In today's up-to-date and modern business „radio-frequency identification“, or RFID (for short) technology, represents almost the most efficient technology for identification of packed products and items which are to be transported, stored or periodically listed. It is thought and there is also a tendency that in the near future every packed product should be labeled with the RFID microchip and its antenna. RFID technology functions on the principle that when RFID microchip is placed on the packaging, i.e. on the product, it contains almost all information relevant for both the manufacturer and the end user. Although RFID technology is known for more than 50 years now, its significant development can be noticed in the last years, especially in the fields of trade and logistics. The aforesaid can be justified by the changes that emerge within the supply chain– primarily due to the stronger role of merchants in relation to manufacturers. The today's practice shows that introducing RFID technology made the business process easier and faster, which also results in profit increase of the particular company. This thesis will describe the basics of RFID technology in the most understandable manner and, more importantly, how RFID technology affects the business practice, with the emphasis on the usage of this method in logistics and retail business, i.e. in the supply chain of a clothing store. This thesis will present several world known brands in trading clothes and how RFID technology helped them to keep up with the competition, i.e. to reduce business flows. I will also mention one known company (Tyco) which produces and implements RFID technology and which helped INDITEX Group (Zara, Pull&Bear, Massimo Dutti, Berschka, Stadivarius; Oysho and others) to introduce this very important technology into its business operations.