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NFC and consumers –  Success factors and limitations in retail business Florian Resatsch WIMA Monaco - April, 18th 2007
Structure  Introduction  Situation and limitations  Ideas  Case Study: Mobile Prosumer NFC in retail business  Open Questions/Discussion
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
Institute of Electronic Business – II Main Research Areas Ubiquitous 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
Structure  Introduction  Situation and limitations  Ideas  Case Study: Mobile Prosumer NFC in retail business  Open Questions/Discussion
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) ?
Situation: But what is the difference?
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“}
Structure  Introduction  Situation and limitations  Ideas   Case Study: Mobile Prosumer NFC in retail business  Open Questions/Discussion
„ Intention economy“  http://www.trendwatching.com/briefing/ Example: Name your price Doc Searls: http://www.linuxjournal.com/node/1000035
Special interest communities Example: Wine community
Crowd Spirit – New Start Up http://www.trendwatching.com/briefing/ Example: Customer integration in product development
Example: Quick  Check out!
 
 
Ubiquitous Computing how to bridge  the gap? Mechanisms Ubiquitous-Computing Things & Information unite 01001 01001 01001 01001 01001 01001 01001 01001 01001 01001 Internet  Real World Information
Structure  Introduction  Situation and limitations  Ideas  Case Study: Mobile Prosumer NFC in retail business  Open Questions/Discussion
Case study: Problem Most available information  about products is  separate from them.
Case study: Consumer issues 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  (Bildquelle:  www.trendwatching.com , 2006)
Case study: Retailer issues  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 (Bildquelle:  www.trendwatching.com , 2006)
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)
Core of the application  Service Local data 3rd party Content Sources Easy  interaction Community Sources Producer Distributor Retailer Store (ERP) Supply chain information EPCIS NFC tagged product  Feedback Channel DB Usage info
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
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
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
Structure  Introduction  Situation and limitations  Ideas  Case Study: Mobile Prosumer NFC in retail business  Open Questions/Discussion
Supply Chain to Consumer: Tag Benefits Serialised Global Trade Item Number (SGTIN) Supplier Distributor Store Customer Global Returnable Asset Identification (GRAI) Serial  Shipping Container Code (SSCC) Mobile  inventory taking Shelf  management POS check-out Theft protection Everyday assistance Realtime information services Neutral information sources Pallets:  Object monitoring & counting Shipping containers: Object monitoring & counting Item Level Information Information 800/900 MHz - ? 13,56 MHz A lot of information gathered
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.
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!
BUT: more important open questions! Exemplary: Tag placement for users?  (Source: www.bayerische-papierverbaende.de)
Self-checkout?  (Source: http://en.wikipedia.org/wiki/Image:Wal-Mart_Self_Checkout.jpg)
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
Structure  Introduction  Situation and limitations  Ideas  Case Study: Mobile Prosumer NFC in retail business  Open Questions/Discussion
Or: Create something completely new Picture: © Peter Stulz (xoio.de)
Every great advance in science has issued from a new audacity of imagination .  John Dewey Kontakt Florian Resatsch [email_address]

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

  • 1. NFC and consumers – Success factors and limitations in retail business Florian Resatsch WIMA Monaco - April, 18th 2007
  • 2. Structure Introduction Situation and limitations Ideas Case Study: Mobile Prosumer NFC in retail business Open Questions/Discussion
  • 3. 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
  • 4. Institute of Electronic Business – II Main Research Areas Ubiquitous 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
  • 5. Structure Introduction Situation and limitations Ideas Case Study: Mobile Prosumer NFC in retail business Open Questions/Discussion
  • 6. 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) ?
  • 7. Situation: But what is the difference?
  • 8. 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“}
  • 9. Structure Introduction Situation and limitations Ideas Case Study: Mobile Prosumer NFC in retail business Open Questions/Discussion
  • 10. „ Intention economy“ http://www.trendwatching.com/briefing/ Example: Name your price Doc Searls: http://www.linuxjournal.com/node/1000035
  • 11. Special interest communities Example: Wine community
  • 12. Crowd Spirit – New Start Up http://www.trendwatching.com/briefing/ Example: Customer integration in product development
  • 13. Example: Quick Check out!
  • 14.  
  • 15.  
  • 16. Ubiquitous Computing how to bridge the gap? Mechanisms Ubiquitous-Computing Things & Information unite 01001 01001 01001 01001 01001 01001 01001 01001 01001 01001 Internet Real World Information
  • 17. Structure Introduction Situation and limitations Ideas Case Study: Mobile Prosumer NFC in retail business Open Questions/Discussion
  • 18. Case study: Problem Most available information about products is separate from them.
  • 19. Case study: Consumer issues 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 (Bildquelle: www.trendwatching.com , 2006)
  • 20. Case study: Retailer issues 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 (Bildquelle: www.trendwatching.com , 2006)
  • 21. 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)
  • 22. Core of the application Service Local data 3rd party Content Sources Easy interaction Community Sources Producer Distributor Retailer Store (ERP) Supply chain information EPCIS NFC tagged product Feedback Channel DB Usage info
  • 23. 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
  • 24. 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
  • 25. 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
  • 26. Structure Introduction Situation and limitations Ideas Case Study: Mobile Prosumer NFC in retail business Open Questions/Discussion
  • 27. Supply Chain to Consumer: Tag Benefits Serialised Global Trade Item Number (SGTIN) Supplier Distributor Store Customer Global Returnable Asset Identification (GRAI) Serial Shipping Container Code (SSCC) Mobile inventory taking Shelf management POS check-out Theft protection Everyday assistance Realtime information services Neutral information sources Pallets: Object monitoring & counting Shipping containers: Object monitoring & counting Item Level Information Information 800/900 MHz - ? 13,56 MHz A lot of information gathered
  • 28. 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.
  • 29. 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!
  • 30. BUT: more important open questions! Exemplary: Tag placement for users? (Source: www.bayerische-papierverbaende.de)
  • 31. Self-checkout? (Source: http://en.wikipedia.org/wiki/Image:Wal-Mart_Self_Checkout.jpg)
  • 32. 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
  • 33. Structure Introduction Situation and limitations Ideas Case Study: Mobile Prosumer NFC in retail business Open Questions/Discussion
  • 34. Or: Create something completely new Picture: © Peter Stulz (xoio.de)
  • 35. Every great advance in science has issued from a new audacity of imagination . John Dewey Kontakt Florian Resatsch [email_address]