There was a lot of passionate response to the post a few weeks ago “Will Mobile Phones Replace In-Store Retail Salespeople”. Even more reason that these three announcements this week caught my eye:
- The Aberdeen Group published a report that stated in 2008, the total of digital signage market revenue stood at $766 million and is expected to reach $2.2 billion by 2014, growing at a healthy CAGR of 20%.
- The London Daily Mirror reported according to unnamed sources that Nokia is planning to begin rolling out embedded NFC (near field communications) kits into its entire line of Symbian phones beginning Q3, 2010. The Finnish giant already has NFC in selected handsets, such as the 6216 Classic.
- Malaysian manufacturer Fonelabs will produce two million low cost (under $100) NFC enabled phones in 2010
What do these three items have to do with retail? First, just as a refresher, Near Field Communication (NFC) is “a short-range high frequency wireless communication technology which enables the exchange of data between devices over about a 10 centimeter (around 4 inches) distance.” In other words, if you have an NFC enabled phone and opt-in, your mobile phone will be able to communicate with another proximate electronic device automatically.
The types of applications for NFC on mobile are numerous:
- Electronic payments – swipe your phone and make a payment without a credit card. NFC technology is already being used in Japan in more than 30,000 stores. Users can place $50 amounts, for example, into their smart phones to make payments or even use them in smart vending machines.
- Mobile ticketing on public transportation – swipe your phone on readers placed in buses, airlines, and trains
- Electronic keys – swipe your phone and open hotel doors or your house door
- Smart posters – use your phone to read RFID tags on billboards and other signs to receive additional information and to let the “billboard” know you are there
Smart posters is the one that I find particularly intriguing.
Let’s imagine for a second, that you walk into your favorite bookstore where you have purchased many titless in the past. With your permission, as you walk past an internal electronic billboard, you allow the billboard to communicate with your phone. Instantly, the billboard scans your past purchases and recommends new books to you that you might enjoy reading. Or even better, a scanner reads your phone as you walk in and sends you an SMS with a customized offer to you for a discount on items you purchase that day as an opted-in frequent customer.
It’s kind of like going into your favorite pub where everyone knows your name. Of course, downsides such as privacy cannot be underestimated (but, that is why it has to be on an opt-in basis). Imagine, though, how much more effective it would be to having a customized sales experience. In clothing stores, sales people can know what you like, know your size, know if it is in-stock, and immediately bring you customized selection of new items. Out of stock items could be posted to your customer ID and custom SMS messages could be automatically sent to let you know when the item is back in-store.
For the retailer, NFC gives unprecedented real time monitoring of consumer behavior in-store that could lead to better consumer in-store experiences – more accurate preference tracking of target audiences for better merchandise selection, display and pricing, and an ideal feedback channel for more detailed research. Individually, salespeople could be more effective in providing consumers with more meaningful in-store experiences if they are familiar with their past interactions.
Will mobile phones replace in-store retail salespeople? The consensus opinion from that last post was no, but it surely will change the playing field in a substantial way. The impending mobile NFC introductions are yet another way that the retail experience of the 21st century will never be the same.
Mobile Mandala will resume publishing on January 3, 2010. Happy Holidays and Happy New Year.