RFID and Supply Chain Visibility: A Year of Progress, A Future of Possibility

RFID technology has been gaining momentum across retail, logistics, food safety and healthcare for decades, but 2025 felt different. It wasn’t just one thing driving adoption. Supply chain visibility pressures, strategies for circularity, shrinkage concerns and regulatory demands all converged at once.

For sectors like apparel (which is battling inventory management, availability and loss prevention) and parcel shipping (needing to be faster and more accurate), the business case for RFID has become clearer. The question for many companies has shifted from whether the technology makes sense, to where it fits in their broader supply chain strategy and how soon it can go live.

What made 2025 different was the scale of deployment. We saw entire categories embrace source tagging, where products are ‘born digital’ at the point of manufacture rather than being tagged downstream. This shift eliminated manual tagging costs and human error while enabling true end-to-end visibility from factory floor to consumer hands.

RFID Informs Circular and Omnichannel Thinking

It’s clear that the transition to circular economy business models will impact client expectations in 2026. Rather than focusing solely on traditional loss prevention, businesses increasingly expect RFID solutions to enable sophisticated product recovery, reuse and recycling programs. This expanded scope requires more versatile and intelligent tracking systems that can support the entire product lifecycle.

Seamless omnichannel integration has also become a critical expectation, with our retail clients demanding RFID solutions that work flawlessly across physical stores, e-commerce platforms and mobile applications without operational friction. This presents a massive challenge, so the more we can help streamline implementation, the better positioned our clients will be to meet consumer expectations across all touchpoints.

I’ve seen apparel manufacturers, for instance, transform their cross-channel stock accuracy and efficiency within months of implementing source tagging. My view is that this kind of tangible impact changes minds far quicker than any forecast.

When Proven Technology Meets New Intelligence

Things will get even more interesting in 2026. RFID has been refined and made more cost-effective over decades. It’s not experimental anymore. It’s battle-tested infrastructure that bridges the gap between physical goods and digital systems, delivering real-time data that makes supply chains more punctual and responsive.

But now we’re pairing that proven foundation with artificial intelligence (AI) and predictive analytics. The combination creates something entirely new and very exciting. Real-time operational intelligence will move far beyond basic inventory tracking to encompass predictive analytics capabilities. At Avery Dennison, we know our clients now expect AI-powered insights for demand forecasting and supply chain optimization, as they strive to increase profits by boosting productivity and inventory accuracy. This demand for advanced analytics represents a fundamental shift from reactive to proactive supply chain management.

Machine learning algorithms analyze RFID data streams to forecast demand spikes, identify bottlenecks before they cascade and optimize inventory positioning across networks. This shift from reactive to proactive management represents a fundamental change in how supply chains operate.

Adding blockchain integration into the mix gives enhanced traceability and trust that stakeholders actually believe. Suppliers, logistics providers, retailers and consumers can all verify the same immutable record of a product’s journey. That level of transparency wasn’t technically possible five years ago.

The Technologies Diving 2026

Several technological advances are converging to make next year transformative. IoT connectivity means RFID readers can be deployed in more locations with less infrastructure investment. 5G networks provide the bandwidth to handle millions of simultaneous tag reads without lag. Cloud platforms can process that data instantly and push insights to decision-makers in seconds rather than hours.

Tag technology itself keeps improving. Chips are smaller, more sensitive and require less silicon to manufacture. Antennas are being designed for recyclability, addressing sustainability concerns that held back some adopters. Food-safe containers, industrial logistics applications, healthcare tracking and parcel shipping all have tailored solutions that actually work in harsh real-world conditions.

Cost effective RFID now enables the tagging of lower price point items, making item-level tagging economically viable for categories that couldn’t justify it before. When you can tag individual items for pennies and gain visibility worth dollars, the business case becomes glaringly obvious.

What Supply Chain Leaders Need to Know

Markets are tough right now. According to the World Economic Forum’s Global Risks Report 2025, 62% of business leaders and academics think the business environment facing us will remain ‘stormy and turbulent’ for the next decade. In this climate it’s easy to get carried away with tech innovations that promise to steady the boat. But my view is that supply chain professionals should focus on the technological tools that actually deliver results.

The newest advances often sound promising but remain untested in production environments. Companies can’t afford to bet their operations on unproven concepts.

That’s why RFID paired with AI represents such a compelling combination. You get the reliability of mature RFID infrastructure combined with the intelligence of modern analytics. It’s a very practical path forward.

So, in 2026, expect to see widespread adoption of predictive inventory management powered by RFID data. Automated warehouses will become smarter about dynamic cargo optimization. Transportation networks will shift loads in real-time based on actual demand signals rather than static forecasts. Sustainability reporting will transition from annual exercises to continuous monitoring.

The combination of powerful technologies will become more prominent in the year ahead. The pairing of ambient IoT and RFID will help global brands realize the full potential of a future-proof, fully-connected and intelligent supply chain. For example, our work with Wiliot can enable transparency in food by bringing together temperature and time sensing at palette level (Wiliot) with RFID at item level (Avery Dennison) to provide unparalleled visibility and accuracy so that products reach the consumer at their freshest.

The companies that thrive won’t necessarily be the biggest or the most established. More likely, they’ll be the ones that moved fastest to build agile, flexible supply chains with complete visibility. When business conditions remain volatile, you need to see clearly to navigate safely. RFID enables that visibility. AI helps you act on it intelligently. Together, they’re making possible what seemed impossible just a few years ago.