More RFID Journal Sites: RFID Journal Espanol RFID Journal Brasil RFID Journal Events RFID Journal Awards
RFID JOURNAL
Text size:
T
T
T
Another concept Prada is experimenting with is merging the online and offline channel. Once George has helped you pick out a few items you want to try on, they are brought to the dressing room and placed in a smart closet. Prada plans to offer a system where the sales associate creates a session for you and everything you hang in the closet is identified. If you want, you can save the information in your personal database. The idea is the next day, when you have time at work, you can go online to a special Web site created for top customers and see the items in your "digital closet."
You will be able to get more information about the items or see related products. You can't actually order anything and pay with your credit card, since Prada wants the relationship to be personal. But there is a tool that lets you message sales associates. You can tell them that you'd like to come in and try on a few related items you found on the Web, or arrange for you to pick up the handbag you picked out for your wife at the store. This lets Prada maintain the customer relationship even when you aren't in the store.
"There will be a series of tools that will be on the Web that will give customers access in different ways, and these will change over time," says Eckfeldt. "As Prada develops new ideas, there will be new things that will let people experience the collection in new ways."
But how do these concepts work in practice? Here are some observations made after spending some time in the store:
The Prada store has been open six months, and it is perhaps unfair to draw too many conclusions. But it's worth pointing out some observations. First, if RFID is to be used as a sales tool, salespeople must be trained in how to use the software that is supposed to add value and they must be comfortable with it. I spent a couple of hours in the Prada store over the course of a few days, and I never saw one of the staff pick up a handheld device. One salesperson I spoke to in late April didn't even know he could scan a tag and show information about the item on the video screen.
Prada says the staff is now trained to use the technology, but it may take some time for both customers and staff to get used to it. Staff turnover is as common in retailing as returns, which means training has to be continuous. Any retailer considering a system like Prada's should factor that into their costs. It will also be important to have very intuitive software.
The basic concept, however, of being able to scan an item and learn more about it is a good one. Some customers might like staff to have that information at their fingertips and some may prefer to use kiosks on their own.
This could be an incredible sales tool. Imagine smart technology that recommends an accessory based on your personal history or based on what other customers who looked at similar items bought. If you have purchased a lot of items with earth-tone colors recently, the system could automatically show you new shirts and slacks in brown or olive. This isn't easy to do successfully – just look at how many companies have failed in attempts to personalize the online shopping experience.
The ability of staff to know exactly what's in stock is key. Prada didn't say why they didn't go ahead with the wireless network, but the ability to communicate with someone in the backroom via wireless handheld device is an obvious improvement on current retailing technology. It will be a few years at least before retailers can get accurate inventory information via RFID tags. By that time, wireless technology may come down in price to the point where every store can use it in this way. The concept makes so much sense it seems inevitable that this will become standard retailing procedure one day.
Prada's attempt to integrate a personal Web site with the retail channel is an interesting concept, but it's difficult to say whether it will catch on. Clearly there will be a melding of online and offline channels, and retailers will discover what works only by experimenting. RFID could have a role to play here because it can link specific items to specific customers, making it possible to track not just what people bought, but what they looked at.
Interestingly, Prada doesn't use RFID to make sure that the items are in the right place on the shelves or racks. But it doesn't have 90,000 SKUs like your typically Wal-Mart, so this isn't a big problem. And it doesn't use RFID tags for security. Again, that's not a big issue. RFID only helps thwart shop lifting when it can signal someone has just swiped 20 Atra razors. It's unlikely that anyone is going to scoop up 20 Prada handbags or pairs of shoes.
It's hard to imagine a lot of retailers running out tomorrow to install systems like this. For one thing, the tags Prada uses probably cost close to $1 with the inlay and adhesive backing to put them on items. Second, the aim here is not to cut supply chain costs; it's to improve service.
In two years, Prada may be up-selling enough customers using the system to get a return on its investment. But other retailers, particularly in the current economic environment, are going to wait until that case is proven. But this is the direction retailing is going to move in. Now is a good time to start learning about the technology and the changes in business processes that it will bring.
