RFID System Helps Retailers Send Tailored Messages to Customers

By Claire Swedberg

Feb. 6, 2007—Consumer Vision, a startup in Mumbai, India, is launching an RFID-based system with a local retailer. The system will allow the store to communicate more directly with its customers. First envisioned by Indian Institute of Technology Bombay (IIT-Bombay) research fellow Rohit Nalwade, the solution involves retailers providing RFID tags (either in a key fob, card or other device) to customers willing to have the technology recognize them as they enter the store. The system automatically alerts the customers to sales or promotions they might find of interest.

Founded by recent college graduates and PhD fellows from IIT, Consumer Vision consists of seven full-time employees, including Nalwade, cofounder Shalender Singh and several college interns. The company is housed in the Society for Innovation and Entrepreneurship (SINE), a business incubator hosted by IIT-Bombay that provides support for newly developed companies. Nalwade developed the idea of an RFID-based service for the retail sector in 2003. He and Singh organized the company in 2005, then began developing hardware and software after conducting a survey of 1,600 retailers and consumers in India.

Rohit Nalwade

"What we found was that some customers had privacy concerns, and we heard what they said," Nalwade explains. "We went to big cities and towns and collected all the information we could." The company realized that the system would be most marketable in high-end retail environments in which customers agree to participate in the program, allowing the store to collect data about their purchasing history in exchange for details about products and promotions they might find interesting.

An unnamed Mumbai apparel retailer will pilot the system within the next three weeks, Nalwade says. If the pilot goes as planned, it will lead to full-scale deployment, though the dates have not yet been decided.

The system includes passive 13.56 MHz RFID tags, compliant with the ISO 15693 standard. These tags are embedded in cards or key fobs containing the customer's ID number. That ID number can then be associated with the customer's spending history and demographic data stored in the retailer's back-end system.

Upon entering the store, Nalwade explains, customers pass an RFID reader and antenna developed by Consumer Vision and built by an unnamed Indian manufacturer. The interrogator captures the tag ID number, then sends it through a wireless or cabled connection to the store's back-end system or a server. Consumer Vision is supplying the software that allows the data mining that follows.