RFID Tag Introduction: The Role of RFID In New Retail Supply Chains

What is RFID tag?

RFID tags are a type of tracking system that uses smart barcodes in order to identify items. RFID is short for “radio frequency identification,” and as such, RFID tags utilize radio frequency technology. These radio waves transmit data from the tag to a reader, which then transmits the information to an RFID computer program. RFID tags are frequently used for merchandise, but they can also be used to track vehicles, pets, and even patients with Alzheimer’s disease. An RFID tag may also be called an RFID chip.

Active RFID vs. Passive RFID

Passive RFID systems use tags with no internal power source and instead are powered by the electromagnetic energy transmitted from an RFID reader. Passive RFID tags are used for applications such as access control, file tracking, race timing, supply chain management, smart labels, and more. The lower price point per tag makes employing passive RFID systems economical for many industries.

Active RFID systems use battery-powered RFID tags that continuously broadcast their own signal. Active RFID tags are commonly used as “beacons” to accurately track the real-time location of assets or in high-speed environments such as tolling. Active tags provide a much longer read range than passive tags, but they are also much more expensive.

The role of RFID in new retail supply chains

The onset of new retail trends in China and globally continues to gather pace. While the sector is driving the development of cutting-edge technologies as e-commerce players look to expand offline, it is also helping with more innovative applications of mature technologies like RFID tags.

RFID, or radio-frequency identification, refers to a technology whereby digital data is encoded in RFID tags or smart labels. The data is captured by a reader via radio waves. RFID, which has been around in its current form for the past two decades, didn’t start to make serious inroads into retail initially due to cost concerns, a lack of global standards for adoption, and risk aversion at the management level.

But the identification methods and technical characteristics of RFID is making it a better fit for the demands of the new retail sector as the accuracy of data and inventory planning are increasingly important in omnichannel retailing and the improvement of customer experiences. Retail is a powerful engine driving the rapid growth of the RFID industry in the past few years, representing around 10% of the 15 billion ultra-high frequency RFID tags globally last year.

By simulating an in-store experience, the newly established lab demonstrates an interactive digital product showcase using RFID technology. After taking the products from shelves, users can get details of the item and enjoy automated checkout. By using RFID and big data analysis tools, the solution can also optimize distribution and sales procedures. While users are shopping online, e-commerce sites analyze their purchasing preferences and then generate meaningful insights for new products or give targeted shopping recommendations. However, such data is often absent during offline purchases.

The increasing diversity of ways to shop raises requirements for supply chains. Some of the challenges we see in the retail supply chain are linked to visibility and accuracy. At the same time, providing detailed and trackable information addresses the needs of millennials and the younger generations who value knowing where their products come from. RFID is one of the key technologies that can tell you exactly where the product has been, the full provenance and everything else, which are increasingly important for the younger demographic.

QR codes and other forms of visual ID are often seen as alternatives to RFID technology. These have their place, but they require line of sight, meaning you need to see the code one by one no matter whether it’s inside a box or stacked on a shelf.

However, the two technologies are not exclusive. QR codes are now ubiquitous in China where users are accustomed to it. So you can have the RFID for supply chain optimization, and then you can have QR to interact with the consumers, who can actually connect the unique item that’s on the RFID with a QR code.

For AI to work, you to feed AI with the right and accurate data, then you can have fancy algorithms that tell you what people are likely to buy based on different factors. But if you don’t have the right data, then you start from the wrong place. And I think that’s that mindset about accurate data to allow me to have predictive analytics and use AI algorithms to help me with my strategies.

In addition to retail, technology is also finding applications in the smart home industry, hospitals, and even education as an extension of the Internet of Things trend.