From Hardware to Software: How RFID Is Transforming Retail

Radio Frequency Identification (RFID) is well-established in retail, especially in the apparel market post-COVID-19 pandemic. RFID tags for apparel are used primarily for inventory management use cases, but also for Point-of-Sale (POS), theft prevention (RFID-as-Electronic Article Surveillance (RFD-as-EAS)), and enhancing customer experiences (e.g., smart fitting rooms). This has enabled retailers to automate processes, gain supply chain visibility, prevent losses/theft of products, and enhance omnichannel customer experiences.

Whereas RFID has historically been perceived as a point hardware technology, it is increasingly being driven by software. RFID technology suppliers tell ABI Research that they have witnessed more demand for their software solutions in the past 6 to 12 months than in the previous decade combined.

Using several recent ABI Research reports on RFID, this article provides a comprehensive overview of RFID software in retail management. It covers use cases, investment drivers, examples, and future expectations.

Key Takeaways:

• RFID software demand is skyrocketing. According to ABI Research forecasts, the retail RFID software market will more than triple in size between 2025 and 2030, reaching over US$1 billion by the latter date.
• Apparel leads RFID adoption, but other sectors are on the rise. Our data clearly indicates that apparel brands continue to dominate RFID software adoption. However, other retail initiatives in general merchandise, as well as new growth markets like Food & Beverage (F&B) or pharmacy, are increasingly introducing RFID software solutions at scale.
• Shift from middleware to applications. RFID technology providers are enhancing data analytics, real-time scanning, and supply chain integration. The goal is to maximize Return on Investment (ROI) from both new and existing deployments.
• Enterprise systems are key enablers of RFID software. RFID point solutions have only ever needed light touchpoints with enterprise systems; as deployments mature, enterprise software providers are enabling broader support for RFID by exploring partnerships, acquisitions, and Software-as-a-Service (SaaS) offerings.
• From point solution to automation stack. RFID data are no longer siloed; they are being embedded into the broader retail Information Technology (IT) and automation ecosystem.
• AI and analytics will amplify value: Future RFID software deployments will use Artificial Intelligence (AI) agents and data models to deliver predictive insights and autonomous decision-making. A rich and labeled data layer becomes a key differentiator.

What Is RFID Software?

RFID software refers to digital infrastructure providing the analytics, workflow integration, and real-time visibility needed to support operational decisions. Tags (chipsets) and readers capture item-level data, and RFID software converts this retail data into actionable business intelligence.

For example, without software, clothing stores simply see raw RFID scans of shirts, dresses, shoes, etc. There is no deeper insight revealed.

RFID software provides a richer context for inventory levels. On a real-time visibility dashboard, retailers can identify which product sizes are running low and where items are misplaced. Consequently, department stores can quickly restock the shelves and track down misplaced products. This application can be replicated across grocery chains, warehouses, Micro-Fulfillment Centers (MFCs), and similar facilities.

Today’s RFID solutions serve a range of use cases:

• Automating inventory management workflows and other product workflows throughout the store.
• Providing real-time visibility across the End-to-End (E2E) supply chain.
• Enabling smart fitting rooms and enhanced customer experiences.
• Delivering analytics and insights that guide operational efficiency.

Software-first strategies are becoming central to RFID solution development. Indeed, software is seen as essential to maximizing the value of RFID deployments.

What Trends Are Driving Demand for RFID Software Solutions in Retail?

RFID has typically been viewed as a hardware-centric technology—think of physical tags, antennas, and readers. This hardware is still essential to retail operations, but the software layer is being added to RFID solutions to achieve true transformation.

SaaS and cloud-based platforms are gaining strong traction in retail. These tools enable RFID software solutions to plug directly into enterprise systems, delivering a low-hassle deployment experience. After all, one of the most attractive features of RFID software is reduced complexity.

