The Power of NFC: When Tapping Points Hit the Tipping Point
July/Aug 2012
Theresa Billy

NFC is the new buzz word—or acronym, to be more precise. Short for near-field communication, NFC is seemingly everywhere these days, from blogs to boardrooms, and beyond. This “tap technology” is being investigated by everyone from marketers to product developers, and even executives. It’s no wonder; it is an exciting, innovative technology that, when combined with mobile and cloud technologies, offers a new layer of disruption that provides an array of possibilities for real and unforeseen change across numerous activities, industries, and ecosystems.

NFC provides a wonderful, unobtrusive, and interactive engagement opportunity for end users, as well as new opportunities for engagement, data collection, and distribution for businesses due to its ability to connect offline to online and make information portable. Think about it. Now M2M (machine-to-machine) is being connected to the cloud (the home of data) and mobile technology. This means you can get information anywhere, anytime—and you can even take it with you.

In a nutshell, NFC connects, connects, and connects. Out of the box, it puts the power of connectivity in your hands. No apps to search for or download. No services for which to sign up. No pins or passwords to enter. Just tap your NFC-enabled device to an NFC tap point, connect, and “voilà!” You are able to receive and share information, offline and online.

Extending the potential of NFC is the fact the technology represents a uniform standard of interoperability that has been adopted globally and which relies on visual cues and tap points to engage. These attributes remove major barriers to adoption, making the technology consistent and easy to use. It can be recognized and deployed globally with no language barriers.

Tap to the Customer

This interoperability also creates another layer of connectivity—an opportunity to provide the customer with location-based information delivery at the appropriate time for purchase and decisionmaking.

Because NFC chips don’t need power, they can be placed anywhere on the product, whether it’s inside the actual product or on the labels, tags, or packaging. It allows a prospective buyer to verify information about product authenticity. For instance, is that a real Coach handbag, or is it a knock off? Or, what are the ingredients in that candy bar or its expiration date?

Beyond this, it is the tapping that can really empower the consumer. NFC is a wireless technology that enables data exchange or information delivery and communication to occur between any two electronic devices when they “tap” or come together in proximity of each other. If you tap your NFC-enabled device to another NFC-enabled device or tap point, like a smart poster or label, you can retrieve a message.

When you boil it down, you’re connecting chips; chips that are actually embedded in devices. We are not just talking smartphones and tablets, but also appliances like a refrigerator, or an inanimate object like a poster, coaster, shirt, and more. These chips can pretty much go anywhere and be encoded with almost any message, including animation, apps, and forms.

The power comes with the message that is shared or received via an online connection or by tapping your phone to another NFC-enabled device. Think of the activity-driven opportunities this seemingly simple new distribution point provides, especially now, as more smartphones with NFC enter the market.

You can deliver payment options, coupons, loyalty programs and brand apps, links to join interactive games, product information, social media connections, and on and on.

The possibilities are endless and its simplicity is why there is so much chatter. This simplicity and ease of connectivity makes NFC the technology everyone wants to develop.

Tap to the Business

NFC can be used as a pointer at tap, which means it uses a URL and points to, or sends the user to a specific site, or it can be used to bootstrap more capable wireless connections, like establishing Bluetooth connections or configured Wi-Fi networks. This bidirectional communication capability allows for another highly desirable use case: geotargeted and geofenced message delivery. This takes location-based message targeting to the next level.

Excitement is building across industries from the realization that this provides previously unheard-of advertising and marketing opportunities as well as data capturing possibilities. It also creates the potential to close the loop, capturing data from the point-of-manufacture to the point-of-sale.

Use of the cloud and mobile technology changed the basic paradigm of brick-and-mortar retail and how consumers shop. It brought the store to consumers where they are and when they want it. Shoppers now have the ability to search for products and services, compare information and prices, share preferences and ratings, and shop from their mobile devices anytime, anywhere.

