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 Technology

In the retail industry, which is fast-moving, the efficient inventory management and product tracking are
the key to keeping the operational efficiency at the highest level, to minimize the losses and to satisfy
the customers. RFID (Radio Frequency Identification) technology has revolutionized the retail sector by
offering a more rapid and flexible solution compared to other systems. This includes monitoring the flow
of products and acquiring real-time information on product movements. This essay intends to discuss
two kinds of the RIFD tags, evaluate which is the more effective one for retailers to track their products,
and determine the cost aspects connected to RFID technology.

The two types of RFID tags include passive and active tags. These tags are different from each other in
that they have their own advantages and disadvantages and therefore it is vital for the retailers to
consider their specific requirements and cost considerations when implementing this technology (Zhan
et al., 2020). The most popular kind of RFID tags is using passive ones, especially in retail industry.
Unlike the active RFID tags which are enabled by an internal power source, passive RFID tags are
powered by the RFID reader, in itself, providing both energy and transmitting data (Khalid et al.,
2021). Passive tags are usually cheap, small, and lightweight, which makes them perfect for tagging
individual items or product packaging. The merits of radio frequency identification passive tags include
low price, long lifespan and the read distance that vary from short ranges to medium ranges based on
the frequency used. Meanwhile, they have much less read range in comparison with active tags and are
unable to work in a standalone mode because they are awake only in the presence of a reader.

On the contrary, active RFID tags contain an internal battery that supplies power to their circuitry and
allows them to transmit data continuously or at certain time intervals (Zhan et al., 2020). These
certification tags even have a longer read range that could go up to hundreds of meters and can also
communicate with readers even when they are obstructed by physical barriers or in difficult
environments. The active tags are relatively expensive due to their enhanced and reliable functionality
compared to the function of a passive tag. They can be used for this purpose to identify high-value
assets, monitor critical environmental conditions, or track products in complex supply chains, where
readability of these tags over long distances is crucial.

The selection between active and passive RFID tags may vary towards the retailers’ particular needs and
application purposes. Most retail applications use passive RFID tags that are more effective and cost-
efficient in tracking individual products or inventory management within a store or distribution center
(Kerr & Orr, 2020). The low cost and the ability to be read in bulk make them ideal for vast
deployment and automating the inventory process. But for high-value or sensitive products, where
continuous monitoring or tracking across long distances is required, active RFID tags are the most
suitable solution. These tags can give the real-time location data that retailers can use to monitor the
movement of goods through the supply chain and prevent losses or theft.

The price tag of RFID technology is an essential aspect for retailers. With active RFID tags being very
cheap, less than a dollar per tag and considering also the cost of the reader, antenna, software, and
implementation charges, the overall cost of RFID goes up (Zhan et al., 2020). Active RFID tags, on the
contrary, can cost several dollars or more per tag, besides the infrastructure and maintenance costs that
are associated with their battery life and data management (Khang et al., 2023). Along with other cost
factors, such as system integration, employee training and process improvement, RFID technology also
requires to be taken into consideration. Retailers take a keen look at the internal rate of return (IRR) and
additional benefits including better inventory accuracy, less labor costs, and improved customer
experiences in order to compensate for the initial and continual costs of RFID implementation.

In summary, RFID technology has a lot of advantages for retailers in terms of inventory management,
supply chain visibility, and operational efficiency. It is the responsibility of the retailer to choose
between the two types of RFID tag based on the specifications such as the products attributes and the
cost implications. Contrary to the passive ones, active ones are more expensive and are deployed in the
cases when long-range tracking and continuous monitoring of a product is required. Ultimately a
comprehensive cost-benefit analysis and a well-considered evaluation of the retailer's needs are the key
to finding the most appropriate and cost-effective RFID solution.
 References

Kerr, A., & Orr, A. (2020). IoT-Based Inventory Tracking in the Pharmaceutical Industry.

https://dspace.mit.edu/bitstream/handle/1721.1/126490/scm2020-orr-IoT-based-inventory-

tracking-in-the-pharmaceutical-industry-capstone.pdf?sequence=1&isAllowed=y

Khalid, N., Mirzavand, R., & Iyer, A. K. (2021). A survey on battery-less RFID-based wireless sensors.

Micromachines, 12(7), 819. https://doi.org/10.3390/mi12070819

Khang, A., Misra, A., Gupta, S. K., & Shah, V. (Eds.). (2023). AI-Aided IoT Technologies and Applications

for Smart Business and Production. CRC Press.

Zhang, J., Periaswamy, S. C., Mao, S., & Patton, J. (2020). Standards for passive UHF RFID. GetMobile:

Mobile Computing and Communications, 23(3), 10-15.

https://par.nsf.gov/servlets/purl/10176775