For over a decade, RFID has been the most important technology in wireless and radio frequency identification and tracking. Similarly, IoT (Internet of Things) has become crucial for sensing applications. Data is power and technologies that facilitate automatic, wireless data capture will see further demand in 2025.
RFID technology has become the go-to choice for businesses in retail, healthcare, and supply chain for track-and-trace applications, and various factors make it so. With its ability to wirelessly identify and track objects, RFID offers several advantages that make it a compelling choice for organizations across various sectors.
Factors that make RFID an attractive choice for businesses
RFID, short for radio frequency identification, is a radio frequency-based, wireless data capture technology that uses RFID tags and readers and a software system to automatically capture data and generate insights. The use of radio frequency waves allows RFID to identify RFID-tagged assets without a clear line of sight, which is not possible at all with barcode, the traditional labeling technology.
Let’s take a look at some of the factors that make RFID an attractive choice for businesses in retail, healthcare, supply chain logistics, etc.
1.RFID is cost-effective
2. Wireless identification and tracking
3. Accuracy in data capturing
4. Highly scalable
5. Matured and reliable technology
6. IoT connectivity
7. Versatile and easy to deploy
1.RFID is cost-effective
One of the most important factors that make RFID an attractive choice for retail and other businesses is the fact that it is cost-effective. While the initial investment in RFID infrastructure—including tags, readers, and software—can be significant, the long-term savings and efficiencies gained often justify the expense. RFID systems reduce labor costs by automating inventory management processes and minimizing the time spent on manual stock counts and tracking.
An RFID label hardly costs 40-50 cents (INR 3-4) and retailers can easily tag millions of items without worrying about the cost. In comparison to various other data capture, identification, and sensing technologies, RFID tags can be battery-less, small in size, and highly cost-effective. Similarly, RFID scanners are also cost-effective and available in various categories, fixed and handheld. The price of RFID readers can vary, starting from 100 USD (INR 8k) to 1500 USD ( INR 1.3 lakh) and more depending on the features and brand of the product. Moreover, the improved accuracy and real-time visibility into inventory help reduce stockouts and overstock situations, ultimately lowering carrying costs.
2. Wireless identification and tracking
RFID technology provides wireless identification and tracking. Using electromagnetic fields, RFID tags, and readers can capture product identification wirelessly, a tracking solution that eliminates the need for line-of-sight scanning, a limitation often associated with traditional barcode systems.
UHF RFID tags attached to items in retail and healthcare, etc. can be read from a distance, allowing for the simultaneous scanning of multiple items without requiring direct access. For dense environments where large volume scanning is required, RFID readers come with DRM (Dense Reader Mode) to overcome interference issues and offer great efficiency.
The ability to quickly and accurately track assets or inventory enhances supply chain visibility, enabling businesses to make informed decisions promptly.
3. Accuracy in Data Capturing
Accuracy in data capturing is another significant advantage of RFID technology. RFID systems minimize human error associated with manual data entry and barcode scanning. The automated nature of RFID ensures that data is captured consistently and reliably, leading to improved inventory accuracy. RFID offers precision in data capturing which enables businesses to maintain optimal stock levels, streamline order fulfillment processes, and enhance customer satisfaction by reducing discrepancies between inventory records and actual stock levels.
4. RFID Technology is Highly Scalable
RFID systems are highly scalable and suitable for small, medium and large firms. Companies can start with a small implementation and gradually expand the system as their needs grow. The scalability allows businesses to adapt their RFID solutions to changing operational requirements without significant disruptions or additional investments. Whether a company operates across a single location or a global supply chain, RFID technology can be tailored to meet specific demands, making it a flexible option for a wide range of industries.
6. RFID is a Matured and Reliable Technology
RFID technology has matured significantly over the years, evolving into a reliable and robust solution for businesses. The RFID market size stood at USD 14.18B in 2023 globally and is set to increase rapidly, from USD 15.86B in 2024 to approximately USD 48.51B by the end of 2034. With extensive research and development, RFID has become a proven technology with established, uniform RFID standards and protocols with firms such as EPCglobal and ISO. The reliability of RFID systems has been demonstrated in various applications, from retail inventory management to asset tracking in healthcare and manufacturing.
7. RFID offers IoT Connectivity
As the Internet of Things (IoT) continues to transform business operations, RFID technology plays a crucial role in enhancing IoT connectivity. RFID tags and readers can be integrated with IoT with MQTT protocol offering real-time data exchange and insights. IoT connectivity provides businesses with valuable insights into asset utilization, location tracking, and inventory levels. Businesses in retail and healthcare can leverage RFID in conjunction with IoT and optimize their operations, improve decision-making, and enhance overall efficiency.
8. Versatile and Easy to Deploy
RFID technology is known for its versatility and ease of deployment. RFID systems can be implemented in various environments, from warehouses and distribution centers to retail stores and manufacturing facilities. Walmart started with RFID implementation in the early 2000s, requiring its suppliers to tag items and packages with RFID labels, and extended the same mandate in 2022 to most of its suppliers and stores.
The installation process is relatively straightforward, and businesses can customize their RFID solutions to fit their specific needs. RFID tags come in different forms—such as passive, active, and semi-passive—allowing companies to select the most suitable option based on their operational requirements. UHF RFID tags are available in labels and hard tags to meet various requirements in retail and manufacturing. RFID readers are available in handhelds, handheld SLEDs, and fixed and integrated readers to cater to versatile use cases.
To summarize, RFID technology presents numerous advantages that make it an attractive choice for businesses in 2025, seeking to enhance their operations. Its cost-effectiveness, wireless identification and tracking capabilities, accuracy in data capturing, scalability, reliability, IoT connectivity, and versatility contribute to its growing adoption across various industries.
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