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Digital In-Store Ad Network Works With RFID

Three California businesses will test the Novitaz Digital Ad Network, using battery-powered 433 MHz RFID loyalty cards to identify customers and provide promotional text messages offering discounts.
By Claire Swedberg
Oct 05, 2010Novitaz, a company that provides marketing research services to the retail and hospitality industries, is preparing to launch a loyalty card containing an active 433 MHz RFID tag complying with the ISO 18000-7 standard. The NovitazInside Card would enable brands and retailers to provide targeted promotional offers and discount coupons to consumers, based on their spending habits.

The cards are part of the Digital In-Store Ad Network solution that Novitaz plans to introduce in early 2011 at two clothing-and-accessory stores, as well as at one restaurant located at Santana Row, a shopping mall located in San Jose, Calif. If the system works as expected and is well-received by the stores and their customers, Novitaz hopes to make the deployment permanent, add additional Santana Row stores into the network, and begin marketing the solution to retailers nationwide.

Inside the Novitaz card is a battery-powered 433 MHz RFID tag.

Novitaz has been working on the solution since the company was founded in 2003. Only now is the technology ready for use by consumers, says Jayant Ramchandani, the firm's COO, following years of research and development to identify and then build the appropriate technology. With the resulting system, an RFID interrogator detects when a cardholder enters a participating store, by reading the ID number being transmitted by the active RFID tag of that person's card. The interrogator then forwards that card number to the Digital In-Store Ad Network software, where the cardholder's spending habits can be analyzed and matched with appropriate marketing offerings, such as price reductions or complimentary products or services. The software sends those offerings to the cardholder's cell phone, in the form of text messages. The shopper can then use his or her phone to redeem those offers in the store.

During development, Ramchandani says, Novitaz sought the appropriate technology for an electronic loyalty program that would offer personalized savings in a manner similar to how the Internet functions. The company determined that an active RFID tag was the only technology that could transmit data without requiring a consumer's participation, such as swiping a card or presenting it to a reader. With an active tag, he explains, the shopper could simply walk through the store's entryway, carrying the card in her wallet inside a purse or bag, and receive personalized marketing. The system at Santana Mall is expected to go live on Jan. 15, 2011.

At each of the three participating locations, Novitaz will install its own RFID readers and antennas, in order to read cards as they pass through the door. The restaurant and two retailers will not pay for that installation, or for the hardware required. Each business will receive 500 cards to distribute to its regular customers, who then register their card by providing the retailer with their name, address and cell phone number. The store then passes that information to Novitaz, which saves the data on the Digital In-Store Ad Network software running on its own server, where it is linked to an encrypted ID number encoded on the tag.

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