In November, H&M launched a new retail format at its 7,000-square-foot space in Brooklyn’s Williamsburg. Some of the new tech features incorporated in the store’s design include smart mirrors, which can detect the size and color of clothes the customer tries on, and mobile payments enabled around the store. But the most important feature is one that customers will barely notice: Every item is tagged with encoded radio frequency identification (RFID) tags, giving the store and its customers the ability to track the store’s inventory and size options, all in real time.

The tags also can be embedded into garments or accessories themselves, and have seen increasing use from such brands as Salvatore Ferragamo and Lululemon, which have recently started putting RFID tags directly into shoes and bags to track them outside the store—and potentially make buying legitimate preowned products easier for shoppers. Another technology that can be used to tag garments– sometimes in the form of a scannable QR code on the label– called near-field communication (NFC) lets users scan the tag to get more information about the product and interact with the seller or brand that makes it.

Most retailers only know approximately how much inventory they have in stock. Store associates manually log individual dresses or sweaters or shoes by scanning individual barcodes: a system that is prone to human error. On top of that, when they use a manual-logging system, companies have no idea what happens to goods once they leave the store. How is a garment disposed of? Does it ever get resold?

Tagging technology like RFID and NFC lets brands answer some of these questions. By adding smart labels that can be read remotely and simultaneously to garments and bags, brands can keep better track of their inventory and understand items’ life cycle more completely. In many retail settings, RFID tags have historically served in place of bar codes, letting companies keep track of their stock. At Walmart, for instance, scanners can read and record many items on a shelf or in a designated area. While those RFID tags helped track an item’s location in a store, they only worked within a range of a few feet (in August 2020, Victoria’s Secret debunked claims that the tags in their bras allowed the company to track customer movements).

Some versions of the tags can record and relay information to resale or recycling companies, including an item’s age and where it’s been sold previously. NFC can also be used to give information to customers, from styling tips to the option to reorder when they scan the label, when they connect to it on their phones.

And while RFID and NFC are not a new technologies, a growing number of fashion brands are adopting them, seeing it as a way to better manage its supply chain, and start resale programs. Over the past few years, brands and retailers alike—including H&M, Nike, Ebay, Coach, and Rent the Runway—have incorporated the technology into their factories, which only requires the addition of tagging machines or adding a QR code-printing step to existing production lines.

Natasha Franck, founder and CEO of Digital ID company Eon, which works with brands, including Coach, Pangaia, and Target, says she started the company seven years ago to help brands become more sustainable. “In order to enable a circular business model transformation, we need to turn physical products into traceable assets,” she says. “We have been solving all barriers from the hardware—NFC tags and QR codes—to the tracking software, to the data compiling to enable brands to create on-product IDs that connects it to the company through its lifecycle.” Franck also says that Eon is working with brands to create digital IDs– already required by law in the EU– that would help store and trace the environmental information of a product.