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NFC -- Coming Soon to a Store Near You

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By George Hoffman, ghoffman@finelinetech.com
 
A new technology is preparing to emerge on the retail scene that will likely displace credit cards over time by enabling shoppers to pay for goods at the register using their mobile phones. Savvy retailers are already contemplating how to further utilize this technology as a means to engage in-store shoppers with product content, interactive communications, promotions and more. The technology, called near field communications (NFC), works with a mobile phone to permit one tap access for checking out at the register and real time access to virtually any form of marketing content.

NFC is a form of RFID that works within the very small distance of approximately four inches. This is enabling shoppers with NFC-enabled phones to check out in stores by simply holding their phone close to the register and then entering their pin. Rapid replacement of the current and less secure method of paying at the register using a credit card is inevitable.

Phone manufacturers such as Samsung, HTC, Nokia and Motorola, and mobile network operators, including Verizon, Vodafone and AT&T, are all rushing to implement this technology in hopes of capturing a piece of the fast growing mobile payments market. ABI Research, in March of this year, estimated that approximately 80 million NFC phones were shipped in 2012, and they are predicting that over 500 million will be shipped in 2015. Gartner confirms this trend with its prediction that by 2015 over half of all smartphones in use will be NFC enabled.

So given there is a raising tide of shoppers equipped with NFC-enabled mobile phones, how can a retailer effectively leverage this new technology? One idea gaining traction with retailers is that of combining NFC with product tags, labels and shelf talkers to engage in-store shoppers. NXP is a major provider of NFC chips and SmartTrak is a leading supplier that embeds NFC chips in labels.

Based upon current usage, ABI Research predicts that over 70% of all NFC tags sold will be for smart materials (posters, tags, labels, etc.) and other mobile marketing programs.

So how would it work? Retailers can incorporate the NFC chip into their existing price tickets, labels or shelf talker to provide relevant and dynamic product information, such as videos, coupons or accessory suggestions. Once the shopper has been engaged on his or her mobile phone, the retailer can offer the opportunity to opt into its mobile subscriber lists or perhaps download their store’s mobile app.
 
Some retailers already experimenting with NFC-enabled advertising media are European supermarket chain Morrisons and fashion retailer H&M.
 
George Hoffman is CEO of FineLine Technologies, which provides barcode ticketing solutions for retailers, suppliers and manufacturers throughout the world. He can be contacted at ghoffman@finelinetech.com.


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