Now add that offline connection of NFC, and suddenly that point of purchase becomes portable. This is an unintended consequence of NFC, I’m sure, as the technology was mainly developed for use with payments, smart cards, and wallets, but it is a reality nonetheless because now you can tap on an object and be directed to mobile commerce, which gives you the ability to order an item for pick up or delivery and purchase it without ever having to use a static checkout point or sales register.

This means you can allow the consumer to shop from anywhere. From a smart poster at the bus stop, to a label in a shoe or on a coffee cup, to a tag on a counter at a local bodega, all you have to do is provide that ability to tap. This ability to tag and label individual items and products now also allows for the connection of realtime inventory information to retail distribution and purchase occasions, thus creating a new data point for collection, which provides consumer-driven business intelligence.

Think of the benefits to the retail business when you can provide direct product messaging to drive and complete sales. You increase sales and improve the customer experience and brand loyalty.

Tap to All

If you don’t want to wait in line or carry packages around, or if the shirt you want is not available on the shelf, you can tap on a label, order the right size and color, and have it shipped. You get what you want, when you want, where you want.

As these implementations evolve, they will have a tremendous impact on manufacturing and supply-chain paradigms and supply-chain management across industries. Realtime data connected to realtime distribution needs can affect where products are made and how and when they are delivered. Businesses can direct and redirect shipments on demand. They can close the gap between what they produce and what they sell. This truly impacts just-in-time inventory and can help retailers recapture lost sales.

The data from these connections provide brands with deeper, more relevant insights that can result in better decisionmaking abilities and overall performance. This new realtime product and service feedback loop between brands and consumers is also creating a resurgence of “prosumers.”

“Prosumers” is an older term once used mainly to describe customers as producers; cocreators of a product’s value. I think that concept applies now more than ever, thanks in part to NFC.

Today’s consumers are more actively engaged and more directly involved with creating value for a brand, very often in realtime. They are influencing and helping brands make product decisions. This involvement often extends to the process, design, or even customization of the end product.



 

theresabilly July 28, 2012

Some of my thoughts on this are that QR (digital image technology) and NFC (radio communication technology) are tools which have many similarities in features, risk and uses cases but are not the same and do have some major differences. As with any tool there are numerous considerations that come into play when deciding which is the right tool for a specific use case. One is not a better or worse tool the question is which tool is the right one for the job and which one do you trust with your message and brand and reputation. Some of the preferred capabilities of NFC technology are that NFC is based on a global standard, (QR has multiple standards), NFC is native to the device(s), (QR needs an app to be downloaded) and the connection between two NFC devices is automatically established, (QR needs a scan to be initiated) including being accessed without the internet which you cannot do with QR. Free standing, these capabilities alone translate into NFC’s success as they provide the key components of forming a habit. The habit trigger is the global standard, which in most cases is also visual, and eliminates language and educational barriers too. The routine behavior of the habit is the “tap”, which works out of the box, and the habit reward is the connection and what it delivers. This extends to even greater engagement and reward potential. These are what is driving NFC technology’s’ omnipresence. Other perceived benefits of NFC refer to application. NFC use is not negated by environmental conditions like sunlight or poor lighting. A smudge in the print run won’t ruin the tap delivery. Every NFC tag has a unique ID which is important from both and information delivery and analytic perspective. From the overall security perspective NFC has built in security and tags can be locked. QR code images cannot. From a consumer, employee and business perspective NFC can be a reliable, trusted form of message delivery. Hope this was helpful.


AHG June 27, 2012

We really need to hone in on the Demand Side; i.e., why would end users (businesses and/or consumer) want NFC tagging over QR. In that context is the former willing to pay for the incremental difference of NFC vs. QR tags (not talking here about payments or peer-to-peer, e.g., smartphone to smartphone or smartphone to payment terminal), and why would the latter demand it. I have been in the RFID space since 1996, so am very familiar with all aspects of it, and am big booster of NFC; but addressing this demand side is critical.

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