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Let's take a look at who is using this technology in retail.

I'm not looking at payment here, which NFC has been mired in, merely how the shopping experience can be enhanced.

I'll get a few things off my chest about what works and what doesn't. First, a super quick differentiation between the two technologies.

Near field communication (NFC) is capable of two way communication, so payment (a debit and credit) for example, or even in medicine (a tag in your skin could send vital signs to your smartphone), and it works only at short distances. NFC can be used more basically, to simply transmit set information to a phone or tablet.

Radio frequency identification (RFID) has been around for yonks, the tags only transmit information, to an RFID reader (an NFC enabled phone or tablet such as an Android can be used as a reader, but for an iPhone a separate reader is required). These tags have been traditionally used in stock control.

There's bluetooth low energy (e.g. iBeacons) in the mix, too. However, many of the uses of beacons have been for push messaging to customers.

In this piece I'm not going to be talking about geofencing which can be done with RFID, GPS or low energy bluetooth (iBeacons). I'll be focusing on active rather than passive engagement, though I'll discuss iBeacons in my conclusion (as they're rapidly taking hold in many of the same scenarios).

Right, now that's taken care of, let's dive in...

Burberry

Burberry implemented the use of RFID technology in some flagship stores in September 2012.

The tags assist with stock and quality control, giving a snapshot of what's in store, while also enhancing the customer experience (as we'll see).

RFID tags in clothing activate changing room mirrors when customers try a garment. The mirrors show a video about the making of the piece and its time on the catwalk.

As you can see from the video below, it's designed to work with store tech only. To get the same experience on a customer's phone requires NFC and a card that comes with the product when purchased.

Interestingly, the sales associates will assist in deactivating the RFID tags within your purchase. But, presuming the customer assented, the tags could be left in and used to track the life of the garment, provided it was within range of a reader. 

I think this is a great usage of RFID for a few reasons: 

  • It's high fashion, so a considered purchase, which means the customer will have more time and be more receptive to associated content.
  • The mirrors are a good size for impressing with catwalk footage etc.
  • The mirrors are fixed in store, so testing and optimisation can be done easily (without needing to test hundreds of consumer devices).
  • The customer service in Burberry is such that not allowing customers to enable content on their own devices won't affect engagement, as there'll be a store assistant on hand. 

Made.com

Made.com is a pureplay but it has two UK showrooms which consumers can book an appointment to browse. Consumers use NFC technology on a tablet computer provided in the showroom to 'scan' items on show and purchase them online.

This works well, too, because:

  • The showroom doesn't allow customers to buy stock there and then, merely order online. This necessitates using a connected device.
  • The showroom is appointment only and customers punch in a code to enter - giving store devices out in this scenario won't result in them being stolen. 

made.com showroom

Casino

Casino is a French supermarket which has used NFC tags in front of every product on the shop shelves.

Customers touch their own phones to the tag and can view product info or add to their mobile app's basket.

This mobile app basket allows for physical checkout, the user can bag up the items as they shop then use their phone at the point of sale to pay for everything they've totted up.

In essence, it's like walking round with a handheld barcode scanner then paying on exit. This NFC solution is cheaper to implement than handheld scanners, which have been used in some supermarkets in Europe, placing the scanner into a terminal to give a sum total for checkout.

This strikes me as a very impractical use case, here's why: 

  • It's NFC, so it doesn't work with iPhones.
  • It doesn't save any time for the customer, who still has to go to the checkout.
  • It probably takes more time as the scanning of barcodes at the till is quicker than using the app on your phone for each item.
  • How does the store prevent loss? Are the contents of the customer's bags checked? I didn't see mention of any weighing process involved (as takes place with self checkouts).
  • Product informatiion is already on the packaging. I rarely need more.  

Harvey Nichols

In Q4 2013, Harvey Nichols put tablets in-store for customers to interact with products via NFC tags on shelves.

The stickered shelves would advertise what sort of content to expect, perhaps some Pinterest boards showing pieces being worn, or celebrities wearing a particular outfit, or more prosaic detail.

Customers could shop alone or with a store associate and save a 'collection' of scanned items when finished if they wished. Entering an email address would allow for this, and for Harvey Nichols to re-engage the customer with email.

Stats from CloudTags, the technology provider, showed:

  • 90% of shoppers engaged in store were not previously known to the brand.
  • 16% of all shoppers engaged with the experience.
  • 7% self-identified via email.
  • 18% took further action after receiving an email.

I think this particular implementation had its good points and its bad points.

Good:

I see this being as strong as the content used. The celebrity tie in is particularly interesting. If the technology is used to show you a lookbook of a particular piece of clothing, catwalk footage and celebrities wearing the piece, that would seem like a good incentive to engage.

