Magazine Article | September 1, 2003

RF Gets A Retail Makeover

Source: Innovative Retail Technologies

Think RF (radio frequency) technology can only benefit your supply chain? Think again. RFID is redefining customer loyalty, too.

Integrated Solutions For Retailers, September 2003

Bill Allen, marketing communications manager at Texas Instruments RFid Systems (Plano, TX), is no stranger to RF (radio frequency) technology. He and his company are thought leaders in the space and have developed some highly regarded RF applications for retail. Here, Allen and TI RFid customer Julie Bartholomew, president and creative director of IMX Cosmetics (Birmingham, MI), discuss the virtues of the technology in a specialty retail environment.

1. What kind of demand is there today from large retailers for RF-based customer loyalty applications?

Allen: Right now, there's an industry focus on how RF technology can help streamline retailers' supply chains. But, there are other applications of the technology that can be very beneficial to retailers, including its potential as a customer loyalty device. We have seen some great examples of customer loyalty deployments, including ExxonMobil's Speedpass, which is the first RF-based loyalty application out there. The company was looking for a technology that would get customers to choose their stations over the other three competing stations on the corner. What they discovered was that the speed and convenience of this payment technology caused Speedpass users to average one extra fill-up per month, translating into a significant increase in sales.

Stop & Shop is also piloting a new program. It allows customers to pay with Speedpass and also receive instant rewards and coupons as part of its loyalty program, all on one device.

2. What are some unique applications of RF technology in the customer loyalty space?

Allen: The same low-frequency RF technology that's being used by millions of consumers for gasoline purchases is connecting customers of IMX Cosmetics ( to a history of their personalized makeup recipes in Barneys New York (Madison Ave.), Nordstrom in Las Vegas, and The Studio at Fred Segal in Santa Monica, CA.

IMX recently launched this custom cosmetics line, allowing patrons to mix their own personalized recipes for lip-gloss and other cosmetics and retrieve them at in-store computer kiosks. IMX is using an RF keyfob from TI, providing customers with a high-tech way to link to their personal history. The technology gives these high-end customers a reason to come back for more and a cool and convenient way to pull up their recipe history.

Last year, Prada opened its New York Epicenter in SoHo and implemented an RF-based, in-store item-tagging system. The goal in this case was to create a unique customer experience, using the high-frequency RF smart labels to store information about each item, such as fabric content, available sizes, colors, suggested complementary items, or accessories that sales associates using handheld readers can call up for a customer . They also installed RF readers in the fitting rooms, which are connected to computer displays inside the room that show information about the items, including links to videos of models wearing those items on the runway.

In each case, we're seeing RF technology serve as the vital communications link. It can identify a customer, to call up an account history or to provide value-added services to create a unique customer experience.

Bartholomew: We wanted to give the cosmetics industry a "high-tech makeover" and found that RFID (radio frequency identification) technology could help us accomplish that change. Our "MX" Stick (RFID fob) allows our customers to retrieve all of the custom lip-gloss recipes they create and then purchase from us. Simply having the fob on their key chains is a reminder of the experience they had creating their custom cosmetics and seeing the product manufactured and packaged right in the store. Our customers really enjoy coming back to the store, visiting the IMX Mixing Station to retrieve their personal mixes, changing them, sharing them with a friend, or creating something completely new and different.

3. What factors go into determining a good retail fit for an RF-based customer loyalty solution? Which retailers can benefit, and why?

Allen: Retailers looking for a technology that offers a unique branding opportunity and that is fast, easy, and convenient for consumers to use can benefit from RFID for loyalty applications. RFID is available in a range of form factors, from key-ring tags and tokens, to cards and labels, with varying read ranges and data storage capabilities. These features allow retailers to completely customize the look and feel and the overall capability of their loyalty solution, while still being able to conform to industry standards, such as ISO 15693 or ISO 14443.

4. What kind of data can a retailer gather from such a solution? What can a retailer do with this data?

Allen: RF allows retailers to gather a variety of information about customers, from contact details to purchase histories, which can be used to offer rewards targeted to their interests as well as to better understand overall buying patterns. Ultimately, the information collected and how it is used is up to the retailer. Smart companies always know that a customer's privacy concerns are of utmost importance. That's been true for credit card companies who have built-in protection against credit card theft or misuse of information and for Internet businesses that offer clients opt-in controls. The same is true for successful RFID-based loyalty applications - participation should be the customer's choice, and their private information should be protected.

5. What are the three most important features any retailer should look for in an RF-based customer loyalty solution?

Bartholomew: There are many important features of RF that enable retailers to create powerful customer loyalty programs. Retailers should review their loyalty program goals and determine how RF technology can help accomplish them. With RF, we were able to do something that had never been done in the cosmetics industry before. By putting this technology in the hands of the customer, we have created a truly unique and personalized shopping experience. Integral to the success of our program was to have a technology that is user-friendly, and RF is so simple to use.

Finally, RF provided us with a branding tool. The "MX" Stick on their key chain reminds our customers of us each time they see it. We've already seen the results - customers coming back to the store to call up recipes and purchase additional items. There's an added benefit - people who aren't familiar with our company see our MX Stick keyfobs and are prompted to ask what it is, creating new awareness.