoding, a RFID device doesn’t have to be positioned close to the RDIF reader. Users can read RFID devices from several feet away, and up to 20 feet with high-frequency devices.
  • No batteries required. RFID tags have their own power source, which eliminates the need for batteries.
  • Read/write capabilities. An RFID reader can communicate with the RFID tag, allowing users to change information on the tag. Once imprinted on the product, bar codes can’t be changed.
  • Speed and quantity. RFID readers can read multiple items in one scan rather than one item at a time. They typically scan in less than 100 milliseconds, much faster than bar codes.
  • Durability. RFID tags can be implanted within the product rather than just on the outside. This extends the life of the device for up to 10 years.

As with any technology, RFID comes with some downsides. It costs significantly more than bar coding, although pricing has come down over the last few years. It can also suffer from reader and tag “collisions”. These occur when multiple tags are positioned in a small area, making it difficult for the reader to respond to the different queries. This problem can be overcome by using a RFID system that scans one item at a time.

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RFID considerations for retailers

In the retail environment, RFID technology can improve sales and operations in many different ways.

  • Faster inventory counts. When conducting physical inventories, bar codes can only scan one item at a time. RFID devices can read multiple items at the same time, dramatically reducing the time required to complete the inventory. RFID also improves inventory accuracy, allowing you to optimize reorder cycles to reduce out-of-stock items.
  • Improved customer satisfaction. Retail customers often shop online and then go into the store to purchase the item. RFID technology lets you know exactly what you have in inventory so you can keep your web site up to date when something is out of stock. That way customers won’t be disappointed when they come into the store and discover you don’t have what they want.
  • Faster checkout. RFID allows you to scan faster and more efficiently to reduce customer wait times in the checkout line. Moreover, retailers are just beginning to explore all the different ways to use the technology. For example, grocery store customers could put all their items in a bag, and the checkout clerk could read all the prices in one scan.
  • Competitive advantage. Although retailers haven’t adopted RFID technology as quickly as manufacturers and other B2B companies, they are starting to catch on. With more and more retailers adopting RFID every day, you may find yourself at a competitive disadvantage without it.

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Despite these advantages, RFID isn’t the right choice for every business. If it seems like a good fit for your business, keep in mind that for any new technology to succeed, employees must be willing to use it. People are often leery of new technology – especially when it replaces existing technology they are familiar with and works well – so it’s important to show how it will make their jobs easier and better.

Also, take into account the time it will take to implement an RFID system. Depending on the size of your business and how you plan to use the system, an off-the-shelf RFID product can be deployed in as little as a few weeks, while a custom system can take up to a year.

To get the right RFID for your retail business, do your homework, choose a reliable RFID product, and start enjoying the many benefits of this fast-growing technology.

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Karin Jakovljevic

Karin Jakovljevic

Karin Jakovljevic is the head of marketing at Ximble, a powerful, cloud-based workforce management system, simplifying employee scheduling and time tracking for retailers, restaurants and small businesses.