RFID and the Retail Experience

At the National Retail Federation trade show, several companies showed off RFID solutions that focus on supply-chain efficiencies, but those that focused on the customer experience created real buzz.
Published: March 9, 2007

Retailers have been pitched radio frequency identification primarily as a tool to boost sales by reducing out-of-stocks. Several RFID companies showed off solutions for retail at this week’s National Retail Federation (NRF) trade show in New York.

Alien Technology, OATSystems and Paxar showed off a system for using Paxar labels with Alien inlays and OAT’s software to improve replenishment and reduce out-of-stocks. IBM and Vue Technology showed off a similar system with Vue’s antenna technology embedded right in the shelf.

Motorola, formerly Symbol Technologies, showed off a variety of applications. One was a shelf display presented with Vue. Another was a replenishment application with Motorola’s mobile RD5000 reader on a cart. The system used OAT’s software to identify items on the cart that are being brought out for replenishment. As the cart approaches a rack of clothes, the interrogator can identify the items on the rack, compare them to what’s supposed to be there and prompt the store employee to replenish the right items. In addition, Motorola displayed back-of-store and dressing-room applications, created with Attevo.

These applications received a lot of interest, but it was the use of RFID to improve the consumer experience that really generated buzz at the event. Paxar demonstrated the magicmirror we wrote about recently (see Magicmirror Could Assist Retail Customers), and the reaction of many was “Very cool.” When a customer holds up an item in front of the mirror, he or she can get information about the item. The mirror can also attempt to up-sell the customer by showing a variety of accessories, or it can play advertisements for unrelated items.

One feature I related to was the ability of the mirror to help out when you’re in the changing room with an item that doesn’t fit. I always tell myself I’m still a 32-inch waist, but invariably have to go back out to the floor for a larger size. The system lets you touch an image of a button on the mirror that says “larger size” (or “smaller size”) and someone will bring it to you, saving you the trouble of putting on your pants or calling desperately for your wife (who has wandered away) to bring you a larger size. (You also don’t have to hear her say: “I told you you’d never fit into those.”)

A lot of stores show videos to create an ambiance while you shop, but the streaming content lets you provide content related specifically to an item picked up because the mirror has identified it through the RFID tag in the label (which is cut off after you buy it). I was struck by something the person demonstrating the mirror said: “You don’t have to just stream out a lot of dumb content; the content is smart.” He explained that the system could show how to accessorize the item with accessories that are in stock.

“How do you explain the technical features of Gore-Tex, or that this is an environmentally friendly product?” he asked. “You can do it through a short video that relates specifically to the item.”

The most impressive demonstration of how RFID could be used to improve the customer experience was IconNicholson‘s “social-retailing” application, developed by Nannette Lepore who was interested in reaching a younger audience. Icon watched how young people shop and found they tend to be very collaborative, in that they will ask friends for advice before making a choice.

Icon’s social-networking system lets young shoppers take photos wearing the item they’re considering buying. They can then connect to the Internet and e-mail the photo to someone in their cell phone or PDA address book. That friend could then text message back comments about the item, which would be displayed on the mirror in front of the shopper. A person in a remote location could even purchase the item with a couple of clicks.

It’s not yet clear that “social retailing” is the wave of the future, or even that the magicmirror will prove to be a winner. What is clear is that RFID vendors and their partners are listening to retailers and hearing that they want to use RFID to make sure goods are on the right shelf at the right time, but they also want to use it to improve the customer experience. They want to use it as a technology that delivers more value to the customer and increases sales. It’s a phenomenon that will catch on in one form or another, because competition is going to require retailers and manufacturers to find ways to enhance their products. Frankly, I’m looking forward to the enhanced RFID shopping experience.