Feb 12, 2015The NFC Forum, a nonprofit industry association dedicated to advancing the use of Near Field Communication (NFC), has released the results of a survey that finds U.S. consumers have strong interest in using NFC technology for a variety of applications. The survey, carried out online, asked 1,038 participants about their interest in using NFC in six different retail scenarios: accessing store deals and rewards; accessing information about merchandise and store inventory; downloading other product-related information, such as a recipe; accessing a digital shopping cart; gathering information about large, expensive products; and ordering related consumables, such as printer ink and toner.
In five of these use cases, the survey showed that more than twice as many consumers preferred NFC to the leading alternative.
The survey also asked consumers about which kinds of information they would be willing to share in order to receive personalized rewards and deals via NFC.
The results of the survey, undertaken by research firm Strategy Analytics in September 2014, were released in a report titled "NFC Technology: How Changing Consumer Preferences Create New Opportunities for Retailers." The report concluded that the time is right for retailers to begin NFC deployments, according to the consortium, based on the quantity of NFC-enabled smartphones in consumers' hands, as well as their perceived interest in the technology as expressed by the study's participants.
The NFC Forum was formed in 2004 by a group of mobile communications, semiconductor and consumer electronics companies. Its mission is the advance of NFC usage through the ensuring of interoperability, specifications development and education.
The survey did not attempt to determine the number of NFC deployments that already existed, or how many NFC-enabled phone owners actually use this built-in functionality. The quantity of NFC deployments and users is low, says Christopher Dodge, the associate director of Strategy Analytics' user experience practice, though he notes that while NFC awareness is relatively low, the survey was fielded prior to Apple's launch of ApplePay, which has likely had a positive impact on consumer awareness and use of NFC since that time, he speculates.
Windsor Holden, the head of forecasting and consultancy at U.K.-based analytics firm Juniper Research, says that while the ApplePay program does not directly affect deployments of NFC technology for non-payment applications, such as product promotions by retailers or brand owners, it has raised consumer awareness. "We believe that, fueled by Apple Pay/Passbook in the U.S., [the non-payment NFC sector] should see around 50 million NFC coupons redeemed annually by 2018," he says. "As more people utilize NFC for payment and gain affinity with it, so the wider retail opportunity [for NFC] opens up." Of the NFC-enabled handsets currently in the marketplace—approximately 320 million by the end of 2014 worldwide—about 4 percent of those, he adds, were used for NFC-based contactless payments in the United States, while the contactless payment usage rate was higher in Europe: 12 percent.
The consortium undertook the survey, according to Matthew Bright, the NFC Forum's Retail Working Group chairman and the head of technical marketing at Thin Film Electronics' NFC Innovation Center in San Jose, Calif., because it wanted "to inform the decisions of retailers. We want to give them some clues where they should start their campaigns."
Prior to carrying out the Internet-based survey, Strategy Analytics conducted a week-long focus group involving a simulated store environment in San Diego, in which 36 participants tested NFC tags on posters and products, as well as played a game to become acquainted with NFC, since most were somewhat unfamiliar with the technology and required some instruction to understand how the phones could be used to read NFC tags. The game had a second purpose as well—to measure how long it took to use each of three different smartphone technologies: NFC, QR codes and URLs accessed via the smartphone's built-in Web browser. The participants were loaned Samsung S5 phones for the game, which consisted of five QR codes, five NFC tags and five URLS, each of which would allow them to access a website that displayed a single letter of the alphabet on their phones. Users were instructed to use each of the three technologies to open the pages.
For NFC, participants needed to tap the phone near the reader, causing the phone to access a Web-based landing page that displayed a specific letter of the alphabet. For QR codes, they scanned the code with their phone's built-in camera, and were thus directed to the same landing page, while in the third scenario, individuals typed in a URL to access that page. The five different letters displayed using each technology could be used to form a word. Researchers timed how long it took for participants to spell out the word using each technology.
"For each experience, we tried to provide the most realistic setting possible," Dodge says, "including using actual products, proper product signage and displays, and working landing pages when a participant tapped NFC or scanned a QR code." The order in which the differing technologies were employed, he notes, was changed for each user. On average, Dodge reports, it took NFC users 47 seconds to complete the task, while 61.6 seconds were required for QR codes and 159.8 seconds when inputting a URL.
Bright notes that the timing game was played by individuals who were using the technology for the first time. "After they learn NFC and have a little experience, it is much faster than QR codes, faster even than what was first observed," he says. "But we can say, with confidence, that users found NFC much faster than QR, even when trying it for the very first time."
Following the game, participants used their phones to capture information about products via the three technologies. They were then asked how satisfied they were with their experiences using NFC, QR codes and URLs. Overall, 76 percent of the 36 participants said they were very satisfied with NFC, while half indicated they were satisfied with QR code use. The entry of URLs was not preferred. The focus group's participants indicated that speed, convenience and control were the benefits of NFC technology.
The NFC Forum reports that one billion NFC-enabled handsets will be shipped worldwide this year. However, Bright says, because there are few NFC-enabled deployments, consumers are still largely unfamiliar with the technology, and retailers have yet to identify the most effective NFC applications. Still, he adds, the participants' responses to the survey provide some clues.
Seventy-four percent indicated they were interested in using NFC to view coupons and specials or other store offers. In exchange for these deals, they said they would be willing to provide personal data, such as gender, zip code and age, as well as their history of coupon use. However, they did not want to share family or occupation information. In the case of using NFC to gain product info, 77 percent expressed some interest in using the technology in this way, while 45 percent said they would be very interested. The product info use case could include, for example, providing inventory data regarding other colors and sizes available for a specific item, such as a pair of shoes, or accessing videos about that product.
When it comes to using NFC to access related product information, 64 percent of respondents reported having some level of interest. This could include viewing information about accessories for a particular clothing item, or recipes to match a kitchen product. A digital shopping cart would allow shoppers to create an itemized list of their planned purchases before proceeding to the point of sale. Sixty-six percent of the respondents indicated interest in this use case, especially when it included applying coupons or rewards to purchases on their digital cart automatically.
Although there may not yet be any deployments that use NFC technology to help consumers gain information as they decide on a large-item purchase (a car, for instance), 73 percent of the survey respondents were interested in this application, Bright says. In this case, they could, for instance, watch product videos, obtain warranty information, and read consumer reviews and energy guides before paying for something such as a washing machine.
Finally, NFC technology could also be utilized after a purchase has been made, provided that the NFC tag stays with the product. This was one of the scenarios that the 36 participants tested during the survey—by tapping an NFC tag on a printer to identify its model number and the exact type of print cartridges it uses. They could then use their phone to order that cartridge. Forty-five percent of respondents said they were "very interested" in this use case.
According to Bright, the NFC Forum might carry out similar studies in other countries, if retailers and brand owners in those regions show a strong interest in such surveys.
