Radio frequency identification, or RFID, is a new tracking technology that involves small tags that emit distinct signals. Retail business owners can use remote scanners to read RFID tags placed on individual products, enabling them to record a variety of information, including quantities of various stock items and their precise locations.

Consumer Research

RFID tags carry unique product numbers. If consumers pay for goods with a credit, debit or shopper’s discount card, retailers can link the purchases to the recorded RFID data and use that marketing information to map out individual consumers’ movements through a store. This sort of data can help a retail store make improvements, for example, by helping to optimize a store’s layout to match typical consumer behaviors.

Inventory Tracking

Suppose a grocery store wants to inventory its goods. Manually scanning bar codes or counting products is resource-intensive: workers must move aisle to aisle, tabulating items individually. In contrast, RFID scanners can read tags as far away as 20 feet and record hundreds of tags per second, meaning employees can quickly scan shelves to record quantities and locations. Some stores find it cost-effective to install permanent RFID scanners to provide real-time monitoring of stock. The greater efficiency helps marketers ensure that products are always in sufficient supply to meet consumer demand.

Security

Shoplifting is a serious concern for retail store owners. One option is to direct staff to watch customers closely, but this approach has two major disadvantages: the extra work distracts staff from other responsibilities, and customers hate being watched. RFID technology offers an elegant solution: a remote scan of shoppers as they leave your store can reveal if they are leaving with stolen merchandise. As the cost of RFID technology decreases, this security solution becomes an increasingly cost-effective way of decreasing theft.

Considerations

Your customers might not like you scanning their shopping carts or persons remotely or that you can track their movements throughout a store. RFID technology is still in its growing stages at publication date, so it is not yet clear on which side of the fence consumer opinion will land. For now, retailers should recognize that privacy issues are a growing concern.