RFID Industry Prepares for a Year of Opportunities, Challenges

Published: January 8, 2024

Companies are seeing a January uptick in demand for RFID technology solutions, or expansions across industries.

In a post-Covid economy, as companies face rising labor costs, RFID technology adoption is expected to rise, but also expand, across products and verticals.

“The RFID industry in 2024 is headed for double digit growth in the number of items that are tagged,” says Randy Dunn, Zebra Technologies’ customer success director. He adds that “’Halo’ customers in many vertical market segments will drive new RFID use cases which will compel their competitors to follow.”

According to industry leaders and observers, retail tags will be added to more product categories of consumer goods. Retail supply chains will expand use of RFID into the facilities of product suppliers and their partners. And adoption is likely to increase across other verticals, from food to healthcare and pharmaceuticals.

Additionally, Dunn asserts, industry partnerships will form to minimize the complexity of RFID deployments, more fixed reader infrastructure will be available, and enterprise software will “help enterprises consume, process and utilize RFID data across a range of business use cases.”

The industry began 2024 with some tailwinds from the retailer-based RFID tagging mandates, as well as improvements in supply chain availability. And RFID technology companies are reporting that their customers—such as suppliers—are seeking more functionality to leverage the RFID systems they are mandated to deploy.

Efforts Underway to Meet Mandates

Walmart’s RFID mandate for many of its stores’ product categories has a deadline of February 2024, which means the push has become more immediate for many suppliers.

As a result, technology companies are working with new companies that have been introducing themselves to RFID to meet such mandates. RFID4U, a full technology solution provider, has begun 2024 with a surge of customers who are applying UHF RFID tags to goods destined for RFID-using retailers, now seeking ways to gain advantage from the technology internally.

”A lot of businesses that have dipped their toes in the water—with a little bit of exposure in terms of RFID—say they now want to take advantage of the technology,” says Archit Dua, RFID4U’s director of strategic development.

“That leads to a huge cascading effect,” he says, which could mean more solution deployments with suppliers as well as their partners. “The first thing for any retail organization is just slap and ship the labels, but the next steps we’re starting to see are actually validating the RFID labels.”

This step could consist of using RFID readers to confirm a tagged product has been produced and shipped to the retailer.  The tags can then also be read internally at points such as in the suppliers’ warehouses and distribution centers.

Tracking Work Progress

Beyond that, some product manufacturers are beginning to leverage RFID tag reads to track their manufacturing processes for work in progress visibility.

This year, Dua says, “we’re seeing that [suppliers’] appetite for adopting the technology is a lot greater,” and it is being led, in part, by the confidence their retailer customers have in the technology.

“It’s an ecosystem of organizations: it’s retailer suppliers, it’s their partners, it’s the companies that source their material, and their logistic partners,” Dua adds.

RFID for Retail, Healthcare, Manufacturing and More

In 2024, RFID’s growth outlook extends beyond retail to industries such as healthcare and pharmaceuticals, logistics, and manufacturing, says Mathieu de Backer, Avery Dennison Smartrac’s Innovation and Sustainability VP.

“Given that adoption of RFID technology enables companies to achieve 99.9 percent inventory accuracy, we can certainly expect uptake to continue across markets,” he says.

Tagged pharmaceuticals can help ensure supply chain efficiency and prevent expiration of medications, for instance. In healthcare, medical tools and consumables can be tracked to ensure they are properly administered, and for manufacturing, companies can prevent delays in the production process.

In the meantime, when it comes to the retail industry, growth will continue. The rising retail adoption rates for 2024, are based, in part, on the ability to address market challenges such as store thefts. Additionally, it serves the ever-growing need for greater stock accuracy driven by omnichannel demands.

More Integration

In 2024, de Backer predicts retail brands will turn to more integrated RFID solutions to reduce shrinkage. “This year will see sustainability remain a key driver for adoption, given the widespread understanding of how RFID and the transparency it brings can help reduce waste,” he stated.

To further the growth in “frictionless shopping” over the past year, Avery Dennison has worked with Amazon to expand their Just Walk Out capabilities with RFID sensor technology. This created opportunities to enhance the store experience to apparel and softline merchandise.

“Given the uptake and widespread potential application of the technology, we fully expect to see more exciting rollouts throughout 2024,” de Backer says.


Sustainability efforts are going to accelerate to meet some legislative requirements. For instance, Avery Dennison is among the companies offering a solution for brands and retailers striving to meet Digital Product Passports (DPPs) requirements.

