What: Retailers are increasingly adopting Radio-Frequency Identification (RFID) technology, not just for inventory management but also as a potent tool against shrinkage and theft.

Why it is important: Retailers are increasingly adopting Radio-Frequency Identification (RFID) technology, not just for inventory management but also as a potent tool against shrinkage and theft.

Retailers are revisiting RFID technology, a system that uses radio frequencies for data transmission between a reader and a tag attached to an item. Initially used for inventory management, RFID is now being recognised for its potential in addressing shrinkage and theft, issues that have long plagued the retail sector. With 61% of retailers planning to use RFID by 2026, the technology is set to become more widespread.

RFID tags enable retailers to track inventory with high accuracy, conduct more frequent inventory counts, and identify discrepancies in real-time. Macy's, for example, has expanded its use of RFID to include "smart exits," allowing the retailer to identify theft incidents more accurately, including those involving long-time employees. This expansion into loss detection highlights RFID's potential beyond inventory management.

The technology's ability to provide detailed data on merchandise movement can also assist in law enforcement efforts against organised retail crime. By tracking stolen goods across state lines and tying them back to specific incidents, RFID can help build stronger cases for prosecution.

Despite its benefits, experts note that RFID is still underutilised in the retail industry. The technology's potential to revolutionise loss prevention and inventory management suggests that RFID could soon become essential for retailers seeking to mitigate shrinkage and theft while improving operational efficiency.

Revitalizing retail: RFID's role in combatting shrink and enhancing inventory management