RFID tags in Retail Stores

by Tracy C
Tracy Cardoza

RFID tags in Retail Stores

Don’t you just hate going to the store and finding that the product you were looking for wasn’t on the shelf or out of stock? RFID is an aspiring technology that is being implemented in our everyday lives and is now being used to help retail stores. Companies like Wal-Mart, Macys, and Metro have begun using this technology in some of their stores and placing it on things like inventory, shipping, and individual products (Bustillo). This is saving their business money by improving the efficiency of their supply chain. Even though companies see RFID as a convenience others argue what a nuisance it could become. Retailers are only using RFID tags to keep up with customer demands.

Not many people know what RFID stands which is Radio Frequency Identification. Radio Frequency Identification can be used by making tags which contain small antennas embedded in them that allow radio waves to find them (Rfident.org). These tags can be placed anywhere you would like for example on boxes, in clothes, on ids etc. They can be mad into many different shapes and sizes as well. There are two different types of RFID tags which are passive and active tags. Passive tags can be fairly small because these do not hold an internal power source. They can only be activated when it comes in contact with an electric current. The reason why they can be so small is because they can only be used to retain small information as id number or product name (Bonsor). Active tags require an internal power source to function because they are used to hold more memory. This is why active tags are bigger and can be located from a further location. Active tags are also the ones who help Retailers the most because they return the most information and help them keep track of accuracy and reliability (Rfident.org).

Businesses that have already started using Radio Frequency Identification, for example American Apparel Inc, notice a 14.7% boost in sales in 2007 (Bustillo). This is due to the fact that companies can use the RFID tags to track every piece of inventory they own. By using the Active RFID tags they can track every piece of merchandise from when it leaves the manufacture to the time it reaches the customer. RFID tags are making it easier for companies to keep track of Real-time Inventory (Ibm.com). Instead of having to manually counting each piece of inventory form the time it enters the store, using RFID reduces the amount of labor because you’ll always have an accurate count by simply sending out a radio wave. Initially gathering all this data will improve the way business trace consumer buyer patters. They are able to know things like how long an item shelf life is, when it expires, and how well it sells at each price quicker (Rfident.org). Also they can keep track of when an item goes missing and will never have to worry about missing inventory.

As one of the largest retailers in the United States Wal-Mart is quickly trying to master the use of RFID tags. They have already started using them throughout most of their stores and has saved money on labor and product cost. This initially benefits customers because the more money Wal-mart saves, the larger the price cut will be on an item which will give them a competitive advantage over other stores (Bustillo). RFID tags are benefiting both consumers and retails because it is able to trace more accurate and detailed information about the products in the store. Retailers can keep better track of how fast items are leaving the shelves and place orders ahead of time to increase customer’s demands.

One of the main issues using RFID tags are that some customers think that because they are active tags, companies will be able to trace their product all the way to their home. This raises a privacy issue because the United States has not yet implemented a code for this fairly new technology. Many people argue the privacy issue of having RFID tags because you can simply dispose of the tags after they are purchased. The figure below shows how simple Wal-Mart keeps track of their garments (Bustillo).

In conclusion, not everyone is going to be accepting of RFID tags in Retail stores because some customers may think that gathering so much data from one product is invasive. But when we look at the great picture RFID tags will only enhance our overall shopping experience. They will help retailer meet our buying demands more accurately and efficiently.

Bonsor, Kevin and Keener, Candace.  Retrieved from http://electronics.howstuffworks.com/gadgets/high-tech-gadgets/rfid.htm

Bustillo, Miguel (2010). Wal-Mart Radio Tags to Track Clothing. Retrieved from http://online.wsj.com/article/SB10001424052748704421304575383213061198090.html

Ibm.com (2010). RFID for supply chain visibility solution from IBM. Retrieved from

http://www-01.ibm.com/software/solutions/sensors/distribution/rfid-supply-chain-visibility.html

Rfident.org (2009). RFID Tags- Radio Frequency Identification Tags. Retrieved from

http://www.rfident.org/#RFID%20in%20Wal-Mart

Rfident.org (2009). RFID Technology- Educational Video. Retrieved from http://www.rfident.org/rfidvideo.htm