Magazine Article | January 1, 2003

Beyond Bar Codes

Source: Innovative Retail Technologies

If you're looking for new ways to provide customers with a faster, more automated shopping experience, and you want to increase customer loyalty, you need RFID (radio frequency identification).

Integrated Solutions For Retailers, January 2003

There are times when technology comes about without the preface of any public outcry. Consider ATMs (automated teller machines), for instance. In 1989, pay-at-the-pump technology emerged without any major customer surveys or customer comment forms suggesting it. Initially, a handful of gas stations took a chance that if customers didn't have to wait in line so long to pay for gas, the customers would be happier and the gas station could service more customers. Over the years, this technology has become an expected convenience. Now, imagine what the outcry would be like if a gas station decided to get rid of its pay-at-the-pump devices. Customers would leave in droves. In the same vein as the 1989 pay-at-the-pump rollouts, RFID (radio frequency identification) solutions are beginning to emerge in the marketplace. Even though your customers aren't begging you for an RFID solution, you may be missing out on an opportunity to get an edge on the competition and increase customer loyalty if you don't keep abreast of this technology and its applications.

Enterprises such as Prada (New York), Stone Mountain Park (Atlanta), and Exxon Mobil (Irving, TX) show us several ways RFID can benefit businesses. Find out whether or not their RFID deployments can be applied to your retail enterprise.

RFID Sashays Down Runway
Prada is a high-end clothier that uses several technologies to enhance customers' shopping experiences. On December 15, 2001, Prada opened a store in Manhattan's trendy SoHo district. RFID plays a big role in the 23,000-square-foot futuristic store's appeal. The store uses a combination of low-frequency (134.2 kHz) and high-frequency (13.56 MHz) Texas Instruments RFid (Dallas) Tag-it inlays (i.e. tags with integrated antennas) in its clothes, accessories, kiosks, closets, shelves, and wireless PDAs (personal digital assistants). As a customer picks up a garment from a rack, one of about 50 sales associates is there to assist them with more than the standard how-may-I-help-you? greeting. By bringing the handheld device within a few feet of the garment, customers can learn immediately if a different-sized garment is available in the store's inventory. Additionally, they can find out other materials or colors a garment is available in. If customers wish to try on outfits, they can enjoy additional assistance inside the RFID-enabled dressing room. As soon as an outfit or garment comes within 12 inches of the dressing room's reader, an interactive touch screen turns on inside the dressing room displaying helpful information. For instance, customers may see video clips of models wearing the same garments they are trying on. By touching a button on the screen, customers can see some recommended accessories that go with a particular outfit.

The next step the store will take is to add a customer loyalty card program to its repertoire. The customer loyalty card will add a whole new dimension to the customer service experience. As a customer walks into a Prada store, RFID readers will detect the Tag-it inlay within the card in the customer's purse or wallet and alert a specific sales associate via a PDA that his customer has arrived. As the sales associate makes his way to the customer, he will be equipped with knowledge about the customer. If, for instance, the sales associate sees that "Ms. Jones" has a history of buying certain kinds of clothes and accessories, he can let Ms. Jones know about any new items that have arrived and present her with that news. Additionally, if Ms. Jones visits a Prada store in Paris, the integrated customer loyalty program will alert the sales associates to items Ms. Jones recently purchased at the New York store.

Smart Bands Enable Interactive Gaming
Boasting the world's largest mass of exposed granite and the world's largest relief sculpture (covering more than 3 acres), 3,200-acre Stone Mountain Park is one of the most popular attractions in the United States, and the most popular in Georgia. In January 1998, theme park operator Silver Dollar City, Inc. (SDC), was selected by the Stone Mountain Memorial Association to provide entertainment that showcases Southern heritage. At the heart of the $30 million theme park is a 12,873-square-foot barn. Called "The Great Barn," it is a haven of activities that include giant slides, rope nets, mazes, and an interactive game called Harvest Quest. Upon entering The Great Barn, players or teams take on the identity of a fruit farmer who is helping the Pickens family harvest five different kinds of fruit. Players' names and ages are entered into a computer terminal, and each player receives a wristband called a Smart Band. The Smart Band includes a low-frequency Tag-it inlay. As tasks at each of the 70 consoles are completed, points are automatically accumulated on the Smart Bands. At the end of a session, names of high scores appear on a giant, lighted scoreboard. "The game remembers players and lets them play each station once per game," says Gerald Rakestraw, director of operations. "The Smart Bands avoid the hassle of having to accumulate tickets or tokens and free the players to focus on the game." Since the completion of The Great Barn in November 2001 and a more recent addition called CrossRoads (which includes a 4-D theatre), Stone Mountain Park has witnessed a 20% increase in attendance - from 3.2 million visitors in 2001 to more than 4 million in 2002. In the future, SDC is considering expanding its use of RFID to other areas of the park. Smart Bands may be used to help parents keep track of their children in different areas of the park, for example, and allow patrons to pay for food items and merchandise.

Customer Service Soars At The Pump
Eight years after traditional pay-at-the-pump technology hit the scene, Exxon Mobil took the concept to the next level. Using RFID key ring tags (called fobs) or Tag-it-enhanced windshields, Exxon Mobil customers can pay for their gas in a fraction of the time it takes for card users to swipe cards and wait for authorization. Today, more than 6 million Exxon Mobil customers pay at the pump with the RFID fobs. Furthermore, the solution is providing more than just a 10-to-15-second faster purchase experience. It's also providing customers with a more secure means of doing business, as well as incentives to frequent Exxon's convenient stores. Unlike traditional credit/debit cards, RFID cards contain built-in, non-transferable identification that offers users end-to-end encryption. Additionally, customers can put daily limits on their RFID fobs, so that if the fob is stolen and used before the owner has a chance to have the card turned off, the thief cannot rack up more than $50 worth of gasoline. How many credit cards can offer that level of protection? Also, since RFID can be used as a read/write technology, retailers like Exxon Mobil can assign points to customers that can merit rewards upon reaching a specified sum. For instance, after a customer has accumulated $50 worth of gas, a screen prompt could tell the customer, "Hello, Mr. Jones. As a loyal Exxon customer, we would like to reward you with a complimentary cup of your favorite Starbucks coffee. Please stop in to any of our convenience store locations to redeem your reward." Mr. Jones feels appreciated for choosing to buy gas from Exxon Mobil. And, while inside the store picking up his free cup of coffee, he may also decide to purchase other food items and merchandise, which he can pay for with his key ring tag.

Overall, you won't find a lot of retailers using RFID. Maybe it's because they don't see enough retailers using it to feel it's safe for them, or maybe they're waiting for enough customers to turn in suggestion cards with an outcry saying "it's time." Just like with any technology, it may be a little scary being on the bleeding edge. But, being the last to adopt a technology will prove more frightening.