NFC and consumers - Success factors and limitations in retail business - Florian Resatsch

NFC and consumers – Success factors and limitations in retail business

Florian ResatschWIMA Monaco - April, 18th 2007

/ 2Institute of Electronic Business at the University of Arts Berlin

Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Structure

1. Introduction

2. Situation and limitations

3. Ideas

4. Case Study: Mobile Prosumer

5. NFC in retail business

6. Open Questions/Discussion


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Institute of Electronic Business – I

The Institute of Electronic

Business (IEB) is an

affiliated institute of the

University of Arts, Berlin

Consultancy and research in the area of electronic business, communications and design

Network to connect scientists and practitioners


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Institute of Electronic Business – II

Main Research AreasUbiquitous Computing

Human Computer Interface Digital Communication

e-Government

Performance Marketing

Key Facts

Employees: 25

Number of students: 160

Public-Private-Partnership (many Industry partners)

Director: Prof. Dr. Dr. Thomas Schildhauer


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Structure

1. Introduction


3. Ideas





Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Retailer Situation: Statement

An average choice of products with an average

shopping experience with average priced goods

does not make a difference –

the consumer is depending on the price as a decision criterion between different stores.

(Source: Mercer Management Consulting - http://www.mercermc.de/veroeffentlichungen/studien/branchenkompetenz/handel/layout_handel/browse/4/article/preiskommunikation.html)

?


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Situation: But what is the difference?


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Situation: Stress factors in stores

• time pressure • lack of response by retailers • crowd density• staff attitude and training• store layout/relocation• impulse purchasing pressure• location• product assortment• music• lighting

{Source: Aylott, 1998 „An exploratory study of grocery shopping stressors“}


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Structure

1. Introduction


3. Ideas





Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

„Intention economy“

http://www.trendwatching.com/briefing/

Example:Name your

price

Doc Searls: http://www.linuxjournal.com/node/1000035


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Special interest communities

Example:Wine

community


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Crowd Spirit – New Start Up

http://www.trendwatching.com/briefing/

Example:Customer integration

in product development


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Example:Quick

Check out!


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Ubiquitous Computing

Ubiquitous-ComputingThings & Information unite

01001

01001

01001 01001

01001 01001

01001

010010100101001

Internet Real World

Informationhow to bridge the gap?

Mechanisms


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Structure

1. Introduction


3. Ideas





Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Case study: Problem

Most available information

about products is

separate from them.


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Case study: Consumer issues

(Bildquelle: www.trendwatching.com, 2006)

• For the customer• The consumer relies upon the sales assistant at

the point of sale to access relevant information

concerning the product

• Independent decision making is difficult based on

this information source

• This increases the customers subjective feeling

of insecurity.

• Lack of time

• Lack of influence on the product development

(feedback channel)

• Stressor situations


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Case study: Retailer issues

(Bildquelle: www.trendwatching.com, 2006)

• For the retailer• The customers subjective feeling of insecurity

leads to fewer spontaneous purchases, and less

customer loyalty.

• Consumer behaviour at the point of sale is

difficult to measure (e.g. overlooked target

group)

• There is no further information on a specific

product and no communication channel for

additional benefits

• The customer becomes more aware and more

critical


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

The Mobile Prosumer

• Display of relevant product information on

the mobile phone.

• Modular and personalised information service

at the point of sale

• Real-time monitoring of consumer behaviour

• Feedback channel producer and Retailer (CRM)


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Core of the application

Service

Local data

3rd partyContent Sources

Easy interaction

Community Sources

Producer

Distributor

Retailer

Store (ERP)

Supply chaininformation

EPCIS

NFC taggedproduct

Feedback Channel

DB

Usageinfo


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Technical Overview / Underlying Magic

• SOA – Service Oriented Architecture• EPC / EPCIS – Electronic Product Code /

Electronic Product Code Information Service • ONS – Object Naming Service

• NFC – Near Field Communication


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Current evaluations include

• What product categories are considered useful

by the consumer?• Technology acceptance of application• Human-computer interaction (Tag placements)• Motivational usage components• Retail integration • Interesting community

sources• Business case


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Success factor: Value Proposition for both

Value Proposition for the consumer • The Mobile Prosumer enables the buyer to

easily get relevant information at the point

of sale

Value Proposition for the retailer•The Mobile Prosumer enables the retailer to be

the attorney of the consumer and assist him in

his daily life


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Structure

1. Introduction


3. Ideas





Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Supply Chain to Consumer: Tag Benefits

SerialisedGlobal TradeItem Number(SGTIN)

Supplier Distributor Store Customer

Global ReturnableAsset

Identification(GRAI)

Serial Shipping

Container Code(SSCC)

Mobile inventorytaking

Shelf management

POScheck-out

Theftprotection

Everydayassistance

Realtimeinformationservices

Neutralinformation

sources

Pallets: Object monitoring

& counting

Shipping containers: Object monitoring

& counting

Item Level

Information

Information

800/900 MHz - ? 13,56 MHz

A lot ofinformationgathered


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

But: The frequency problem

• (potential) sweet-spot for item-level tagging

• lower, but sufficient range

• desired cost-point <1cent

• ultra-low-cost RFID is near with printed RFID tags

• likely to gain more acceptance with customers

13.56MHz

• is pushed by retailers to extent physical supply chain (logistics)

• current cost-point >10cent

• use on pallet level

• higher range

• very bad with RF-absorbing fluids (water, milk) and surfaces (metal)

800/900MHz

(see also Subramanian, V., P. C. Chang, et al. (2006). Progress Toward Development of All-Printed RFID Tags: Materials, Processes, and Devices. Proceedings of the 19th International Conference on VLSI Design (VLSID’06))

vs.


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Challenges in Retail

Because of the • relatively high cost of NFC/RFID deployment• plus low profit margin (supermarkets)

item-level tagging seems far away.

But retailers need • On-Shelf Availability• Out of Stock Improvement & Replenishment• Labour Saving• Inventory Management

Things item level tagging could help!


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

BUT: more important open questions!

Exemplary: Tag placement for users?

(Source: www.bayerische-papierverbaende.de)


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Self-checkout?

(Source: http://en.wikipedia.org/wiki/Image:Wal-Mart_Self_Checkout.jpg)


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Solution: Limit the stress factors and learn from Internet convenience

Improvements for consumers & retailers• response by retailers • staff attitude and training• easier impulse purchasing pressure• improve product assortment• music (maybe )• community integration• reverse pricing?• customer feedback channel• easy checkout

{Picture source: lovelandia.com


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Structure

1. Introduction


3. Ideas





Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Or: Create something completely new

Picture: © Peter Stulz (xoio.de)


Introduction

Situation

NFC

Open questions

Structure

Ideas

Case Study

Every great advance in science has issued from a new audacity of imagination. John Dewey

KontaktFlorian [email protected]

NFC and consumers - Success factors and limitations in retail business - Florian Resatsch

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Transcript of NFC and consumers - Success factors and limitations in retail business - Florian Resatsch