Bad:

The device isn't ideal. The beauty of the Burberry implementation is that the customer is unburdened. They don't have to wield a smallish tablet, the mirror does the work.

Here one might question why I would want to look at an interface and not at the merchandise. This is one fundamental problem with tablet solutions for content, rather than the functionality of commerce.

Why save items for later when they can be purchased in store? Some people may be unsure or waiting for payday, but this tech seems a convoluted way of keeping a shopping list.

harvey nichols nfc use

Argos

Shoppers can now use their NFC-enabled smartphones in-store to download information about the retailer's products and download the Argos transactional mobile app.

Although Argos' new digital stores are impressive, I question this use of NFC. Again, it won't work with iPhones. And with in-store WiFi, the app download route is more familiar for a lot of customers and works for all smartphone users (provided retailers have apps across each ecosystem).

However, this is a cheap technology to install and it likely provides a fun interaction between the store associate and the consumer.

Conclusion

It's hard to see NFC sticking around. RFID will always have a place and can be used well. iBeacons looks set to take over.

This is why:

  • In the long term, we want to use our personal devices and this is needed if this interaction is done at scale (and will assist in tracking the customer journey). NFC just isn't compatible. Nor is RFID, so that's a win for iBeacons.
  • RFID still has a place but the store infrastructure needs to be used with the tags. The Burberry mirrors are a great example. When interactions like this are designed, the impact is more lasting.
  • RFID obviously has the bonus of being great for inventory and stock reordering.
  • iBeacons are taking off, being introduced across 100 stores on Regent Street in London.
  • iBeacons offer a wealth of extra functionality.

How iBeacons work:

When you walk into a store you can choose to receive notifications (messages and discount offers). One can currently use this system in Apple stores to collect online orders, see what's happening in store (uses trail markers, which we will likely see used in museums) and access product reviews. 

The next step is to link in payment and more personalisation to allow this technology to become the default way of engaging customers and allowing them to shop, without necessarily seeing a store associate.

So, what would you use in store?

Ben Davis

Published 13 August, 2014 by Ben Davis @ Econsultancy

Ben Davis is a senior writer at Econsultancy. He lives in Manchester, England. You can contact him at ben.davis@econsultancy.com, follow at @herrhuld or connect via LinkedIn.

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Comments (12)

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Zak

Interesting article. We're seeing similar trends in in-store interactivity and have built an eco-system around iBeacons, called proxitee. We've also put together a handy FAQ page regarding what they are and how they work : http://proxitee.com/faq/

Hope this sheds a bit more light on iBeacons.

Regards

about 2 years ago

Stuart McMillan

Stuart McMillan, Deputy Head of Ecommerce at Schuh

I think the biggest barrier to widespread adoption by many retailers is the whole app ecosystems.

I completely agree, It'll only be mainstream when customers can use their own device with this store technology, it's the device customers are most comfortable with. There's also a good chance that the customer can keep with the latest hardware faster than businesses can.

You then need that customer to have your app to interact with your in-store tech. As much as I love my local ice-cream shop, and can see the benefit in RFID enabled ice-cream flavours, I'm probably unlikely to download their app.

If I could be persuaded to download their app, that's probably most likely to happen in the store. I'm not going to be able to download it via 3G (all that refrigeration equipment interferes with the signal unfortunately), I'm probably going to have to try their free in-store wi-fi. Unfortunately I have to fill out 20 fields in a form about marketing before I can get on the wi-fi. By now I have forgotten which flavours I wanted...

Argos and Burberry are doing great jobs, it's just hard to picture how it is feasible for mere mortals...

Don't get me wrong, we do like the idea. We're first of all going to try a simpler web-based solution, which requires some manual data entry by customers to provision extra product information in-store, if that gets some traction then we might think further.

about 2 years ago

Ben Davis

Ben Davis, Senior Writer at EconsultancyStaff

@Stuart

Yep, unless retailers are intent on spending money, data capture in store is the thing to aim for. Ultimately this can be done with less friction, as you say.

The ice cream store should start a website so it can do 'Strawberry Split testing'.

about 2 years ago

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Zak

@Stuart McMillan : We currently add an in-store mode to a brands existing app.

Most modern brands have an m-commerce strategy which accounts for a large portion of their e-commerce revenue, so it makes sense to use that platform.

Most consumers loyal consumers will already have the app and can then take advantage of the personalised and exclusive location based offers.

about 2 years ago

Stuart McMillan

Stuart McMillan, Deputy Head of Ecommerce at Schuh

@Zak, sorry but I don't agree, I think for many smaller high street retailers apps just don't get traction compared to their mobile website. As a consumer, I would object to being forced to use an app over a mobile offering.

