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AutoID & Transaction Automation

AutoID & Transaction Automation Practice

NFC, RFID & Mobile Barcodes: Connecting with Consumers in a Connected WorldApril 2012

Michael Liard – Director

http://www.vdcresearch.com/





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Market Intelligence for Technology Executives. VDC Research Group (VDC) provides market research and

advisory services to the world's top technology executives. Our clients rely on us to provide actionable insights to support their most important strategic decisions. The firm is organized around four practices, each with its own focused area of coverage including: automatic identification and data collection, embedded hardware, embedded software and enterprise mobility.

Please visit our website at www.vdcresearch.com to learn more, or call 508.653.9000.

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http://vdcresearch.com/market_research/embedded_hardware/index.aspx

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The power of the consumer has only increased with the rise of smartphone adoption

By bringing together banks, merchants, advertisers, other marketing partners and consumers, the mobile

commerce network is expected to provide an enhanced real world shopping experience that is

more accessible, convenient and personal.

In an age where the consumer is king, smart brands will look to embrace technology and to enter into a two-way conversation with consumers, delivering

information and offers to build loyalty.

Enter RFID, NFC and Mobile Barcode Scanning.

Connecting with Consumers in a Connected World through AutoID Technologies





Four Lead-Adopter Examples

Brands Linking RFID to Social Media

Izzy’s Ice Cream Café (USA)

Vail Resorts, EpicMix App

(USA)

Coca-Cola Village Amusement Park

(Israel)

Mercedes Benz Auto Show,

Bash Interactive (USA)





Near-Field Communication (NFC) enables wireless, RF-based communication between smartphones and other devices at close-range. NFC operates at 13.56 MHz, and uses HF RFID protocols, including ISO 14443 A and ISO 14443 B.

NFC was developed by Sony and Philips (now NXP semiconductors) in 2002.

Key NFC applications include device/Bluetooth pairing, ticketing, logical/physical access control, mobile payment, mobile marketing, information access and peer-to-peer (P2P).

What is NFC Technology?





NFC adoption is limited in most parts of the world (Japan is a key exception)

NFC Technology Adoption Curve

Most current activity is driven by pilots or small-scale deployments

Innovators Early Adopters Early Majority Late Majority Laggards

Pre

sen

t D

ay A

dop

tion

Awareness

Understanding

Facilitated & Broader Adoption

Committment





Over 1,000 NFC users (consumers) across the world share their application experiences

Much of the NFC attention to date has been focused on mobile payment

Howeve,r NFC technology can enable much more, including:

• Smart marketing/ advertising

• Digital content delivery

• Access control

• Gaming

• Device pairing via Bluetooth

• Location Based Services (LBS)

Consumer End User NFC Applications (N=1006)

TOTAL Americas EMEA APAC

Contactless/Mobile Payments

49.2% 47.6% 43.0% 54.2%

Bluetooth pairing 41.7% 30.3% 28.8% 43.1%

Mobile Promotions/Offers

41.0% 33.1% 36.4% 48.4%

Information Access/Retrieval

39.2% 33.1% 25.2% 39.3%

Peer-to-Peer 38.8% 28.0% 23.8% 40.0%

Ticketing (i.e. transit, entertainment)

37.1% 22.4% 23.8% 34.2%

Mobile Couponing 35.6% 30.3% 24.8% 40.7%

Interactivity with Digital Signage

33.5% 34.6% 30.1% 43.1%

Customer Loyalty 33.3% 39.8% 36.4% 40.7%

Interactivity with In-Store Displays

32.1% 29.5% 22.2% 33.3%

Interactivity with Posters

28.1% 34.6% 34.8% 43.8%

Consumer Applications for NFC





NFC is also set to shake up social ‘check-in’ platforms such as Foursquare and Facebook

Places such as bars and retail outlets look to introduce NFC hubs allowing consumers to swipe in and swipe out of locations

With many coffee houses, clothing shops and shopping centers already offering incentives for customers to share their location with their friends on Facebook or Foursquare, NFC technology could remove existing barriers to entry and encourage much wider spread adoption of location based services (LBS) and networks.

This would make it even easier for consumers to work in conjunction with brands to source smarter and better deals, and pass the baton to friends.

NFC-enabled mobile phones will be able to pick up information from an NFC chip or tag, allowing the capture of real-time information on customer loyalty, item performance and more, to benefit retailers, brands and marketers.

In the long-term, BI tools will also be increasingly integrated with NFC

Like Traditional RFID Technology, NFC also Enabling “Check In” via Social Media





Less than 10% of smartphones shipped today incorporate NFC, Increasing to 50%+ over next five years

NFC allows mobile operators, banks, retailers and advertisers to benefit from a fresh and steady stream of consumer information.

