It is fair to say that RFID has turned a corner. Over the last few years, adoption has expanded well beyond apparel and continues to accelerate into new retail verticals. At the same time, use cases have broadened significantly. What began as a solution for in-store inventory accuracy is increasingly being deployed across end-to-end supply chains, enabling item-level visibility from manufacturing through distribution, sale, and return.
This expansion reflects a broader shift in how RFID is positioned and discussed. Once viewed primarily as a point hardware deployment, RFID is now part of a wider conversation around software platforms, automation, and analytics. Indeed, while hardware, and in particular tags, continue to be the biggest cost of an RFID project, it is the software layer that determines whether RFID data provides lasting business value by enriching, contextualizing, and distributing data across the enterprise.
All business value from RFID stems from inventory accuracy, but that is only the first step to retail transformation. More item-level data from tagged items, read more frequently, enriched with more data sources, and fed into enterprise data lakes and analytics engines, combine to create new ways of running a retail business.
RFID Evolution
Historically, RFID software has centered on middleware and custom development. Much of the effort went into configuring readers, managing read rates, translating EPCs, and building dashboards to visualize results. Middleware remains a very substantial market today, offering a low-cost way of getting started with deploying and controlling an RFID environment.
However, this approach is increasingly being complemented by off-the-shelf software solutions with an increased focus on operational workflows and analytics. For suppliers, this evolution represents a clear commercial opportunity. As RFID deployments mature, selling basic middleware is giving way to higher-value software licenses and recurring revenue models. The focus is shifting from enabling RFID to delivering outcomes powered by RFID data and supported by analytics, automation, and integrations.
This evolution has been slowly ongoing for several years now, but is being accelerated by a number of forces. We highlight four here:
Always-On Readers
Conversations with retailers have evolved significantly over the course of just 12 months in terms of how they perceive the ROI of the solution, including justifications and caveats for investment. Broadly, sentiment is much more positive at the end of 2025 as investments are justified by time savings, more real-time inventory accuracy, and associated benefits such as replenishment. Additionally, retailers who have adopted always-on readers are taking creative approaches to managing retail operations now that they have a greater mastery and control over inventory.
Deployments today, while at the cutting edge of what is possible with RFID today, are still only taking advantage of early benefits of always-on readers; additional ROI will come in the coming months and years. Software platforms for handhelds and overheads require different skillsets; competence in one does not equate with competence in the other. Suppliers will need to support both to be leaders, developing expertise both in hardware and in the associated workflows managing many times more data.
Sensor Fusion
Crucially, RFID is not the only technology driving retail digital transformation. Video systems are already making a significant impact, usually deployed as standalone solutions initially, but increasingly used alongside RFID. Together, they support loss prevention, process automation, and deeper insights into how consumers interact with tagged products. In addition to video, Ambient IoT devices, EAS, ESLs, and other IoT sensors are all increasingly part of the connected retail landscape.
RFID platforms are becoming increasingly central repository systems for all inventory operations. While RFID has been used as a standalone point solution for counting tagged products, retail automation and optimization will be focused on sensor fusion to correlate multiple sources of data and derive more meaningful and contextual insights. This will be a crucial area for development over the coming year.
Go To Market Flexibility
Retailers have very different approaches to building different layers of their IT stacks. Some prefer to build every part in-house, others prefer to buy RFID platforms and build their own applications, others prefer to buy best-in-class Software-as-a-Service (SaaS) solutions, while others still prefer hybrid approaches leveraging 3rd parties’ expertise within existing applications.
To target different retailer types and sizes, suppliers must be flexible in how they deliver data and applications. Focusing purely on a full-blown SaaS)model risks limiting suppliers’ total market opportunity; Platform-as-a-Service (PaaS) and headless API models are among others that meet the needs of enterprises. Suppliers must also consider not only how to enable retailers themselves, but also integration and enterprise software partners, who will be crucial to customizing solutions and adding scale.
AI & Analytics
The specter of artificial intelligence (AI) looms large over all enterprises today. More item-level data from RFID-tagged products, fed into EPC repositories and enterprise data lakes, enable higher inventory accuracy and richer item-level event data, creating the conditions AI needs to deliver meaningful value. Better data enables better models, and better models drive optimizations that directly impact profitability and operational efficiency.
Conversational AI tools for different retail personas, machine learning (ML) trends analysis, and big data analysis using enterprise data lakes are key tools which retailers at which retailers are starting to look more closely, and which suppliers are starting to offer. These tools will impact task management and prioritization, space management and money mapping, assortment and allotment, markdowns and loyalty schemes— and many others. Suppliers must look to co-develop alongside retailers and resale partners to ascertain the key use cases and responsibility for solution delivery.
In Summary
As RFID becomes recognized as a mature market, expectations are changing. Retailers are no longer buying technology experiments; they are investing in platforms that must deliver measurable outcomes, focusing more on analytics and operations. Software suppliers must evolve accordingly, differentiating not just on RFID expertise, but on the breadth and effectiveness of the solutions they provide.
The next phase for RFID is clear. It is no longer simply about knowing what inventory exists, but about enabling intelligent, data-driven retail operations.
