Radio Frequency Identification (RFID) technology enables a microchip to send digital messages over radio waves, allowing products to be tracked from raw material production through shipping and retail sales.
RFID tag has many advantages for brands. From out-of-stock reduction, shrink reduction, and inventory accuracy to aesthetic considerations, RFID has proven itself a worthwhile solution. One challenge retailers typically face when integrating RFID tags is their appearance within packaging or label designs. However, thanks to advancements in technology over the years, designers now have smaller, more discreet tags that integrate seamlessly into packaging designs.
An RFID tag (also referred to as a smart label or RFID chip) consists of an antenna, a microchip, and a circuit, also known as a transponder, all connected by wire. When an RFID reader transmits a signal, the tag's circuit activates and responds with data, much like remote controls respond when someone presses their button. All this data can then be stored on its microchip, which can later be retrieved using software programs designed specifically for RFID use.
There are two primary categories of RFID tags, passive and active. Passive tags require no battery power to function; they only activate when they are close to an RFID reader, making them a cost-effective tracking solution. Active tags feature onboard batteries for powering them and can store more data than passive models.
RFID relies on both technology and reader systems for its success, with both elements playing their respective roles to ensure the maximum utilisation of this medium. While initially expensive due to their complex designs, which incorporate multiple frequencies and one tag-at-a-time reading capabilities, multi-read capable readers now cost under $10,000, making them accessible and affordable to most businesses.
RFID readers contain an antenna that is tuned to the specific frequency of an RFID tag, causing its signals to reflect off its microchip and activate it. Once activated, readers process these reflected peaks to determine what information is stored within a tag; for instance, one could program their tag with serial numbers that translate into electronic messages when read by readers.
Retail is an ideal market for RFID tags, as they enable products to be tracked from the moment they're first labelled to the point of sale. Thanks to this technology, products can be automatically scanned as they enter a store allowing staff members to quickly locate what they're searching for while decreasing out-of-stock In addition, RFID tags serve as anti-theft devices by activating only at checkouts where an alarm will sound if someone attempts to leave without paying; this acts as an effective deterrent against shoplifting and theft in stores.