Case in point is a conversation I had on Twitter with a major high street bank, where I asked why their digital banking was virtually unusable on a mobile phone, their response was: "Unfortunately our main site log in is not compatible with mobile operating systems. This is why we developed the app. "

All the promotion of apps too often forgets the fundamental point that when you are most likely to be physically interacting with a brand (out on the high street) is the time you are least likely to want to be installing an app, mostly due to bandwidth, but also it's just so much easier to go to a website.

While I think digital interaction in physical environment is incredibly compelling, until it can be made more available to a wider audience I think it will continue to be a nice to have, not a must have. Which is a shame.

about 2 years ago

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zak

Wow, maybe I should try to help that bank out :)

There's always that challenge for businesses to pick the correct tool : Print vs Web only vs Mobile web vs Mobile app.

Anything new will provide additional choice, and every choice has its risks vs benefits. We embraced beacon technology because our clients were asking us for innovative ways to provide personalised content in a way that can enhance their in-store experiences. We find we can deliver this and a lot more via this technology.

Right now the technology does exist and it is possible to combine the physical and digital worlds. There's some limitations and some hurdles, but it is a real viable option.

As it and other services around the mobile space evolve it will make this technology one to keep an eye on.

about 2 years ago

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Jez

The rumours are that the next iPhone will have NFC.

Though I'm not an iPhone user, I would welcome the massive boost to NFC that their market share controls.

about 2 years ago

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Gavin Parkinson, Marketing and Sales Manager at Hitch Marketing Ltd

The data mining opportunities are most interesting for me; suddenly this tech enables a business to get into the minds of customers as they wander around the shop floor - what products are they most interested in, how do they get from a-b, and over time "why did they miss that product, when we know it's one of their favourite lines?".

about 2 years ago

James Gurd

James Gurd, Owner at Digital JugglerSmall Business Multi-user

Hi Ben,

Thanks for sharing the insights.

"It's hard to see NFC sticking around. RFID will always have a place and can be used well. iBeacons looks set to take over."

I don't agree. They're not the same thing, you can't compare NFC and BLE directly. As you point out at the beginning, NFC is two-way communication, BLE is simply a transmission. There is no interaction.

NFC has an advantage in mobile payment because it can work with existing POS technology, especially if a company is set up for contactless cards. Plus with Android support for HCE, no longer is NFC reserved to a very limited number of devices with NFC enabled chips. So device compatibility for NFC payment is increasing, albeit it with Apple abstaining.

Of course payment by BLE is feasible, it requires the app to be integrated with the store payment system so the signal from the BLE transceiver can trigger the app to send payment account info to the POS for the store staff to process the order without needing to take a card. But that's not necessarily going to be an easy ask. Plus BLE is dependent upon a customer having their device registered and bluetooth enabled - not everyone does.

So for me it's not NFC vs. BLE, it's a combination of how you use both to cover customer needs.

What may change my view on this is when Apple finally declare their hand in the m-payment space. If they succeed in building the ecosystem around BLE, it may shift the way companies think about mobile payment.

There's a brilliant paper on this by Mobilepaymentstoday:
http://www.mobilepaymentstoday.com/whitepapers/the-ibeaconble-vs-nfc-debate-now-the-truth/

thanks
james

about 2 years ago

Ben Davis

Ben Davis, Senior Writer at EconsultancyStaff

@James

Yes, apologies, I'm all for contactless cards. They will be accepted on the London Underground next month.

I should have said 'it's hard to see mobile NFC sticking around'.

I really don't think Apple will ever enable it, they'll do as you say, build around iBeacons.

Unless Apple use NFC, the education of users becomes really difficult. Why would retailers promote rewards and payment via a system that a large proportion of users can't use?

I'll come back here when the next iPhone launches and either issue a redaction or a victory cry :)

about 2 years ago

James Gurd

James Gurd, Owner at Digital JugglerSmall Business Multi-user

Ha ha. If a victory cry can you do that as an Indian Chief?

I'm convinced Apple won't turn to NFC, they want to own the ecosystem not be part of someone else's. But IMO that doesn't mean BLE will trump NFC, i just can't see it replacing, rather being complimentary to and the 'winning' solutions will be multi-channel offerings that factor in both solutions.

But don't ignore the Android/Windows market. In some countries, Android is dominant. Apple isn't the be all and end all for mobile, it's a dangerous assumption to make. I've seen mobile sites in the UK where Android has a better conversion rate and AOV than iOS, albeit of lower traffic volume. But the revenue is important.

I will come back with either a redaction or a yelp of unbridled joy!

cheers
james

about 2 years ago

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Oliver Pusch

While not all industries are the same, and not all customer contact is identical, do retailers really want prospects staring at their mobile devices during prepurchase, and not making a buying decision by trying on, or handling the actual item?

about 2 years ago

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