2010.13 | Barcode of the Future?

There was a lot of press over the last week or so around RFID tags that can be printed onto packaging  using Carbon Nanotubes in the ink.  This is an interesting development in the world of scanning in retail, given our ongoing obsession with attaining the nirvana of checkout – the non-checkout – as depicted in the famous IBM “You forgot your receipt” commercial from the late 90s.

A few thoughts to consider on using item level RFID tags at point of sale:

Labelling Complexities – Considering the thousands of items for sale in today’s retail stores, expect a migration to RFID to take some time to complete.  For example, while marketers may think RFID means the end of unsightly barcodes, it will be necessary to have some sort of visual code or number on any item in order to allow for pricing in the event of a failed code or reader.  Not having a visual code to type in would cause bottlenecks at point of sale and customer frustration.   Another concern is how RFID readers will recognize items vs cases of items.   Cases of Coke generally have individually barcoded cans as well as a barcode on the case.  Barcodes are visual and the scanner can be directed at the code to ensure it picks up the case code.  Should Coke not put RFID tags on cans in cases?  How do we make the reader read the RFID tag on the case?  These are just two examples of many details that will require consideration.  This will take time and testing to complete.

Scanners - Current scanning technology won’t read RFID tags.  It will be necessary to change the scanning technology at the front end.  For customers with scanner/scales, there may be an upgrade path to avoid entire replacments and simplify a migration from barcodes to item level RFID.  The NCR 7878OFX  has space in the unit for a future RFID reader, allowing one scanner to read both barcodes and RFID tags.  In a grocery environment, a scale will still be needed, so using the current units as much as possible would be a big cost benefit.

Security  – Using RFID tags on every item would potentially eliminate the necessity of EAS tags.  An RFID reader at the door could validate whether an item has been purchased or not when it passes through the door.  It may be more effective in avoiding false positives (false alarms) at the store exit.  There is also the very reasonable concern of privacy advocates that those with readers could read what is in your bag – or even in your house depending on the tag.  There needs to be some sort of tag destruction protocol to avoid that concern.

Like any technology, there are some great upsides, but costs and difficulties must be overcome which will drive the feasibility of this technology out for some years.  I wouldn’t expect to walk through a gate and have everything scanned automagically either – for starters, metal carts mess with the reception, tags in the middle of cases of liquid don’t always read well, and most customers won’t want us weighing every customer to see how much their produce weighs.   Given these issues and the concern around privacy (remember RFID passport hacking?) I don’t believe this will catch on any time soon.  Simplicity and cost are key and this solution isn’t there yet, but I look forward to new developments that could make it happen.

2010.12 | New Payment Options

I read a fascinating article today in this month’s Wired.  The Future of Money discusses a myriad of electronic payments systems and formulas including Square , Twitpay, and provides an flowchart comparison of how payments are processed using Credit Cards, iTunes and Paypal.

While the difficulties of security, transaction volume and the necessary usability of a point of sale to maintain transaction speed are huge hurdles to overcome, it is worth watching the latest ideas around electronic payment to see if there is an opportunity for usage in a point of sale environment.  Based on the fact that the first article I wrote on e-payments was in 1995 on Mondex and its ilk, this may never amount to much.  That said, things have changed enormously in 15 years with the rise of the Internet, Social Media and consumers’ generally increased exposure to technology.  Social acceptance can drive a great deal of inertia, so there is no telling what tomorrow’s payment system will look like.

2010.11 | Paper or Plastic…Cash?

A customer sent me an article last week highlighting Canada’s plans to shift our paper money to leverage polymer in the 2011 timeframe.  

For retailers this means potential changes to counterfeit detection, and firmware updates for automatic cash acceptors.  On the upside, it also means cash that can last four times longer in circulation, and a more difficult note to copy.

Australia, New Zealand and seven other countries are using polymer based banknotes as of 2009.

2010.10 | Social Media for Special Events

Retailers have been leveraging the popularity of special events to sell more goods for as long as there has been retail.  The pervasiveness and immediacy of social media now presents a greater opportunity for retailers to leverage the excitement around special events.  The incredible potential of leveraging social media has been highlighted with the recent 2010 Winter Olympics in Vancouver and by the 2010 Oscars.

What are the benefits of social media over traditional methods (print, television, radio, email) of providing special event offers and coverage?

  • Social Media can quickly attract customers to deals related to special events in a timely and effective manner.  In the past, retailers may leverage a small display in a store with some signage and some topical items, but that relied upon the fact that customers would have to be in the store to capture them.  In email, the opportunity may be lost in the user’s inbox. With the use of a twitter feed, or a facebook update, customers that are part of the retailer community will be open to hear the connection between a special event and a retailer.  Establishing the shared passion of a brand and a consumer can forge a bond for long term sales, as well as drive immediate traffic with a good posting that connects an offer with a short term special event like Canada Reads.
  • Retail organizations can leverage special interest groups into sales by getting their eyes during a special event.  IMDB tweeted all of the winners, and posted all of them on their start page. Followers are now one click away from the links to the winners, and all of the details, including very very soft sell links to Amazon to buy the DVDs and books.   Amazon owns IMDB and it does a great job catering to a very devoted film audience and is smart enough to make it easy to buy, but not overshadow the information that film lovers get from the site.
  • Social Media allows consumers to take part in a discussion where their input is appreciated, building a closer alignment with the brand.
  • Social Media shows the discussion taking place – effectively customers build the dialog and the content, and retailers can look at the customer interest to build offers and adjust the brand to suit their customers interests. Sepphora Product Reviews is a great example of how that dialog can be built.

Social Media allows for quick, timely campaigns that would never happen in other media.  They are very cost effective, can be timely (sent out right after a game winning goal perhaps), and don’t require extensive planning. Given the low cost of social media and the potential upside, expect a great deal more of this to take place.

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