“DPPs require a digital transformation, so it’s important brands start planning now,” says de Backer.

Avery Dennison’s DPPaaS can accelerate this process by providing organizations with the platform (atma.io), digital identification solutions, and expertise to capture the metrics required for compliance, including details on how products can be recycled and reused to enable a more circular economy.

Business Appetite for Technology Improving

For the past few years, RFID4U’s Dua notes there has been a more cautious approach to business spending, no matter what kind of technology is being offered.

While technology spending was limited by economic concerns, this year, he says, “we’re seeing that a lot of companies are starting to get more confidence, we’re seeing that a lot more folks are open to the idea of trying something new.” They are being driven in part by the high cost of labor and shortage of job candidates.

The return on investment is being realized earlier, in some cases, when compared against the rising cost of paying employees to conduct tasks such as manually counting inventory.

Supply Chain Delays Easing

Now several years past the COVID 19 pandemic shutdowns, the supply chains have improved for RFID chips, tag inlays, readers and printers. That means companies that are ready to deploy don’t have to wait for the necessary hardware.

“Once a customer gets a green light [to deploy] they don’t want to wait six months to receive their items,” Dua points out.

Recent product availability has meant that customers are less likely to see wait times for their technology.

Software as a Service for Retail, Food and More

The way RFID data is being managed has changed as the technology becomes more prevalent. SML’s Dean Frew anticipates an existing trend toward store software solutions as software-as-a-service (SAAS) and subscription based commercial models to continue.

When it comes to applications, Frew adds “we think that more distribution centers and factories will adopt RFID technology in 2024 as brands continue to realize the value of RFID throughout the supply chain.”

In addition to seeing further adoption of the technology in non-Consumer Packaged Goods (CPG) retail segments, he predicts more food, logistics and “last-mile” deployments.

“The use-case for RFID in the food sector is particularly interesting. With such stringent regulation being put in place across the food supply chains to reduce waste and increase traceability,” says Frew. He points out that the technology can deliver significant value for quick serve restaurants and food retailers.

“Not only does it help them seamlessly comply with these regulations, it also helps businesses to realize operational efficiencies that can transform their organization,” Frew says.

Further Research and Development

In the meantime, companies such as Clustag are continuing innovation to further meet technology demands. The solution provider says it created a new dedicated research and development department in 2023.

“It will allow us to help our customers leverage the technology to gain efficiency in eCommerce packing preparation and shipment verification processes,” says Manolo Reguart, Rielec Clustag strategy and business development director.

That will be the latest feature added to the company’s existing RFID MOT Station to help the food and beverage industry solve accuracy reading issues, which has posed challenges for liquids and food items.

“We expect to see an increased demand in the food and beverage industry, including surrounding segments such as grocery and QSR [quick serve restaurant],” said Reguart.

Promoting a Circular Economy

RFID technology—such as Clustag’s solutions—will continue to enable retailers to optimize their inventory levels, reducing the amount of unsold inventory that ends up in landfill.

“Ultimately, this helps to reduce waste and supports sustainability efforts,” says Reguart. “The speed and success of robust, reliable solutions will be a significant factor (in furthering the trends.”

“These technologies need to be conducted by highly skilled and specialist technical companies, especially for emerging markets and use cases, which might be new to RFID, and are looking to gain confidence its capabilities,” he says.

Uncertainty Ahead

In 2024, economic and political across uncertainty across the globe can impact the industry and the adoption of technology.

The greatest challenge ahead may be the variable state of the economy. Frew poses the questions: Will an economic downturn cause retailers to retrench? Will it cause them to pause and hope that keeping a SKU-based approach to inventory and operations will get them where they need to be?

“Retailers are doing some soul searching and deciding if now is the time to find the courage to make the change. If they do, they will realize the benefits as many others have,” he answered.

Dunn adds that the core challenges ahead are centered around simplifying RFID deployments for a fast ROI.  “It’s why Zebra believes it is critical to work with a proven and trusted leader in this space,” he says, referring to Zebra as a company that reduces risk due to its experience in the market and wide set of full products and solutions.

Frew acknowledges that technology adoption is not a small decision to make and it is important that retailers get it right.

“As long as they can see the value in technology, the benefits it will bring their business, and, most importantly, the ROI, they should feel empowered to make the change and transform their operations,” he states.

Key Takeaways:
  • Based on the growth of RFID in apparel retail inventory management, the technology use will be expanding this year to other products and industries
  • Sustainability and the Digital Product Passport (DPP) requirements in the European Union will offer new drivers for companies to use RFID for greater visibility.