Concept Store Delivers Product Content via NFC, RFID

McKinsey and Mall of America have teamed up to offer a store where shoppers can explore content about products using hot spots, touch screens and magic mirrors, along with UHF RFID-based inventory management.
Published: December 30, 2019

Mall of America‘s shoppers are browsing through products at a new high-tech concept store known as the Modern Retail Collective, which serves as a bridge between digital and physical shopping. The concept store, provided by management consulting company McKinsey, and Mall of America, enables a series of retailers to promote and sell their products for limited times. With touch screens, a magic mirror and mobile “hot spots,” the store also serves as a laboratory for new technologies.

Near Field Communication (NFC) tags provide a link between digital shopping and the physical store, by delivering content to shoppers on site as they browse through goods. The NFC RFID tags serve as the store’s hot spots, where customers can tap tags to learn more about a product, thereby making the shopping experience more interactive. The system leverages Smartrac NFC 13.56 MHz tags compliant with the ISO 14443 standard.

For shoppers, the new store is offering the best of both the digital and physical retail worlds, says Gerry Hough, McKinsey’s senior expert for store innovation: “in-person product discovery, digital ‘endless aisles,’ on-demand service and tactile experiences within a highly social environment.” The premise, she explains, is to strike the right balance between product, technology and human interaction, as well as to measure the impact for brands even beyond the store. It features a handful of brands that will be “refreshed” periodically, along with technologies to facilitate new use cases.

Gerry Hough

During the past few years, Hough says, McKinsey’s clients have been seeking ways in which to incorporate the latest technologies into their stores, in order to create the most positive impact. However, she adds, the technology landscape continues to fragment, and many pilot programs can be too costly or difficult to fully integrate and measure. To solve this business problem, McKinsey built the concept store, which serves as a physical environment in which product brands can showcase and test new technologies, as well as learn what resonates with their customers, before implementing at scale in permanent locations. Hough thinks of the site as a learning lab. McKinsey has an 18-month lease for the space, but the company envisions extending the concept if the retailers gain significant value from the experience.

The first installment of the concept store allows Mall of America’s shoppers to interact with and purchase products from Elevé Cosmetics, Kendra Scott, ThirdLove and type:A Deodorant. This first installment of the store is focused on products for women, from brands founded by women. That theme, Hough says, is something of which the company is quite proud. “We’re also excited to bring some digitally native brands to physical stores,” she states, “so that customers can interact with them in a new way.”

In addition to NFC-enabled hot spots, the store features digital screens throughout the sales floor on which content can be viewed, while magic mirrors allow shoppers to view the products they try on with other accessories. With the use of hot spots, the store is designed to enable patrons to browse through content about specific products. McKinsey applied NFC-enabled labels throughout the store to uniquely identify each product. The goal was to allow shoppers to access the types of data on their smartphones that they could typically find online, and without the need for an app.

Customers can simply approach the NFC labels, indicated as “hot spots,” then tap their phone against the labels. The NFC reader in the phone captures the ID number of each label, which in most cases is linked to a URL that the phone then accesses, thereby allowing shoppers to view a variety of content, ranging from product details to reviews. Going forward, the team envisions expanding the capabilities to create a more fully integrated mobile shopping experience, while also offering separate content accessible to devices used by sales associates—offering product training or selling tips, for instance.

Modern Retail Collective features two other point-of-sale options: Square and cryptocurrency. “The first uses Square mobile point-of-sale to check out anywhere in the store,” Hough says, while the second utilizes cryptocurrency via Flexa, which lets customers pay for their products using multiple cryptocurrencies. “Over time,” she states, “we plan to incorporate further mobile and self-checkout options using this platform.”

The store also employs 10 sales associates, including full-time and part-time individuals, and is staffed by Mosaic, a third-party company that provides staffing for stores at Mall of America. These associates help customers learn about the technology and provide support for purchases, if needed.

Sales associates use UHF RFID technology to expedite and improve the accuracy of on-floor product replenishment. They can quickly understand where products are located on the sales floor, in the back room or in a fitting room, and which products need to be replenished on the floor. The tags are read by ceiling-mounted RFID reader antennas to automatically tabulate inventory counts by zone, as well as to create a replenishment list when floor stock levels don’t meet pre-set thresholds.

Kendra Scott’s Color Bar uses UHF RFID to deliver content to shoppers regarding the company’s designer jewelry. Customers can select an RFID-tagged colored stone, and a digital display provides what the store calls a customizable product exploration experience. Shoppers can browse through content about the jewelry across categories that match the color of the stone they placed on the reader. They can then choose either to purchase the item from the store or to do so online and have it delivered to their home. In addition, customers can create a virtual shopping cart based on the products they select, then complete their purchase via phone or directly at the store with a sales associate.

McKinsey built a data repository on Azure that stores information from the multiple data sources in the store to understand end-to-end impacts, Hough says. This includes traffic and flow patterns from the UHF readers, customer feedback from surveys, and individual session data from customer-facing technology activations, in order to help the company make improvements.

The store’s magic mirror does not currently use NFC technology. As customers approach the mirror, it automatically overlays jewelry and allows them to quickly “try on” different colors and styles, which can be particularly difficult to do with physical jewelry. They can also take photos and email product information to themselves so they can make online purchase.

What’s more, the system includes two digital touchscreens for Kendra Scott’s Color Bar, two magic mirrors for Kendra Scott’s virtual try-on system, three touchscreens for ThirdLove’s Fit Finder and one large screen that showcases type:A’s digital video content. “We are testing these alongside our NFC-enabled mobile experience,” Hough states, “to provide more engagement options to the customer and to understand how customers interact with each.” To date, she says, “We’re thrilled with the initial response to the store and the customer engagement.” Going forward, as new retailers utilize the space, some of the technology infrastructure will stay the same, Hough reports, though it may change based on the requirements for each retailer and the results of the initial deployment.

Modern Retail Collective is a first-of-its-kind retail store, according to Amir Khoshniyati, Smartrac’s industry and customer marketing manager. “It’s a great opportunity for us to participate from the start,” he says, “and [to be] selected as NFC technology partner.” Smartrac believes concept stores offer a successful alternative to traditional shopping, he adds. “Especially for younger generations, it is a matter of course to be permanently online and to use smartphones to support purchase decisions. These customers are familiar with using digital technology to explore and interact with potential purchases.” These kinds of retail experiences can drive shoppers to brick-and-mortar stores, he adds.

Khoshniyati cites several other projects, including Tokyo-based startup Aquabit Spirals, which is using Smartrac’s BullsEye and Circus NFC tags in many of its self-adhesive SmartPlate products sold to retailers to take physical, in-store products online. And a Japanese supermarket chain is employing SmartPlates to offer recipes related to selected ingredients, as well as other customized content based on a user’s behavioral history. Users can simply tap their phones against the plate to view data about products being sold at that location.

Other stores are deploying their own dedicated, interactive mobile hotspots throughout the store as well, Khoshniyati says. “The technology is also being explored for use for mobile purchase,” he explains, “reducing the queues and including cryptocurrency capabilities.”