By tying existing loyalty programs to NFC smartphones, retailers, wholesalers and vendors will be able to gather customer data for:

Demographic analysis, evaluating sales and store trends

Judging product preferences, and powering other analytical tasks

Operational decision making enabled by active data warehousing, such as detecting stolen products and generating automatic security and stock replenishment alerts

Allowing retailers to use customer-generated data to create precisely targeted marketing programs based on gender, age, location and other criteria, as well as to instantly adjust prices and other purchase terms based on place, date, time and other factors

Customer analytics that utilizes detailed data on customers’ use of transportation services and commercial facilities

NFC Technology: More NFC-enabled Smartphones Will Drive Applications





One term, two distinct methods, meanings and approaches

With Device Mobile Barcode Scanning (WDMBS) Mobile barcode scanning applications or use cases where the consumer “actively”

performs the scan by taking a picture of a barcode and reading/decoding the symbol with pre-installed or downloaded app/software on their mobile device.

Examples: RedLaser, ShopSavvy, Microsoft Tag and other decoder software/apps

Scanning activity peaks during key shopping seasons (Christmas, Back-to-School)

On Device Mobile Barcode Scanning (ODMBS) Mobile barcode scanning applications or use cases where a barcode/symbology is

“passively” displayed on a consumer’s mobile device screen and scanned/read by an enterprise (e.g., retailer, restaurant, airline) using a barcode imager scanner.

Examples: Target Mobile Coupons and Gift Cards; Starbuck’s Mobile Payment

Mobile Barcode Scanning





Couponing is the leading application for On-Device Mobile Barcode Scanning

Consumers Displaying Barcodes ON their Mobile Devices

What are the reasons you have DISPLAYED a barcode in a retail store?

N = 721

Percent of Respondents

To redeem a coupon/discount 59.8%

To show my membership/loyalty card 34.5%

To pay for a purchase (i.e. mobile gift card) 25.9%

To obtain my account history or profile at the retailer 15.5%

To access my social networking account (i.e. Twitter, Facebook) 10.8%

Other 6.2%

Note: Total sums to over 100% due to multiple responses





Product look-up and price comparison remain solid number one application, especially among US consumers

Consumers Scanning Barcodes WITH their Mobile Devices

What are the reasons you have SCANNED or TAKEN A PICTURE of a barcode in a retail store?

N = 1121

Percent of Respondents

Scanning product barcode to look up/compare price 64.9%

Couponing 32.5%

Payment 12.8%

Information Retrieval/Lookup 64.5%

Social Networking 11.9%

Other 2.7%

Note: Total sums to over 100% due to multiple responses





Consumer indifference, lack of awareness and poor early/first experiences are the biggest threats

Fickle Consumers Can Shut Down the NFC & Mobile Barcode Scanning Machine with their Actions

Advertising & Marketing Channel

Brands & Retailers

Standards Bodies & Industry

Associations

Mobile Operators/Carrier

s

Mobile Handset

Manufacturers

Consumers

Software, App & Service Providers

NFC, RFID, Barcode

Manufacturers

Banking & Finance





There is much to consider with RFID, NFC and Mobile Barcode Scanning, but here are a few thoughts…

Consumer education and awareness are immediate market requirements

Do not wait to fill this void/satisfy this requirement.

Joint messaging and cross-marketing a necessity today – no retailer or brand is an island

However, singular approaches still recommended to bolster consumer perception as leader/ innovator

A key proxy for an enterprise’s, retailer’s or brand’s mobile ‘preparedness’ may rest in answering the question: “Where is an organization at in terms of its overall digital on-line advertising strategy in general?”

Those with strong on-line advertising strategies tend to have sharper mobile strategies/visions, especially for mobile barcodes

Advertisers could build a bridge for rest of value chain to access enterprises as well as consumers

Where do most of Japanese consumers capture QRcodes? – from websites.

NFC-enabled posters, displays and digital signage can delivery premium content

Recommendations for Achieving Success with AutoID Technologies





Our market research is the basis for the many other ways that VDC can help you to grow your business. Our clients rely on us to provide actionable insights that support their most important strategic initiatives including: corporate development projects, opportunity assessments and lead generation programs.

Ways to Work With Us





Contact Details

Thank You

Michael LiardDirector

AutoID Group

VDC Research Group, Inc.

Email: [email protected]

Phone: +1 508-653-9000 ext. 145

www.vdcresearch.com

mailto:[email protected]




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