Three key trends are driving the shift to RFID software:

• Widespread adoption. In 2023, an Impinj survey found that 48% of supply chain professionals expected to have mature RFID deployments within 2 years. This expectation has come to fruition. RFID adoption has reached a tipping point in the apparel industry and is approaching critical mass in other retail industries. This hardware maturity stimulates demand for advanced software solutions to extend value beyond simple stock accuracy and Digital Product Passport (DPP) compliance. RFID suppliers are increasingly supporting new workflows like omnichannel fulfillment and loss prevention, supported by recent hardware innovations. Case in point, Impinj and Qualcomm are working together to integrate Ultra-High Frequency (UHF) RFID readers into enterprise and consumer handheld devices.
• Retail IT modernization. Retailers have significantly upgraded their IT infrastructure over the last decade. Consequently, they have embraced cloud platforms, which simplify software integration. This modernization has made it easier to integrate RFID software through Application Programming Interfaces (APIs). Resultingly, retailers can calculate ROI beyond inventory management. For example, fashion retailer Uniqlo leverages RAIN RFID for everything from supply chain to checkout. RFID deployment has helped the company triple inventory storage efficiency and reduce labor costs by 90%.
• Convergence with enterprise systems. RFID software can now do many of the things that traditional Enterprise Resource Planning (ERP) systems do. Applications such as operations functionality, cloud-native analytics, and reader embedment are becoming standard. Therefore, RFID platforms act as a centralized “unified inventory” environment for retail management.

What Are Some Examples of RFID Software in Retail?

Three notable examples illustrate how vendors are building RFID software solutions tailored to the retail industry:

• Nedap is building item-level digital twins. Nedap positions itself as the source of all item-level retail data, spanning manufacturing, warehouses, stores, and e-commerce. The company has a legacy in loss prevention, but it is shifting toward RFID-as-EAS. This solution is designed to reduce shrinkage and deliver more seamless checkouts for in-store customers. Nedap is one of the top RFID market players targeting retail, alongside Avery Dennison and others.
• Frequentiel is driving scalable SaaS adoption. Frequentiel is evolving from a System Integrator (SI) to a global RFID SaaS provider. The vendor offers retailers an out-of-the-box, reader-agnostic platform. Future plans include multi-technology support, E2E supply chain coverage, and expanded in-store applications. For example, ready-to-wear brand Kiabi recently introduced RFID technology from Frequentiel’s OCTO+ tracking platform and Nedap’s anti-theft terminals. Kiabi RFID project manager Anthony Amico says on Stratégies Logistique these deployments “allow us to secure in-store flows without compromising the fluidity of the customer journey, while improving the visibility, reliability, and responsiveness of our inventory management.”
• GreyOrange is expanding beyond warehouses with gStore. GreyOrange launched its gStore in 2022 and added native RFID integration in 2024. The platform emphasizes overhead readers, with future enhancements in store workflows, machine vision, and loss prevention. The platform’s focus is on store operation management, enabling store associates to be more efficient and managers to better understand store-level trends and sales patterns.

Retail RFID Software Ecosystem

RFID software development requires not just software innovation, but also hardware advances and integration expertise. The four key company types across the retail RFID software ecosystem include inlay manufacturers & service bureaus, reader Original Equipment Manufacturers (OEMs), RFID SaaS/solution integrators, and enterprise systems & SIs.

Table 1: RFID Software Company Types, Examples, and Developments

The RFID ecosystem is evolving, requiring all players to focus more on flexibility, scalability, and ecosystem building. This is a stark contrast from the rigid, hardware-centric deployments of the past.

Future of RFID Software in Retail

Retail customers today have different expectations for RFID products than they did even 2 years ago. Number one on the agenda is to develop easy-to-use Off-the-Shelf (OTS) solutions that go beyond inventory tracking. They should be flexible and manage fast-changing cycles. Besides that, retailers expect RFID software solutions to be interoperable, application-rich, and autonomous.

