RFID Moves Beyond Tracking

By Mark Roberti

Companies are now using the technology to better manage their relationships with customers, and to enhance the value of their products.

Radio frequency identification has reached a new phase in its evolution. You could call it the "post-tracking" stage. To be sure, this stage is just beginning, and it will take years before it fully flourishes, but two case studies presented at last month's RFID Journal LIVE! 2009 conference revealed how the technology's evolution will progress.

One case study was presented by Robert Urwiler, CIO of Vail Resorts, which operates five of the 10 busiest ski resorts in the United States (see Vail Resorts Sees RFID in the Forecast). I was a little concerned that people would see his presentation as relevant only for ski resort operators, which is not a big audience for us. But the RFID deployment was not so much about operating a ski resort, as it was about customer relationship management and improving the customer experience. Urwiler's session was well attended, and many were impressed with Vail's strategic approach. The company also happened to win the 2009 RFID Journal Award for best use of RFID in a service (see Voegele, Vail, FOCUS and ODIN Technologies Win RFID Journal Awards).




Vail developed an Easy Scan system to verify customers' ski lift passes. The company deployed RFID interrogators at the base of the mountain where skiers and snowboarders get on ski lifts, and farther up the mountain, where special lifts take visitors to terrain parks, back bowls and other areas. The system has increased fraud detection by 100 percent, Urwiler told attendees, because it's tied into a back-end database that enables staff members to detect when people are sharing badges.

But what's more compelling about the deployment is that Vail Resorts is utilizing the RFID data for marketing. If, for instance, a snowboarder spent much of his time on one of the resort's seven official bowls, marketers could send him enticing e-mail promotions focused on those bowls. And if a skier spent more of her time in the terrain parks, the marketing team could entice her with information regarding enhancements to those parks, such as new trails. This type of information is critical at a time when consumers are cutting back discretionary spending, and when competition for vacationers is intense.

"When you are 10 percent above forecast, no one looks at the data and asks why we exceeded our forecast," Urwiler told the LIVE! audience. "When you are 10, 15 or 20 percent below forecast, everyone wants to know why. We're pleased that we have the [RFID infrastructure] in place to gather data, so that in the future, we will be able to improve our marketing campaigns and achieve better conversions."

The system also improves the customer experience. Guests are issued RFID-enabled lift tickets, so they no longer need to remove their gloves and fumble for passes—a convenience that helps differentiate Vail from other ski resorts. (On Wednesday, May 13, RFID Journal will offer a free webinar detailing Vail Resorts' deployment; for more information, or to register, please click here.)

Product differentiation is what the other case study I want to highlight is all about. It was a session in our pharmaceutical track, titled "LuproLink Case Study: Using RFID as a Product Differentiator." The presenter was Daniel J. Winters, senior project manager of Abbott, maker of Lupron Depot—a drug used to treat prostate cancer in men, as well as breast and ovarian cancer in women.

Lupron Depot is available in generic form, so it was becoming a commodity, and Abbott wanted to differentiate its version of the drug from the cheaper generics. To that end, Abbott worked with 3M Track and Trace to develop a system, known as LuproLink, that allows doctors and clinics to track the drugs and check their authenticity online. The drugs are tagged with high-frequency (HF) inlays from Texas Instruments, while 3M hosts the database.

During the pilot phase, Abbott asked the clinics how they were tracking their Lupron Depot inventory, and learned that in many cases, this was done manually, using pen and paper. 3M helped Abbott develop a very simple software program that the clinics could run on their own computers, to check inventory and order additional Lupron Depot when necessary. The system enables clinic operators to generate reports on inventory levels at one clinic, or across 20 satellite clinics around a city.

"You can double-check that you billed accurately for every injection you gave," Winters explained. "This is saving thousands of dollars per month [in lost revenue]. It eliminates business errors for big customers, and enables clinics to sort patients by who is due for their next injection, so they can be sent a reminder."

LuproLink has proved to be very popular with the clinics—and very successful for Abbott. In a survey conducted by Abbott, fully half of those using the system who responded said they were "extremely satisfied" with the RFID-enabled LuproLink system. Moreover, Abbott says, some clinics using competitive products are switching to Lupron Depot so they can take advantage of the system. As a result, Abbott has seen sales of Lupron Depot rise 3 to 4 percent over sales to customers that don't use LuproLink. The firm has been able to use RFID to differentiate its product, increase customer loyalty and stem the erosion of the drug's market share to cheaper generics.

There were many great case studies at LIVE! 2009, and I don't want to do a disservice to any of them. But these two highlighted the beginning of a trend toward employing RFID not just to track products and assets, but to add real value to existing products and services, or to differentiate them from competing offerings. In the years to come, I'm sure we'll see many other creative ways to use the technology at our RFID Journal LIVE! events.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog or click here.