Radio-frequency identification (RFID) tags have been around for decades; they are based in radar technology developed during World War II. By the 1970s, the transmitting technology was being used commercially to track objects and help loss prevention efforts of valuable items.

Today, the average cost of RFID tags has fallen by an estimated 80 percent, such that they cost only about 4 cents per tag. In parallel with its diminishing price, RFID technology has increased in accuracy and expanded its range by almost five times the distance. Therefore, retailers increasingly install the technology to tag a wide variety of goods, including liquids, metals, fragrances, and cosmetics, in support of more operations. One study suggests that 61 percent of retailers plan to use the technology by 2026.

Beyond tracking products, RFID technology also

promises an inspiring range of applications. When Macy’s uses it to track inventory overall, it gathers data from sales cycles to learn precisely how well different seasonal products fare. In turn, it can restock unexpectedly popular products more quickly, because monitoring systems linked to the RFID tags alert supply chains to shortages in real-time.

Ongoing tests of the versatility of the technology involve applying RFID tags even to ultra-low cost items. Some Walmart locations tag items in every product category, some of which cost less than 99 cents.

Such experiments and efforts have benefits for consumers too, because they ensure that RFID technology evolves to match their needs. For example, in smart fitting rooms, shoppers can receive personalized recommendations as they shop, powered by RFID tags in the clothing they are trying on. The RFID tags on Kendra Scott jewelry provide customers with more information and a customizable buying experience.

Considering these benefit to buyers and sellers alike, it behooves every actor to normalize the adoption of RFID tags. No one player can or should dictate when or how this technology will become mainstream.

Discussion Questions 

1. Which stage in the retailing supply chain seems likely to benefit most from RFID technology? Why?
2. How can RFID technology be used to create other retail activations that improve customer experiences?

Sources: Daphne Howland, “RFID Has Been Around For Decades. Now It’s Becoming Retailers’ Best Crime-Fighting Tool.,” Retail Dive, February 21, 2024; Marshall Kay, “Why An RFID Label on a 72¢ Box of Crayons Is Reason To Be Tickled Pink,” Forbes, January 5, 2025; Praveen Adhi, Tyler Harris, and Gerry Hough, “RFID’s Renaissance in Retail,” McKinsey & Company, May 7, 2021