Single German men buying clothes at Galeria Kaufhof, in Essen now
have no excuse for not looking their best. The store’s menswear
department has been trialling the MagicMirror, which uses a Radio
Frequency Identification (RFID) reader to project helpful information about potential
purchases onto a screen in its changing rooms. If a customer tries on a shirt, say, the
changing room’s “interrogator” reads its RFID tag and the mirror displays available colours
and sizes, and suggests accessories.
Customers can also summon advice by
touching the MagicMirror, sending a signal
via Wi-fito a salesperson’s PDA. Braver
shoppers can also text passwords to friends
who log-on to see live videos of the person
trying on clothes and text back comments.
Soon, shopping will even be more daunting
for shyer customers, as convenience and
speed are likely to come at the cost of privacy.
Benefits to retailers depend on collecting
and exploiting more information including
individual preferences and buying history.
Retailers can now track the movements of
shoppers when their mobile phones are GPS-equipped.
Location-based mobile advertising
can then send a coupon to the shopper as they
approach a particular store. The same mobile
phone will soon become a payment medium
akin to a smart card, potentially slashing
the inefficiencies of time-sapping cash or
debit card payments. It will also become the
depository for mobile coupons and customer
loyalty points. One Italian retailer is already
implementing this ‘follow me’ system.
Whether this is Nirvana or Big Brother
depends on age. Those over 25 are generally
reluctant to share personal information for
anything less than very substantial benefits,
so the EU is considering legislation to protect
privacy. Retailers contend that this marketing
model aims to make shopping a more personal
and therefore more satisfying experience.
“Eventually services will be tailored to
individuals,” says Mung Ki Woo, vice president
for payments and contactless
services at Orange. “Retailers can put
branded applications within phones, display
messages according to preferences or remind
customers of in-store promotions. Users can
connect to websites, monitor loyalty points,
or order new products. Moving loyalty cards
to mobiles means they are now interactive,
more flexible and cheaper than plastic or
paper.” Juniper Research says three billion
mobile coupons could be issued by 2011.
However, regardless of technical wizardry,
if new systems do not trim costs or promote
sales, retailers will not touch them.
The same technologies are being applied
to streamline supply chains. As well as RFID
there is Near Field Communications (NFC),
designed to support contactless payments,
NFC enables a raft of new services potentially
turning mobile phones into universal data
readers. When buying doughnuts in a grocery
store, for instance, consumers could wave
their phone over the label and see a list of
ingredients and nutrition information.
By 2011, around 450 million handsets
will be NFC-enabled, giving retailers a new
interface to existing payment systems and
advertising information.
This revolution is evolutionary. Many
companies are integrating stock and delivery
systems, employing technologies designed
to enhance the shopping experience. Next generation
systems promise greater speed
and productivity, better stock control and
higher-spending, loyal customers.
In general, though, Europe is only following
where Asia has led. Clemens Schwaiger,
consultant at Analysys Mason says by the end
of last year around 49,000 Japanese shops were
using mobile payment systems. This resulted
in around 15 million transactions monthly.
Koreans pay by mobile at around 80,000
POS terminals and Malaysian shoppers do
not need PINs for low-value goods. Retailers
get faster transactions. “The real difficulty is
in how to make systems compatible across
currencies,” says Schwaiger.
Location-based mobile advertising is a
mainly Asian activity. Singaporean mobile
operator M1 sends half a million ad texts in a
weekend on behalf of its 40-plus retail, bank
and airline customers. Chief executive Neil
Montefiore explains: “There is a limit of two
messages per customer per day; they must be
within 50 metres of the outlet and messages
must be beneficial not intrusive. They may
offer discounts if people enter stores within
specified times: in one weekend an ice cream
shop increased sales by 500 units.”
Retailers are also connecting front- and
back-ends, streamlining and integrating
websites, contact centres, catalogues and
outlets making them all seamlessly accessible
from various fixed and mobile devices.
“There is a seismic shift in the online
market which will grow from 8.5% this year
to 15.8% in 2011,” says John Davison, an
analyst at Gartner, an IT research company.
“Retailers who survive will have the best
integrated systems.”
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