Retailers Fight $1.7 Trillion Losses With RFID Inventory Visibility

When retailers are losing $1.7 trillion annually to inventory distortion, every mismatch in the supply chain is more than just a line item. From out-of-stocks to overstocks, these challenges erode consumer trust, disrupt operations, and damage margins. In these uncertain times for retail, one thing is clear: business as usual is no longer good enough.

To adapt, retailers must not only address current inefficiencies but also prepare for the demands of an increasingly omnichannel, just-in-time world. RFID technology is reshaping how retailers view, manage and react to their inventory in real time.

The Problem With Outdated Tracking

Many retailers still rely on barcode and QR systems, which require line-of-sight scans and involve significant manual labor. These limitations make them too slow, inconsistent, and reactive for high-volume, volatile retail environments.

Whether it’s an unexpected stockout that disrupts customer experience or surplus inventory that stagnates on shelves, poor inventory visibility compounds challenges throughout the supply chain. It’s inefficient, expensive, and leaves even the most well-intentioned retailers vulnerable to missed opportunities and dissatisfying deliveries.

Consider the customer expectation for same-day delivery or in-store pickup. Without precise, up-to-date inventory tracking, retailers risk listing items as available when they aren’t, wasting valuable time and losing customer trust.

What RFID Brings to the Table

Radio frequency identification (RFID) offers retailers real-time, automated and granular visibility into their inventory. With RFID, you can leap from a baseline inventory accuracy of 60 percent into an incredible range of 95 percent to 98 percent. Major brands are already seeing measurable gains in efficiency, sales and customer satisfaction, proving RFID’s value as a driver of retail success.

Unlike traditional tags, high-performance RFID sensors are completely battery- and maintenance-free. Passively powered through RF energy, these tags measure temperature and humidity with high accuracy, support simple location functions, and protect inventory integrity without the environmental and operational costs of disposable batteries.

Here’s how RFID addresses key retail pain points and elevates operations to a new standard of excellence:

• Near-Perfect Fulfillment Accuracy: Jumping from 63 percent order accuracy to 95 percent, RFID enables confident fulfillment, transforming omnichannel execution into a competitive advantage. No more wasted time, mis-shipped orders, or disappointed customers.
• Drastically Accelerated Cycle Counts: Instead of once-per-quarter cycle counts, RFID enables retailers to scan entire inventories weekly or even daily if needed. This leads to 96 percent reductions in counting time and better support for fast-moving inventory dynamics.
• Proactive Issue Detection: RFID provides instant visibility into stock placement, theft and miscounts. Retail teams can respond before these issues escalate into costly losses, ensuring smoother operations and stronger supply chain agility.
• Environmental and Location Monitoring: RFID tags equipped with environmental sensors can track temperature, humidity and motion while being wirelessly powered, eliminating the need for batteries or maintenance. These tags enable long-range, high-performance monitoring and, in many cases, support simple location functions such as lighting a LED to help teams quickly find items. For industries like food, pharmaceuticals, and cosmetics, this capability ensures perishable or sensitive goods remain intact throughout the supply chain, safeguarding compliance and product integrity.

How to Leverage RFID for Competitive Advantage

Feeling the pressure to adapt is one thing; implementing an actionable strategy is another. Below are tactics forward-thinking retailers can adopt to maximize their return on RFID technology.

• Enhance omnichannel visibility. Make omnichannel features like in-store pickup and endless aisle viable and seamless. High inventory accuracy means your systems can confidently display real-time product availability — even if there’s just one item left.
• Optimize labor and sustainability. Automate inventory counting and reduce overstock, cutting both labor costs and waste. RFID-enabled workflows give associates real-time insights via devices they already use, improving efficiency without adding workload. For brands with ESG commitments, the sustainability gains speak volumes.
• Integrate insights for smarter demand planning. Inventory insights derived from RFID data empower better decision-making. Retailers can accurately predict demand, adjust safety stock, and optimize shelves for profitability.

A Look Ahead

Retail is constantly evolving, and your strategy should too. RFID technology not only meets current retail demands but also prepares businesses to excel in an omnichannel world. With real-time inventory visibility, retailers can reduce out-of-stocks and overstocks, build trust, enhance the customer experience, and achieve operational resilience. RFID serves as the linchpin for better processes, higher profits, and more sustainable retailing, offering the opportunity to move beyond guesswork and outdated systems to reshape the future of retail.

Eric Biel is the director of strategic partnerships at Powercast Corporation, a pioneer in radio frequency (RF)-based long-range wireless charging technology.