The retail industry is in the midst of a dramatic shift: in-store foot traffic is down, online research is up and smartphones are becoming increasingly important to customers’ shopping journey. ‘Everywhere commerce’, a term coined by the Futures Company, has arrived and is here to stay. Increasingly connected shoppers expect a seamless, multichannel experience when engaging with stores virtually or physically. By 2016, Forrester predicts that connected retail will influence 44% of retail sales.
For their part, retailers and brands now have the opportunity to impress and engage with their savvy shoppers in completely new ways, joining physical and online worlds with mobile experiences to entice shoppers to stores, engage with them in-store, drive sales and reward loyalty. Near Field Communication (NFC) and Bluetooth Low Energy (BLE) are complementary technologies which help facilitate different types of customer interaction. NFC is the natural technology in cases where customers explicitly request (pull) information, both in-store and elsewhere, and BLE for cases where retailers wish to broadcast (push) information to shoppers on-site.
The application of NFC in retailing is expanding from its dominant core application in secure contactless payment, to advertising, in-store marketing, couponing, loyalty schemes, on-shelf and on-package information sharing, and analytics gathering. NFC is a very short range (~4-5 cm – making eavesdropping a near impossibility), point to point low-cost communication system, whereby a reader such as a smartphone provides the required power to operate very low-cost battery-less tags. In typical applications, customers tap the NFC tag with their NFC enabled smartphones, and built in software automatically opens up a website whose URL is held in the tag or downloads a brand or retailer app.
BLE is an extension to the Bluetooth family of technologies, which started out life focusing on transmitting voice from hands-free headsets to mobile and smartphones. Bluetooth beacons are terminals which transmit and receive consumer oriented data according to the BLE standard. By design, Bluetooth Beacons require their own power supply, and achieve a point to many point communication (one Beacon to many smartphones) with a range of up to 150 meters. The enhanced features of BLE, and the setup and maintenance needed for Beacon devices come at a very significant cost difference when comparing Beacons to NFC tags.
To use BLE in commerce, a customer must explicitly download an application provided by the retailer or brand. In typical usage, Bluetooth Beacon devices are deployed in stores, and are able to recognize, and automatically communicate with smartphones whose users have downloaded and enabled the app, without user interaction.
The choice of whether to deploy NFC or BLE technology to address a particular business need is usually driven by cost, locality, desired user experience, and occasionally security. The cost efficiency and communication range of NFC tags make it ideal for on-product, on-package and on-shelf applications. A user taps the tag to pull the desired information from the product or shelf containing the product of interest, such as further details, usage demos or online reviews. BLE is a good tool to, for example, passively push in-store coupons and offers to a smartphone running the store’s app. An NFC tap can also help to subscribe to a BLE broadcast.
The common thread with NFC and BLE is the web connected smartphone, its increasing use by customers along their purchase journeys – and the possibility to provide information in context based on a shopper’s location. Deloitte research states the influence of mobile on in-store sales has increased 45% over the past year, and not only are people using mobile more likely to purchase, the value of their transactions increases as well. A new Google-Ipsos survey both backs up Deloitte’s findings, and provides more specific insights into today’s digitalized customer journey, such as
NFC and BLE technologies both help retailers and brands engage with customers in the way they want. Each technology provides a very simple interface by which shoppers can either pull information (NFC) when and where they want, or can opt in to get information automatically pushed through to them (BLE). Customers can easily express their product preferences, queries, and feedback, e.g. via handing over instant links to a customer website. Coupled with web connectivity to Big Data processing, it allows retailers and brands, over time, to build the type of understanding and personalized experience many customers say they desire. For example, the act of simply tapping an NFC tag in a magazine advertisement can download a product specific URL to a smartphone’s browser taking the customer to the brand’s product website for relevant information and services – which in turn can request information which uniquely identifies the smartphone, or request personal (opt-in) data from the phone user. When the same smartphone user later accesses the same product website by tapping a tag on the product’s package, the brand could invite the user to join their brand’s Facebook page and share with friends, or enroll into a loyalty program.
For retailers, when the 32% of customers enter one of their favorite stores to investigate their potential purchase, a BLE provided store money-off voucher or NFC payment based loyalty redemption scheme may be enough to help the customer to decide to purchase there and then. With a customer’s permission, a retailer can use past transactions, set profiles, preferences and other personal data to tailor messages and offers precisely for that individual to forge a closer relationship.
The above are just a few examples of the many innovative ways brands and retailers can use NFC or BLE to engage along the digitally enhanced customer journey – in ways many customers want. At every point within the journey, there’s a unique opportunity to allow people to consume content, to share, to shop and buy, then also to share through social circles, to get rewarded. In return the Big Data of digital devices and smart interfaces also mean that retailers and brands today can monitor customer behavior much more closely and in real time, taking CRM and precision marketing to new levels.
The interaction between the physical and digital worlds, made possible by contactless proximity technologies, opens up new brand-customer relationships and business opportunities that were impossible to imagine a few years ago. If done well, it’s a great way to put a smile on your shoppers’ faces.
Online furniture retailer Made.com has been creating an NFC enhanced shopping experience at its London showroom, enabling customers to tap NFC tags to find out further information about items and email themselves a wish list of products they have viewed. Items can be bought exclusively online. NFC tags have been attached on the showroom’s walls as well as individual products, and NFC tablets have been placed at the front of the showroom for shoppers without an NFC phone to use. The service aims to bridge the gap between online and offline shopping ‘for those customers that want to touch and feel products before purchase’. Since the Made.com trial began, the furniture company’s average order value has increased 15%. The system not only provides some excitement for shoppers but also offers analytics that can help Made.com understand how much value the showroom is providing overall by prompting future online sales. (2014)
Carlsberg has been distributing beer mats containing an NFC tag and installing BLE beacons at Danish pubs and bars to support its Crowdit offers and venue discovery app. Customers are able to tap their phone to the NFC beer mats to download the Crowdit app. They will then be able to receive special offers and promotions prompted by the beacons installed at the point of sale venues. This is an interesting way to combine the two proximity technologies of NFC and BLE to deliver a compelling customer engagement experience, whilst encouraging footfall and boosting sales for operators. (2014)
Kraft deployed an NFC program at US grocery stores. NFC tags were placed in signage on shelves right in front of Kraft cheese and Nabisco cookie brands. The shelf talkers invited shoppers to tap their smartphones to access dynamic recipe content, download the i-Food Assistant app or share on Facebook. The brand reported that NFC connectivity increased customer engagement from 5-11 sec at shelf to 48 sec; over one third of customers who tapped the signage to connect with the brand completed a desired action, e.g. app download or sharing with friends. (2012)
The Future Shopper, The Futures Company / Kantar Retail, 03/2013
 The Future of the High Street Lies in Connected Retail, The Guardian, 07/013
 Digital and the Path to Purchase, Deloitte Research, 01/2014
 Digital Impact on In-Store Shopping, Google & Ipsos Media CT, 10/2014