Sep 29, 2009Orlando, Fla., startup company MoLo Rewards is in talks with several retailers and consumer packaged goods (CPG) providers to launch a new RFID tag system it has developed that would act as a universal loyalty card and rewards program for consumers. By signing up for an RFID tag linked to data stored on a MoLo Rewards server, customers could obtain coupons and savings, as well as acquire loyalty points. The electronic system is designed to help retailers and CPG suppliers sell products by providing paperless coupons that patrons can redeem at contactless point-of-sale (POS) terminals.
The company announced the system last week, and is currently in discussions with dozens of businesses to either pilot or deploy it throughout the United States, says MoLo Rewards' CEO, Robert Sprogis, who founded the company with his father, Peter Sprogis, the firm's chairman. The passive 13.56 MHz high-frequency (HF) RFID tags would be offered either at a store location or via the MoLo Rewards Web site, and companies could upload coupons onto the server. Customers would then receive those coupons and other promotional offers, and tap a tag at the POS terminal to have those discounts applied to their purchase.
The system is initially available in an RFID tag sticker containing an NXP Semiconductors Mifare UL RFID tag that could be attached to the back of a cell phone, Sprogis says. Eventually, he adds, when NFC-enabled phones become commonplace, the tags would no longer be necessary.
For the time being, however, the system works like this: When a consumer signs up for the loyalty card program—either at a store or on the MoLo Rewards Web site—he provides his name, e-mail address, phone number, date of birth and home address, and receives a sticker containing an RFID tag encoded with a unique ID number. That personal data, along with the tag's ID number, is stored on MoLo Rewards' server, and would be inaccessible to retailers or CPG companies, thereby maintaining the user's privacy.
MoLo Rewards would monitor the customer's purchasing behavior, however, and use that information to provide reports to the retailer or CPG supplier, detailing the demographic characteristics (such as age or gender) of the MoLo customers purchasing their products. Customers can access their account either on the Internet or via their cell phone, Sprogis says. If a consumer accumulates sufficient reward points, a gift can then be sent to his or her address.
When the tag is used, the customer taps it at a contactless point-of-sale terminal, which forwards the tag ID number to MoLo Rewards' server. The coupon is then approved and forwarded to the store's POS terminal, which applies the discount to the sales amount. If the user also participates in a MoLo Rewards points program, the added points—based on coupon use—are added to his or her account.
"As NFC moves into the picture, we can have a little more fun with the technology," Sprogis states. In this case, because the phone can act as both a tag and a reader, RFID tags can be placed on posters, for example, which MoLo Rewards' users could then access by tapping the phone against the poster, thereby enabling them to download coupons, tickets, schedules or other information.
The initial rollout, Sprogis says, is likely to take place most commonly with stores that already have contactless payment terminals. These, he notes, include larger retail chains across the country, as well as smaller mom-and-pop stores in such urban areas as New York City. Sprogis says he has had "a very positive response so far" from the retailers and CPG suppliers he has contacted. His firm, he says, is intent on providing a clear return on investment for companies that adopt the MoLo system, and is therefore working out creative solutions to ensure that occurs.
In some cases, Sprogis says, stores would pay a fee based on the number of coupons used by customers, or the cost could be based on a monthly model. Either way, he notes, there would be no charge to consumers. "No two stores are the same, so we're remaining flexible," he indicates. "It's all about the ROI for retailers or CPG makers."
According to Sprogis, the company's goal is to have the system in use by the first quarter of 2010.
