Retail Industry Gives RFID Technology a Second Chance

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In 1974, one of the first barcode scanners was installed at a supermarket in Troy, Ohio and the very first product with a barcode (a 10-pack of Wrigley’s Juicy Fruit chewing gum) was scanned. By the mid-1980’s most retail stores were taking advantage of this technology and had some sort of barcode system in place. This introduced a new semi-automated process and lessened the burden of inventory management.

Around this same time, the first US patent was granted for an active RFID tag and the development of a passive tag wasn’t far behind. The tags were costly and large, mostly used for tracking high-value assets. Fast forward to 2003, Wal-Mart Stores issues a mandate that their suppliers must adopt radio-frequency identification technology. Though the mandate worked well and was easily adopted by their larger suppliers, their smaller suppliers (over 50,000 of them) had trouble with the upfront cost of investing in the technology at that time. The failed mandate scared off other retailers, as they did not see how the benefits would outweigh the risk. RFID use for inventory management in the retail industry went cold. It seems Wal-Mart was working with technology that wasn’t quite ready.

Today, RFID tags can now cost under .05 cents per tag and now can easily and effectively accommodate item level tagging. Retailers are rethinking their stance on RFID and jumping on the bandwagon, in some cases realizing inventory accuracy improvements up to 95%. Not only are they experiencing improved inventory accuracy, but also noticeable improvements in areas of sales, omni-channel strategy, gross margins, and markdowns.

Some the world’s largest retailers are adopting the solution, including: Macy’s, Target, Levi Strauss, and Japan’s AEON Retail – among many others. In fact, a 2015 report from Frost & Sullivan finds that sales of RFID readers, tags and software to the retail sector will grow to $5.409 billion in 2020, reflecting a compound annual growth rate (CAGR) of 38.9 percent.

There are now many options for retailers in regards to purchasing RFID hardware. However, the hardware will not work without a powerful software solution collecting the data. This is where the Internet of Things (IoT) becomes an important concept. The RFID scanners will transfer important data from innate objects (inventory counts, where items are located, even temperature) to a secure software solution in the cloud.

Apptricity asset and inventory tracking software solutions are the perfect backbone to any RFID system, providing real time, at-a-glance visibility from any internet-enabled device (desktop, laptop, mobile phone, and/or tablet). After gathering data, Apptricity provides its users with powerful reporting and analysis tools. This is what takes an RFID system from just improving inventory accuracy, to also improving supply chain strategy, customer satisfaction, sales, and other important aspects of any successful retail business.

Are you considering implementing an RFID solution for inventory or asset tracking? Email us at to learn how we can help you move your business onward and upward.

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