Learning from Prada
Another concept Prada is experimenting with is merging the online and offline channel. Once George has helped you pick out a few items you want to try on, they are brought to the dressing room and placed in a smart closet. Prada plans to offer a system where the sales associate creates a session for you and everything you hang in the closet is identified. If you want, you can save the information in your personal database. The idea is the next day, when you have time at work, you can go online to a special Web site created for top customers and see the items in your "digital closet."
|
| Related items can be displayed on video screens |
You will be able to get more information about the items or see related products. You can't actually order anything and pay with your credit card, since Prada wants the relationship to be personal. But there is a tool that lets you message sales associates. You can tell them that you'd like to come in and try on a few related items you found on the Web, or arrange for you to pick up the handbag you picked out for your wife at the store. This lets Prada maintain the customer relationship even when you aren't in the store.
"There will be a series of tools that will be on the Web that will give customers access in different ways, and these will change over time," says Eckfeldt. "As Prada develops new ideas, there will be new things that will let people experience the collection in new ways."
But how do these concepts work in practice? Here are some observations made after spending some time in the store:
The Prada store has been open six months, and it is perhaps unfair to draw too many conclusions. But it's worth pointing out some observations. First, if RFID is to be used as a sales tool, salespeople must be trained in how to use the software that is supposed to add value and they must be comfortable with it. I spent a couple of hours in the Prada store over the course of a few days, and I never saw one of the staff pick up a handheld device. One salesperson I spoke to in late April didn't even know he could scan a tag and show information about the item on the video screen.
Prada says the staff is now trained to use the technology, but it may take some time for both customers and staff to get used to it. Staff turnover is as common in retailing as returns, which means training has to be continuous. Any retailer considering a system like Prada's should factor that into their costs. It will also be important to have very intuitive software.
The basic concept, however, of being able to scan an item and learn more about it is a good one. Some customers might like staff to have that information at their fingertips and some may prefer to use kiosks on their own.
This could be an incredible sales tool. Imagine smart technology that recommends an accessory based on your personal history or based on what other customers who looked at similar items bought. If you have purchased a lot of items with earth-tone colors recently, the system could automatically show you new shirts and slacks in brown or olive. This isn't easy to do successfully – just look at how many companies have failed in attempts to personalize the online shopping experience.
The ability of staff to know exactly what's in stock is key. Prada didn't say why they didn't go ahead with the wireless network, but the ability to communicate with someone in the backroom via wireless handheld device is an obvious improvement on current retailing technology. It will be a few years at least before retailers can get accurate inventory information via RFID tags. By that time, wireless technology may come down in price to the point where every store can use it in this way. The concept makes so much sense it seems inevitable that this will become standard retailing procedure one day.
Prada's attempt to integrate a personal Web site with the retail channel is an interesting concept, but it's difficult to say whether it will catch on. Clearly there will be a melding of online and offline channels, and retailers will discover what works only by experimenting. RFID could have a role to play here because it can link specific items to specific customers, making it possible to track not just what people bought, but what they looked at.
Interestingly, Prada doesn't use RFID to make sure that the items are in the right place on the shelves or racks. But it doesn't have 90,000 SKUs like your typically Wal-Mart, so this isn't a big problem. And it doesn't use RFID tags for security. Again, that's not a big issue. RFID only helps thwart shop lifting when it can signal someone has just swiped 20 Atra razors. It's unlikely that anyone is going to scoop up 20 Prada handbags or pairs of shoes.
It's hard to imagine a lot of retailers running out tomorrow to install systems like this. For one thing, the tags Prada uses probably cost close to $1 with the inlay and adhesive backing to put them on items. Second, the aim here is not to cut supply chain costs; it's to improve service.
In two years, Prada may be up-selling enough customers using the system to get a return on its investment. But other retailers, particularly in the current economic environment, are going to wait until that case is proven. But this is the direction retailing is going to move in. Now is a good time to start learning about the technology and the changes in business processes that it will bring.
- Previous Page
- 1
- 2
- 3
