Modern technology is transforming retail inventory management and item tracking

A robot equipped with RFID for an automated inventory; Copyright: DECATHLON

24.10.2023

by Jennifer Meyer

A transition is brewing in the world of retail: RFID. While by no means new, the technology is becoming a fundamental tool in the retail sector, revolutionizing the way goods are tracked, organized and sold.

Innovations often start small, sometimes quite literally. Here, it begins with a small sticker containing an electronic chip known as the RFID tag. RFID is an advanced system that can remotely read and store information from this tiny chip, even through packaging.

RFID stands for Radio-Frequency Identification. A typical RFID system consists of three main components – a chip, a reader and a database. The chip, which is part of the tag attached to or inside the product, contains data. The reader sends out radio signals that activate the RFID chip and receives the stored information. This information is then recorded in a central database and can be retrieved and analyzed in real time.

RFID – the invisible retail navigator

In retail, RFID primarily enables accurate tracking and management of every product – from manufacturing to point of sale. This improves inventory management, enables more accurate orders and optimizes the shopping experience for customers. RFID ensures that there are no bottlenecks and that the right products are available at the right time. It basically acts like an invisible pilot that coordinates everything in retail.

Rising customer expectations and an increasing pressure to digitize are currently driving the technology forward. In addition, retailers are constantly on the lookout for data sources to optimize their business processes. RFID provides them with a whole new set of information about store environments, product movements, and customer behavior.

A DECATHLON product with an RFID tag; Copyright: DECATHLON

DECATHLON: A pioneer in the use of RFID technology

A pioneer in the use of this technology is DECATHLON. The manufacturer and retailer of sports equipment and apparel has been using RFID for more than a decade. It all started in 2008 with pilot projects in France. Today, all products in all locations are RFID tagged during production.

DECATHLON reports that RFID has been instrumental in increasing product availability and improving product safety in brick-and-mortar retail. It has also sped up the checkout process, allowing staff to focus on advising and supporting customers.

But it's not just the customers who benefit. With the help of RFID technology, DECATHLON uses robots for automated inventory in selected stores. For DECATHLON's production partners, RFID facilitates monitoring and traceability of production, resulting in more efficient scheduling, better management of materials and optimized shipping. In logistics warehouses, RFID also facilitates inspections and controls.

In the future, DECATHLON plans to further explore the use of data linked to products. The hope is to design an efficient circular economy based on this data, promote a more reliable understanding of the environmental footprint of products, and facilitate recycling through easy access to composition data. In addition, DECATHLON aims to work on seamless checkout systems to further improve the shopping experience. Read on to see how this can work.

Technology innovations are revolutionizing retail, from the store to the back office, from the supply chain to the checkout – Stay in touch with developments: Find the latest solutions, an invaluable exchange with the industry and plenty of expertise at EuroCIS – The Leading Trade Fair for Retail Technology.

Computer vision sensors for RADAR technology on a ceiling; Copyright: RADAR

RADAR – the interaction of AI and RFID

Others are also working diligently on further development for the retail sector. One U.S. company that firmly believes RFID has even greater potential is a technology platform called RADAR. This combines RFID and computer vision to create merchandising technology to track and locate in-store inventory in real time with 99 percent accuracy. This opens up a whole new world in which employees always know where which product is in the store – and when it moves. That gray shirt in size M was tried on seven times by customers yesterday and still not bought? Six female customers who already had a white T-shirt in their hands looked at the black pants in aisle 3 today? Evaluations like these can now be made thanks to RADAR.

Computer vision (or machine vision) is a field of artificial intelligence that enables computers and systems to extract meaningful insights from digital images, videos, and other visual inputs.

It is therefore not surprising that self-checkout or "just walk out" is also possible with this technology combination of RFID and computer vision. Customers who have registered a payment method in the appropriate app can simply leave the store with selected goods without actively paying. This is because the RADAR system records which products have been selected even while the customer is shopping and – according to the company's promise – charges them for the goods the second they walk out the door.

McDonald's France: RFID in fast food

One of the latest application examples for RFID systems comes from France within the restaurant industry. Here, it has been prohibited to serve food in disposable packaging since January 1, 2023. A problem for fast food systems like McDonald's. The solution to this was developed in collaboration with global RFID and RF security solutions company Checkpoint Systems. And they did so by creating one of the first food-safe RFID tags that is also water and heat resistant. These tags were attached to cups, bottles, fry containers and the like, allowing the dishes to be monitored via an automated database. If, for example, a cup ends up in the trash, it can be easily located, cleaned and reused by an employee. A system that, thanks to RFID, could avoid packaging waste and make the future a little bit better.