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Chipless RFID and Retail: Item-level Tagging

  • Abhishek Shukla
  • Jul 31, 2023
  • RFID
Chipless RFID and Retail

“The Chipless RFID market size, in 2023 is valued at 1176.7m USD and expected to reach 6660.6m by 2030, growing at a CAGR of 28.1% during the forecast period.”

Retail businesses are going through tremendous changes not only in India but globally. While we witnessed how pandemic caused many retail businesses to shut their operations for the multifaceted reasons such as supply chain disruptions, govt. mandated lockdowns in most countries, and obvious change in customer shopping behavior as well as expectations, there were many retail businesses that took the opportunity to bolster their digital infrastructure. While retail businesses like Big Bazaar shut down, 30% of total retail stores were looking at closure in India, and nearly 850 retail stores across USA face closure in 2023, 17145 stores closed in UK in 2022 alone, the global e-commerce saw a sharp rise as people started ordering online and limiting their in-store purchases.

The pandemic changed the whole retail landscape but there are other contributing factors such as organized retail crimes, shoplifting and lack of inventory visibility, and retail shrinkage that have caused more than 100b USD a year in retail losses as per a Forbes report.

Technology has now become a significant factor in how businesses pan out and succeed over the years. The need to create technically sound digital infrastructure in retail couldn’t be more apparent than now when retail is slowly trying to ward off the losses. Technological solutions such as internet of things, RFID and EAS, BLE, combined with a robust digital infrastructure powering retail supply chain and logistics can be the bedrock of this new retail landscape.

Chipless RFID in Retail

The Radio Frequency Identification (RFID) technology finds many applications in modern retail. From enhancing the in-store operations, POS, to retail inventory visibility and retail supply chain tracking, RFID provides an accurate and efficient way to optimize retail operations.

While many large scale retail businesses such as Walmart, Macy’s, Target, H&M, Zara etc. have been using RFID, despite the high implementation costs, Chipless RFID provides a better alternative (in terms of costs) for retail business looking to replace barcode and use RFID for their AIDC needs.

As the name suggests, Chipless RFID means an RFID system where the RFID tag doesn’t contain the microchip (IC) for storing the data on the tag. And guess what, lack of a silicon IC or chip brings down the passive UHF RFID costs to 1 cent when ordered in huge quantity or even less than a cent, just 0.1 cent even down from the 4-5 cents/per UHF Passive RFID tag (with chip).

The chipless RFID is uniquely positioned to replace the decades old UPC barcode in retail while bringing the benefits of remote tracking of items using RFID. You must note that barcode has been driving retail for years and to replace UPC barcodes, chipless RFID has to be extremely cost-effective while keeping the benefits that RFID offers such as scanning without a clear line of sight, high performance of RFID system, high accuracy, speed, and inventory visibility.

The Chipless RFID market is growing rapidly and according to a report, it is expected to grow at a CAGR of 28.1% between 2023 and 2030, growing the market size from 1176.7m USD in 2023 to 6660.6m by 2030.

The Chipless RFID and Item-level Tagging in Retail

The Chipless RFID doesn’t use a traditional silicon chip but basically consist of an electro-acoustic transducer connected to an antenna. It uses the SAW (surface acoustic wave) and time domain reflector technology where the ID code is reflected by the acoustic wave and such reflections are converted back to electromagnetic energy and transmitted to the reader. Such chipless RFID tags costs 10-20 euro cents for up to 256bits capacity. Frequency domain chipless RFID are also in use.

High coding capacity Chipless RFID and spatial chipless RFID can be used in future, increasing the coding capacity of the tag without increasing the cost. 

The Chipless RFID finds many applications in universal item-level identification and tracking. According to IEEE, 50B objects are networked by 2021 and many of these objects are using the chipless RFID tags. In retail, companies are using it for item-level tagging and removing the supply chain bottlenecks, enhancing the item-level visibility inside the store and inventory and to save time on inventory cycle count. 

The fact that chipless RFID does not contain a chip, it makes it easy to function in harsh environmental conditions such as heat and frost. At short range, chipless RFID performs better than traditional RFID tags with chip at same harsh environmental conditions. It makes it easy to track pallets and Returnable Transport Items (RTIs) such as bins and crates. 

Apart from that, Chipless RFID is quite successfully replacing UPC barcode from item-level tagging for obvious reasons. RFID not only enhances the efficiency at retail stores but also allows retailers to spend more on shopper’s experience by reducing the costs and risks in inventory control. Retail employees can now take a quick inventory cycle count with 99% accuracy within few hours, a task that would earlier take 2-3 days.

Chipless RFID allows for timely stock replenishment and gives retailers more accurate data on which items are selling fast and which aren’t. It also helps with creating reports and restocking of retail stores with accurate demand and supply perceptions, keeping high demand stuffs at front. Item-level tagging of apparel, shoes and other retail merchandise is also helpful in preventing counterfeiting and shoplifting.

To conclude, chipless RFID presents a new dimension in item-level tagging in retail while minimizing the costs as chipless RFID tags come cheaper than RFID tags with silicon chip but offer all the benefits of RFID, be it accuracy or performance. In retail, chipless RFID is now successfully replacing UPC barcode for the aforesaid reasons. The item-level tagging of apparel and shoes in retail is also becoming the new normal enabling a faster check-out and better customer experience at POS. 

Disclaimer: The information presented here is for general information purposes only and true to best of our understanding. Users are requested to use any information as per their own understanding and knowledge. Before using any of the information, please refer to our Privacy Policy and Terms and Conditions.

  • Created on Jul 31, 2023

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