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The year 2024 is bestowed in terms of retail sales according to industry calculations. However, the businesses worldwide didn’t achieve the expected goal due to many economic factors. Among them, one is inefficient inventory management, from stocking to tracking of inventory. This issue gets a solution with the help of radio frequency identification (RFID) technology. 

RFID inventory solutions help retailers properly and efficiently manage their inventory and solve problems associated with traditional methods of stock management. Due to low-profit margins, retailers always prioritize efficiency in inventory management. Their main aim is to reduce product loss, which occurs mostly due to theft, shelf life, shrinkage, overstocking, etc. 

With the help of RFID solutions, retailers are able to manage their inventory and minimize their product loss. That’s not all; RFID technology has many other benefits to offer the retail business. So, let’s read how RFID technology enhances year-end inventory efficiency in logistics and retail. 

What is RFID Technology?

RFID is a Radio Frequency Identification technology that is a type of wireless communication. It uses radio waves to uniquely identify and track any tagged product, object, animal, or even person. The entire process of identification requires no physical contact, and tracking is achievable from a long distance. RFID solutions have many use cases and are widely integrated into various industries, especially in warehouse inventory management projects. 

Components of RFID

The RFID inventory technology system has 3 components, which are

• RFID Tag: An RFID tag is a unique tag given to each product for a tracking purpose. These tags have transponders and they store and transmit information about the tagged item. RFID tags can be readable from different ranges, which depend upon some factors like the type of tag and reader, RFID frequency, disruption caused by the environment and other tags and readers. Highly strong power-sourced tags are readable from long distances as they have a longer read range. 

• RFID Readers: These are hardware devices that include both a scanning antenna and a transceiver. These RFID readers or interrogators send and receive signals from the tag and show the data of a tag like its location. The RFID software stores this data for further use like analysis. You will get the following types of RFID readers in the market.

• Integrated RFID Reader

• Fixed RFID Reader

• UHF Gate Reader

• RFID Handheld Reader

• Third is the software, which is important for storing and analyzing RFID data. The software first encodes the RFID tags, collects the information and stores it for analysis purposes.

When it comes to RFID functioning, first the RFID tag is given to a product. Then, a network-connected device means an RFID reader is used to activate this tag. RFID reader uses radio waves to transmit the signal, which ultimately activates the item tag. The tag then sends waves back which the scanner antenna receives, translates into data, and stores in the software for further analysis.

Why Should You Need RFID Technology 

When we discuss the flaws in traditional retail and logistics warehousing management, there is a list of chalanges that enterprises have to face still without getting much betterment in terms of efficiency and cost reduction. 

In a traditional method, the identification and recording of items is manual, which is a laborious task and consumes time, effort, and money. Despite all efforts, the results still contain errors in inventory data and results in inventory-management and supply chain management issues. 

Due to this, enterprises face a stock shortage of in-demand products, which affects customer relationships badly. According to Adobe reports, various online retailers overall received 60 billion complaints regarding out of stock products between March 2020 and February 2022. 

The traditional method of inventory storage requires labor and material resources, which in turn affects the inventory decisions. Without proper management, the tracking of goods is another big issue because there is no way to track the status and location of products in real-time. 

This creates problems in customer relationships and also increases the loss, theft, and damage risks. The issue gets further enhanced due to the lack of data support, which causes great loss to enterprises in terms of money and retail business. 

To compete strongly with all these issues and achieve success in a retail business, the companies require something that brings efficiency, speed, and accuracy in inventory management and supply chain management. This is where the world understands the importance of RFID inventory technology.

Cost of RFID Technology

Initially, the prices of RFID Readers / Hardware were high as they followed the computer hardware price trends. However, within the previous seven years, the prices dropped by 50%. This reduction in price allows businesses to integrate RFID solution technology into their inventory management process. 

Older RFID systems offered data updates once a month, but new technologies now deliver real-time insights, often paired with time-stamped video. At the NRF conference, some retailers shared that they achieved 99% inventory accuracy and saw system payback within a year, even across large chains. 

According to Accenture, 93% of North American retailers use RFID, with those fully adopting it reporting a 10% ROI in 2021, up from 9.2% in 2019. Additionally, RFID's role in reducing out-of-stock items has helped some retailers boost revenue by up to 2.5%.

How RFID Technology Enhances Year-End Inventory Efficiency in Logistics and Retail

RFID technology is enhancing year-end inventory management in logistics and retail by automating processes, enhancing accuracy, and providing real-time insights. Here's how:

• Speed: RFID tags are quickly readable, even from a distance. So, there is no need for manual scanning of barcodes one by one. Thus, helps in speeding up the process of inventory counting.

• Accuracy: RFID readers can capture data from multiple tags simultaneously. This automation reduces human error and ensures accurate inventory counts.

• Tracking: RFID allows real-time tracking of inventory movement throughout the supply chain, from receiving goods to shipping and everything in between.

• Reduced Stockouts: Real-time data helps businesses identify low stock levels. Through this, they timely reorder and prevent stockouts that can disrupt sales and customer satisfaction.

• Faster Order Fulfillment: Accurate inventory data streamlines order picking and packing processes, leading to faster order fulfillment and improved customer service.

• Reduced Labor Costs: By automating inventory tasks, businesses no longer require manual labor, which leads to cost savings.

• Reduced Loss: RFID can help track high-value items and prevent theft or loss within the supply chain.

• Counterfeit Detection: RFID tags can be used to authenticate products and combat counterfeiting.

• Analytics: RFID data can be analyzed to identify business trends, optimize inventory levels, and make informed decisions about procurement, pricing, and promotions.

Benefits of RFID Technology

With RFID, the business gets the following benefits in logistics and retail.

• Reduce manual operations in all repetitive tasks

• Real-time tracking of the goods' status and location

• Reduce errors and offer accurate and reliable data, which save businesses from over and under-stocking and also efficiently optimize space for goods. 

• Enhances efficiency at all points, from stock management to logistics. 

• An efficient management process improves the enterprise's bottom line, which directly means happier shareholders.

• RFID technology helps businesses to keep their stock full by providing accurate results. When the customers find their required products on time, this enhances customer loyalty and customer satisfaction rates. 

• RFID solution offers real-time inventory data updates and helps businesses in their data-driven decision for refined logistics warehousing management.

• Helps in automating inventory management and monitoring which reduces operational cost. 

Conclusion

By bringing efficiency in inventory management to logistics, RFID inventory technology helps businesses achieve their set goals efficiently. With the help of an RFID solution, businesses get higher ROI and customer satisfaction with minimum product loss and operational costs. Overall, RFID technology has now become the biggest need of the hour for the efficient working of any retail business.