I spoke with a manager of a jewelry store recently about using RFID technology. She is in charge of the day to day administrative operations of two retail stores.

All through our meeting, she associated RFID solely with getting her staff less work so that they can knock off from work earlier. But really, I was not getting through to her about ROI. She was looking at RFID from a b-r-o-a-d perspective. B-r-o-a-d perspective generalizes RFID implementation, while disregarding specific RFID strategies that can mean enormous savings for the organization. It paints a picture of luxuries, the company can afford NOT to have.

I believe RFID ROI will only make sense when implementation is highly focused, targeting to fit / improve / newly enable specific roles within the business. Wide scale RFID implementation across multiple supply chains, interchangeably among companies is unlikely to happen not unless the RFID prices fall further. The alternative for RFID integrators who are looking to create a valuable proposition for their clients must examine the places RFID can fit and expand current business capabilities. Look at opportunities where RFID can optimize processes, enable a new business function that places the company above its competitors.

The obvious calculator are

1. Time-savings, bulk scanning versus per item scanning
2. Cost per error
3. Savings in cost of labour - E.g. 10 men vs 3 men in annual costs
4. Value of timely data acquisition which ties in with my next point
5. Quantify inventory efficiencies

Look into the chief bottlenecks of the current system for applicable RFID areas.

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Like it or not, RFID is here. There is a growing population seeking to learn more RFID stories, RFID middleware, RFID equipment, RFID myths, RFID everything. I thought it will be interesting to compare the number of searches for RFID in comparison for the technology it is displacing or replacing.

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It is traditional to justify an investment in RFID technology far more superior than barcodes system. Often the key ROI is calculated in terms of operational productivity. While this is wonderful news to companies that are looking for systems that drive bottomline downwards, there are greater RFID treasures waiting to be uncovered. Today at a meeting with a director from Schimidt Electronics, he painted his vision of RFIDed solutions in various verticals. He was literally going in circles about creating efficient inventory channels for various applications.

Lets fast forward backend supply chain RFID usages to the heart of retailing. The question I am more interested is exploring how can RFID help drive revenues through enhanced customer experience? Could RFID enable in-store products that connect with shoppers emotionally? RFID can define new personalized customer interaction. RFID is an investment for a remarkable experience, that differentiates itself from other stores offering similar products. RFID ROI figures for customer centric usages makes up equally well if not better than backend supply chain management stories.

• This is another story about how RFID is used to create a novel feature that resulted in a sold out. When Star Wars Episode I was released, Hasbro, a toy manufacturer produced models of Darth and other SW characters with embedded RFID tags in them. Using an accompanied RFID reader, it will recognize its character based on the tag and plays a cool liner dialogue from the movie. It was a runaway success, driving increased sales for the toy company. That was quite a connection RFID helped achieved with customers.
• A possible scenario in the jewelry retail. The service staff removes a tagged piece of jewelry from the showcase, places it on a RFID tray and offers it to the customer. During this time, the RFID integrated media system detects the presence of the tag via the RFID tray, retrieves its information and plays a relevant video of a model wearing the jewelry on the nearby plasma screen. The system also remembers the number of times the jewelry product has been requested. It gets more interesting when product sales is compared to its actual display placements.
• The same idea can be adapted for a fashion store. As the shopper walks into the changing room to try on the new clothing, the RFID reader detects the tagged clothing and plays a personalized promotional video of the product. In UK London, Marks and Spencer rolled out RFID trial stores over 9 stores. By 2006, the number of Marks and Spencer stores participating will extend to 42. The application was intended to ensure optimum on-shelf product availability for their customers. I would think the application can easily be extended to include product marketing within their stores.

There are probably a dozen and more innovative retail uses for RFID. I think I will add to this list as I learn more. If you have other ideas or heard of others, feel free to leave a comment and I will update the list.

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We have added a couple of niceties to the latest version of Enterprise Jewelry Software Solution. The advance search capabilities of the software is one of the celebrated new features that we have included. Previously the system could only retrieve jewelry items information using a unique serial number or by barcode scanning the physical product. With the latest inclusion, the search capabilities has gone up several notches. The team provided a list of search criterias that users can specify to match and retrieve relevant search results of jewelry items. To retrieve a useful small set of relevant results among tens of thousands of different jewelry combinations, this new feature is God-sent. In particular, we added a keyword search function. So for instance if the customer asked for the availability of “butterfly” shaped pendants, the user selects the relevant dropdown list for CATEGORY (e.g. pendant) and type in the text “butterfly” in the KEYWORD textfield and hit enter. What follows is a result list of pendants of various types (metal or stone combinations) that are associated with the text “butterfly”.

Click to view screenshot

The system also provides both RFID and barcode modules, depending which flavour you prefer.

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Mobile Phones are definitely the biggest phenomenon since the PC era. They form an integrate part of our lifestyle, whether for business or private. That said, it is not surprising that in 04 Nokia launched phones with built in RFID technology. At another website, I read recently that ABI Research predicted RFID is increasingly gaining traction in phones. The estimated number is somewhere in the region of 50% of all manufactured phones by 2009. A few days ago, I was asked to suggest some RFID ideas for the hopitality industry. Yearly I do abit of traveling, so the idea was formed on that basis that I can enjoy its benefits some day.