ABI Research will continue tracking the following developments:

• Deeper ERP and enterprise system involvement. Whether they like it or not, ERP providers must ramp up their support for RFID software. As exemplified by Acumatica, partners and acquisitions will be key to success. The company supports CYBRA’s RFID label printing and Internet of Things (IoT) middleware solutions.
• AI-powered analytics and agents. Over the next 2 years, RFID suppliers will increasingly release Artificial Intelligence (AI) plug-ins to enhance their solutions. AI agents query RFID data and provide real-time recommendations. Notable early examples include Mojix’s AI Agent Maiven and Xemelgo’s conversational AI plug-in for natural language database queries.
• Expansion to new retail segments. According to ABI Research market data, clothing & footwear accounts for 74% of total RFID software & services spending in 2025. Our analysts expect this share to decrease to 55% by 2030 as RFID software gets adopted by other retailers across food, warehousing, and general merchandise. To accommodate retailers, technology suppliers are building vertical-specific solutions that are ready to work out of the box.
• Off-the-shelf software dominates. Generally speaking, retailers prefer off-the-shelf RFID software solutions. However, there is still a strong push for building systems in-house, particularly for large companies with big IT teams like Decathlon, Inditex, or Walmart. These firms prefer the lower cost compared to buying an OTS software package. Partnerships will be pivotal to fostering OTS RFID development, as exemplified by Zebra Technologies’ collaboration with software suppliers SML IIS and Xemelgo.
• Not all RFID deployments are treated equally. RFID software deployments come in many varieties, depending on retailer needs. For example, large retailers like Walmart and Uniqlo partner exclusively with RFID suppliers that offer source code to integrate third-party functionalities and fine-tune the solution. These types of deployments require a multi-vendor approach. Meanwhile, small and mid-size retailers will be more inclined to adopt an all-in-one RFID software package, despite limited customization capabilities.
• Autonomous decision-making. Salesforce’s The Sixth Edition Connected Shoppers Report indicates that 3 out of 4 retailers view AI agents as essential by 2026. AI agents will automate various store and supply chain tasks, such as personal e-commerce shopping, customer service, employee training, and inventory management. While humans will remain in the loop, AI agents will be key to overcoming limited resources and optimizing retail workflows.
• RFID as part of a broader retail automation platform. Vendors need to think of RFID as part of a retailer’s wider IT stack. They must make it as easy as possible for retailers to leverage data for diverse reasons. For instance, RFID can simplify the return process, which 82% of customers look for in a retail brand. Vendors have kick-started this campaign by partnering with Point of Sale (POS) software providers. But closer collaboration with SIs, supply chain software suppliers, and AI vendors would accelerate RFID software adoption.

Conclusion

RFID is transforming from a tracking tool into a decision-making engine. Retailers that embrace RFID software solutions will experience operational boons across in-store, supply chain, and customer service operations.

For RFID technology vendors and SIs, the revenue opportunity will more than triple in value by 2030. Although apparel will continue to be the biggest retail segment for RFID, there are opportunities to fine-tune software platforms for blossoming industries like health & beauty and food & grocery.

ABI Research’s RFID research and advisory services were launched to help the RFID ecosystem navigate market shifts and meet enterprise demand. Our body of research identifies changing customer behavior, quantifies the revenue opportunity, and analyzes the various hardware and software vendors shaping the future of RFID. Connect with a member of our team today to discuss your pain points and get a glimpse into our future research.

Supporting Resources:

• UHF RFID Software: Retailer Adoption and Technology Trends
• UHF RFID: Retail Software & Services Market Data Overview: 3Q 2025
• RFID Reader Infrastructure Technologies & Opportunities

Frequently Asked Questions

What is RFID in retail?

Radio Frequency Identification (RFID) in retail uses tags, readers, and software to track items, manage inventory, and enhance customer experiences. Common use cases like point-of-sale automation, theft prevention, and supply chain visibility help retailers operate more efficiently.

What are the benefits of RFID software in retail?

RFID software enables retailers to automate inventory management, prevent product loss, and gain real-time visibility across the supply chain. Retailers also leverage RFID technologies to improve omnichannel experiences by facilitating smart fitting rooms, faster restocking, and data-driven decision-making.

Which companies offer RFID software solutions for retailers?

Leading RFID software providers include Nedap, Frequentiel, and GreyOrange, alongside key ecosystem players like Avery Dennison, SML IIS, Sensormatic, Checkpoint, and Zebra Technologies. These companies offer cloud-based, scalable platforms that integrate with enterprise systems to enhance inventory tracking, analytics, and retail automation.