RFID is a technology which is used for identifying, tracking and capturing the data by the help of radio waves. The general RFID system consists of antenna, tag and the decoder. By using the three components, the data of the product can be easily captured.

Now-a-days as the global market has been changed, there is much advancement in the RFID technology. By the use of these advancements, there will be reduction in the component cost and the capabilities of the retail system has been increased.

For meeting the demands of the customers, the RFID has gone through the transition. For the generation of the revenue and for the innovation of the revenue techniques, RFID technology advancements are being done. The new innovative operations should include tracking the inventory on the real time basis and making use of RFID innovations in production, storage, shipping and distribution.

There is a return investment on the buyers of the RFID technology with the advanced features of RFID. Governments of different organizations are concentrating on the allocation of frequency and harmonization of the RFID bands which are the key driving force for the market of RFID. By using the technology advancements of the RFID, credibility of the market is being increased. Different governments are using the RFID technologies for different purposes. Like for example, Chinese governments are using this in the national Identification card scheme, British government employed it for the passports and the US government employed it for the military. Some of the governments are using for the battle against the terrorism and crime.

Intense competitions are being faced in the retail markets. Every retailer wants to improve the services to customer, wants to improve the sales, reduce the expenses. There are many advantages of using RFID in retail markets. The general benefits are reducing the items which are not being sold, improving the stock replacement capability, customer service. For the real time inventory management, each item tagging is being implemented and is made mandatory in large retail stores. By the extreme usage of the RFID, the investments on the hardware and the software are being increased.