NFC is Now – Luxury Goods are Poised to Tap the Potential of Smart Tags with iOS 13

NFC is Now – Luxury Goods are Poised to Tap the Potential of Smart Tags with iOS 13

Feature-rich Near Field Communication (NFC) tags for hyper-personalized experiences, advanced security tags for enhanced product protection, along with enhanced NFC support in Apple’s just-announced iOS 13 operating system, are making smart product tags more compelling than ever.

This is happening at a time when changing consumer focus is causing a major disruption in the luxury industry. Luxury consumers are increasingly looking for the rare, unique, and unexpected, and are seeking out new experiences, with sustainability also playing an important role in purchasing decisions. At the same time, luxury consumers are getting younger and increasingly like to shop online. The management consulting firm Bain & Company forecasts that Generations Y and Z will represent about 55 percent of the 2025 luxury market.

NFC is the Better Way to Connect and Engage with Consumers

NFC tags embedded in products and their packaging can now connect with consumers in new, immediate, and more intimate ways, merging the physical and digital, with customization, personalization, and virtual reality enhancement. Bain & Company estimates that 50 percent of luxury purchases will be digitally enabled by 2025 as a result of new technologies along the value chain, including mobile payments.

NFC tags can engage luxury consumers more deeply, by linking to exclusive brand content, highly personalized services, exclusive brand communities or special VIP experiences. In addition, NFC can improve customer relationship management (CMS) through real-time data collection, originating from the products themselves, and enabling new intelligence on user behaviors and predictive analytics.

The Importance of Brand Authentication

Since 2010, there has been a spectacular increase in counterfeit luxury goods worldwide, with double digit annual growth from 2013 onwards. (Vandagraf Research) Some product imitations look so authentic that they are classified as ‘super fakes’ or ‘triple-A fakes’, making it impossible to tell the difference without special equipment, let alone with the naked eye. So luxury brands are coming under ever increasing pressure to respond more effectively to this menace.

Placing a security NFC tag on the branded product addresses this problem by making it easy for anyone with an NFC enabled smartphone to verify authenticity of branded goods. The NFC tag with a secured link to an online authentication service can confirm its origins at any point in the lifetime of the product, whether it’s in the supply chain, at the point of sale, or even returned after the sale as part of warranty claim.

The Special Case of Second-Hand Luxury Goods

The issue of authenticity in especially serious within the growing market of second-hand luxury goods. To help reassure customers, some sites have experts examine the item before it’s sold.
For example, with designer handbags, which can have price tags well above $1,500 apiece, certain retailers, including eBay, Poshmark, and the RealReal, pay third-party authentication experts to examine items physically and verify authenticity before the item is listed for sale. According to CBInsights, the markup for authentication can be from 20 to 45 percent of the purchase price. Yet, NFC tagging can eliminate this issue, helping protect brand trust with greater accuracy and at a lower price. Brands can even start offering an on-tap registration platform, so consumers can register product ownership, and in case of its sale in the second-hand market, can prove and transfer ownership to others.

Apple iOS 13 Changes the Game for NFC

At the same time, Apple recently announced a major upgrade to their operating system in iOS 13. With Apple adding the ability to write to tags, as well as interact with tags through native protocols (such as ISO/IEC 7816 combined with ISO/IEC 14443 for proximity tags and ISO/IEC 15693 for vicinity tags), the iPhones’ NFC capabilities will become even more powerful. So all of the luxury buyers worldwide who own smartphones (iOS, Android) will also have an NFC reader to tap and interact with NFC smart tags and labels, leveraging advanced NFC functionalities.

Experience the Latest Advances NFC in Person at LuxePack Monaco

NXP Semiconductors is the world’s number-one supplier of NFC chip technologies for smart tags, labels, closures and more. Our portfolio offers a powerful combination of chip performance and feature mix, across every security level, so we can meet customers’ specific needs with multiple form factors that deliver rich yet secure experiences.

For luxury goods in particular, the NXP NTAG® 424 uses multi-layered security, with optional opening status detection, including special features, such as AES-128 cryptography, message and mutual authentication mechanisms, and enhanced privacy protection. NTAG Secure Services support with a new cloud-based authentication solution. The result is the most sophisticated NFC solution available today, providing luxury goods with the most advanced counterfeiting protection along with highly personalized and unique digital experiences.

To learn more, visit www.nxp.com/nfc or visit us at NXP booth #AC9 at LuxePack Monaco 2019, to see just some of the latest brands deploying NFC today in their packaging, along with the latest advances in NFC technology – for high-end clothing to wines & spirits to cosmetics.

Sylvia Kaiser-Kershaw
Sylvia Kaiser-Kershaw
A marketing professional with over 15 years of experience working across markets, including technology, FMCG, prestige, and financial services, Sylvia Kaiser-Kershaw is an expert in the definition and implementation of brand strategies and cross-channel marketing solutions. At NXP, she's driving IoT applications that increase engagement between brands and consumers by adding digital RFID-NFC connectivity, security and intelligence to physical media and products.

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