RFID is not a new technology, but the major benefits are only just starting to become reality. Since the technology was discovered cost has been a key point in its further development. With the ability to produce RFID tags in higher quantities and at a much lower cost, suppliers and retailers are beginning to invest heavily in the technology.
RFID stands for Radio Frequency Identification. It consists of an electronic component that contains a small chip and antenna. The chip is capable of storing data, which can be accessed when the device is scanned by a reader. They can be used in the same way as a barcode to store and retrieve information on products.
The benefits of RFID
This technology can be used in similar applications as barcodes, but it’s a much more efficient method of accessing data. The item doesn’t have to be as close to the reader as with a barcode; allowing products and consignments to be processed far faster. A RFID scanner could retrieve data from all the items contained in a bag without removing them.
What has slowed down the uptake of RFID?
When you understand what RFID is and the benefits it can provide for companies, you might wonder why the development of the technology has been so slow up until now. This is mainly down to the costs involved in producing the tags, which limited their use.
RFID technology has actually been around for over 50 years. In the early days it wasn’t used to its full capability because companies couldn’t afford the cost of tags if they were to be thrown away when they’d been used. This limited their use to applications where considerable cost savings could be made or in areas where they could be reused (such as within one company). Today the cost of producing the tags has been considerably reduced, making them cost effective even for one off use.
This technology is extremely beneficial for businesses and the global economy. It allows them to be more effective at tracking and supplying goods, with the use of real-time information. Retailers can now know exactly where their goods are throughout the supply chain, whether they’re in a distribution depot or on a store shelf.
This all reduces the cost to the consumer and increases the choice available. Providing exactly what customers want and when they want it is critical for retailers, especially at time sensitive periods, such as Christmas. According to data from CapgeminI, almost three quarters of customers would shop elsewhere if the product they wanted wasn’t on the store shelf. With the use of RFID tags, retailers can react quicker to customer demands and buying habits, ensuring that their outlets always have the products available when customers want them.
Industry might have been cautious on investing in RFID technology. However, with the reduction in associated costs and the potential benefits it provides, companies can now see the future impact this will have on the retail environment.