This may happen some day in a future not far away. From the comfort of my home, I logon the Internet and make a room reservation over the Internet. When performing payment, RFID scanner in my computer negotiates payment information stored in the RFIDed mobile phone. This causes a payment signature to be sent to the hotel’s designated payment gateway. Upon completion of payment, the hotel Internet server sends a SMS to my mobile phone containing Hotel Access Code information. The resident RFID module installed in the mobile phone accepts and stores the access code. Up till here, my hotel reservation is settled. Although it sounds complicated, but all I really need to do is click “OK” for payment, and a second “OK” for receiving the Hotel Access Code SMS. Way cool. So you may ask, what is so good about having RFIDed phone to get around the hotel? In one of my travels, I flew for 20 hours halfway around the world and on arrival at the hotel I had to wait almost an hour to finally get to my room! If I can just suggest this scenario with RFID. On reaching the hotel, instead of going up to the service counter get in the queue and wait to be checked in, I can walk straight for the elevator. Placing my mobile phone over a RFID scanner in the elevator, the system validates the access signature stored in my phone and takes me to the right floor (level) where my room is located. At the door of my room, I will only need to wave my RFIDed phone like a magic wand and BINGO the door opens for me. The wonderful thing is I DONT HAVE TO WAIT, minimum delays to get much needed sleep! On the hotel backend system, the RFID enabled system detects the hotel access code on my mobile phone and checks me in automatically as a new visitor. The building wide RFID enabled system continues to provide me immediate access to all the other services provided. This means I can use my RFIDed phone to access other amenities like the gym, pool, business lounges etc - almost without any hotel assistance or anyone to validate if I am a “real” customer.

Using RFID, hotel services can be enhanced and geared towards providing highly personalized experience for the visitor instead of clogging its capacity with routine impersonal tasks. Streamlining operational processes using RFID technology can further enhance and shorten time to respond customer’s needs. This can include waiting to access certain services as mentioned, or assigning the closest “tagged” hotel personnel to attend to the customer. Case in point, early this year I went on a vacation at a nearby resort in Bali. In order to gain access to Internet services, I had to register myself and show proof that I was truly a patron of the resort at the Business Service Centre. That did not take much out of me, but I thought it could have been faster to get me what I need. If RFID was in place, I could simply walk to a free Internet station, wave my RFIDed phone over the keyboard which automatically validates “I AM A PATRON” access and logins me into the Internet immediately.

Love it or hate it, RFID is making its rounds into every room of human existence. From backend processes, to mid level processes to interacting with customers direct. The further the international community advances towards a common RFID platform, language and sets of protocols enabling different RFID devices to intelligently communicate with each other, the greater the level of innovation for meaningful technology for us. These will be interesting to watch…

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I am not sure if it has happened, but I am sure it can. In reality, as RFID makes its way into retail stores it is fairly trivial to built systems that recognize customers, record shopping behaviour and recommends alternate purchases etc. In 2003, MetroAG opened the “Store of the Future” that showcased RFID among other technologies. The system uses a combination of pallet level tagging and itemized level tagging for its entire supply chain. The part of the story that interests me the most is how it uses RFID within retail spaces. Metro AG employs a form of “proxy” tagging of customers. Customers are not tagged directly, however each shopping cart is RFID tagged. The shopper scans his ID card via a computer screen attached on the cart, and WALA he automatically places himself under the scope of “marketeers”. The system will be able to record his shopping behaviour as he pushes the RFID-ed cart about. So why will he do that? Well, a compelling benefit to any shopper is when he can save himself from long queues while the cashier takes his time barcode scan one item after the next and chats with his next hop neighbour. At “Store of the Future” by the time the shopper pushes his cart alongside the payment counter, he is immediately greeted for payment. This is because all the items are already scanned, recorded and sent wirelessly to the counter before he was even halfway through his shopping list. There are various other “niceties” to the RFID system as a shopper at “Store of the Future” but I guess I have only mentioned the ONE benefit that I will be suckered into.

There has been many debates surrounding privacy. More has to be done on the issue of privacy surrounding RFID. Part of the privacy problem may just be resolved with a formulation of an open protocol, agreed on by an international standards committee. This protocol can empower the user to give “grants” to the extent of information the system can use of his credit card, identity card, passport, buying history, and anything one can think of that inflict on privacy of the individual. This way the system places the power of choice back into the hands of its users. Let the users decide how much of their information will be known. At the end of the day, to enable RFID systems to make intelligent recommendations (or guesses) for purchases, alert dangers, advise alternatives it has to know something about the shopper. Lastly I must add it is our right to privacy as it is equally our right to useful technology that could add quality into our lives.

Anyway that said, this is worth a few laughs …

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For me, integration of technology stops at the point where it transgress my human form. It disturbs me alittle to know there are willing volunteers who choose to embed foreign tracking devices into their body while it is not absolutely necessary. The link here takes you to x-rayed photos showing RFID implants of Amal Graafstra.

This is a video that shows a real life RFID chipping. Please do not try this at home.

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RFID has alot of possibilities for retailing which we only dream about in the 90s. For example, RFID enables retailers to track customer shopping behaviour, and essentially deduce how well the shop real estate space is maximized. Having this data which was traditionally difficult to acquire in the context of a store that displays thousands of products, has enormous potential at enhancing sales revenue. Ultimately what this means is the company is rewarded with greater profits for successfully enabling RFID in its operations. In the past, retailer relied on guesswork or historical data to predict product trends. With RFID-ed stores, the retailer is empowered with real-time marketing information that is associated with each product. The retailer could know the “shelf-life” of the product, the number of times the customer has viewed the product relative to the product physical positioning, and the number of remaining product items in the shelf. Based on real-time information dynamic pricing strategies may be implemented to further enhance sales results.

Using RFID for consumer data collection and analysis, far outweighs the cost benefits of using the technology solely for inventory management. Of course combining the applications of RFID will most certainly enhance the entire business performance.

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I found this this online video recorded by Intermec Education Services, on google the other day. It has good video content that describes companies that have successfully implemented RFID for their supply chain management and warehousing operations.

Watch Video here

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