June 6, 2007
Best Buy Focusing RFID Efforts at Front of Store
Consumers need to know that radio frequency identification (RFID) technology is not an Orwellian nightmare and that it can provide real benefits if properly deployed at retail. That’s why, Bob Willett, CIO at Best Buy, believes it is up to his company to explain the benefits of the technology to consumers.
According to a Computerworld report, Mr. Willett said Best Buy is concentrating its efforts on the front of the store to provide consumers with concrete examples of how RFID can be used to help make shopping easier.
One future opportunity, he told an audience at the ERIexchange show, was using RFID to automate the payment process and move consumers through the store.
“Before I’m carried away in a box, I’d like to see checkouts gone from the store,” he said. “The technology is there to do it today with RFID. The first major retailer that can do it will be remembered forever and a day as a champion of the consumer.”
To date, said the Best Buy CIO, the company has run pilot RFID projects focused on the front of the store even though most others have concentrated on the back end. One project, he said, involved using Generation 1 RFID technology to help customers more easily locate items in Best Buy stores. In one of its tests, Best Buy was able to increase video game sales using RFID to take the hunt out of the shopping experience.
Discussion Questions: Where do you see the greatest potential for RFID technology to be deployed on the selling floor? Are consumers ready to hear a message about the benefits of RFID and put aside doubts connected to the privacy issue?
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I am totally enamored with RFID in a particularly specific way. I envision online kiosks available to customers in stores where they can search for products, locate them on the sales floor, determine if they’re available in their size either on the sales floor or in the back room, or order the products online. Of course, this screws up the impulse sales and new product display opportunities generated by forcing customers to wander sales aisles in bewilderment. But was customer bewilderment ever a retail goal?
Here’s a basic question regarding the development of RFID: Will it work best and fastest when driven by consumers or driven by suppliers and retailers? The marketing-savvy will recognize this as the elemental juxtaposition of consumer-driven “pull strategy” and supplier/retailer-driven “push strategy.” Consumer-beneficial RFID applications should be developed first.
Some consumers are ready to hear a message about the benefits of RFID and put aside doubts connected to the privacy issue, and some will never be ready for that message. There are wide variances on how people perceive and think about all privacy issues, including even phone tapping even to help prevent terrorism, let alone RFID. Some folks, probably about one forth, just have a huge problem with any invasion on privacy no matter what the logic, reason, or result. Others, probably about one forth, are willing to give up any reasonable privacy rights or privileges, if the end result means safety, security, and overall public benefit. The other half of the public is in the middle, and they will go along or tolerate RFID, but they will shift with each negative news development, mishap, or any bad experience that impacts them or a family member personally. At the end of the day RFID is here and here to stay, expand, and grow, for any number of obvious reasons.
Best Buy’s moves on RFID are admirable, as this is the only way the technology will eventually grow to benefit both the consumer and retailer. RFID, however, is just a part of the infrastructure needed to truly deliver benefits. We need product information transmitted from the shelf to the consumer and an easy way for consumers to register a purchase at the shelf itself. Beyond that, there must be a high speed communications capability down to the shelf that connects back-office intelligence so the retailer can truly “serve” the consumer while in store. Inherently, past consumer-focused solutions suffered from an inability to “know” the consumer is in-store until he/she leaves through the checkout. This is the challenge to be resolved if we are to truly improve the shopping experience and better serve the consumer. RFID in the store needs an accompanying capability that can automatically recognize the presence of the consumer, activate back-office intelligence, (CRM, sales history, preferred shopper details, individual profiles, etc.), and have this available to react to the consumer as purchases are made and registered via communications between an RFID enabled shelf tag and the consumer. What the consumer needs to effect this communication is still to be determined. In some cases, retailer supplied scanners can be used, but these are expensive, and require additional consumer acceptance. Almost every consumer has a cell phone with its own unique identifier, capable of send/receive, and in most cases, receipt of images. It is the ideal personal communications device. Cell phone technology in combination with RFID, WiFi and NFC capabilities might address the consumer “registration” piece, but then there is the need for rapid response information extraction and provisioning to enable the retailer to achieve the objective of marketing to a market of one, the ideal of consumer-centric merchandising. This dictates the need for high speed communications between the back-office systems and the stores. All these technologies exist today, but they need to be applied in a coordinated way to achieve an in-store environment of easy shopping without concerns of privacy and imposition. It can be done, and Best Buy should be applauded for taking the first steps.
I rather doubt most shoppers have much awareness of RFID’s existence, or knowledge of how it works, much less any opinion about its potential benefits and risks. An electronics store like Best Buy could be an appropriate place to introduce the concept to early adopters, although it might distract from messages about product features and benefits.
Did Mr. Willet of Best Buy really say RFID is the “single biggest opportunity” for his company, as the article states? Wow I’d like to see more substantiation for that opinion, or at least more context from the reporter. Eliminating front-end checkout lines is a laudable goal, but some sort of payment stations or other distributed payment process would be needed around the store, I think. Maybe hand-held devices for associates would enable this.
The option missing from the poll today is “don’t know and don’t care”–and that’s where most consumers will be until RFID becomes something tangible that they can pronounce. Discussion of “RFID” benefit and threat are much more a product of industry and interest groups than Joe Shopper. Joe Shopper does have concerns about privacy and “big brother” but tying those to something called “RFID” directly is a stretch.
To continue on the theme of the wildly popular “shopping challenged male” earlier this week, let’s use RFID to alleviate ALL shopper’s perennial question of “where’s the beef…tenderizer?” As BBY has shown in their pilot with video games, sometimes taking the “treasure hunt” out of shopping is exactly what consumers want.
With all due respect to those who have touted RFID’s benefits, the technology is still just that–a technology. Until there is a measurable Cost Benefit/Return on Investment, RFID will not move beyond its infancy. Witness Wal-Mart’s subtle “demand” for RFID compliance; instead of Companies implementing “full blown” RFID Solutions, they are instead opting to do “just enough” to satisfy Wal-Mart. Can you say “Slap and Ship”? For these Suppliers, the only benefit is continuing to be a Wal-Mart Supplier. Yes, Best Buy is–at least–willing to take the talk “public”; but we are still “years away” from the IBM “vision” of walking into a store, putting items in your pocket, and leaving the store–having not “touched” the Check-Out Counter, etc.
Consumers’ objections need to be addressed and discussed openly via real dialog, not brushed aside or denigrated as “paranoid.” Continuing to just tout the benefits is not addressing objections, it is selling, and it can just make uncertainties worse. Obviously, there are experts on both sides of the issue, and it does none of us any good to denigrate these either. It is interesting to wonder why this topic has become so emotional for so many people–what do we have invested here that we are afraid of losing?
It all reminds me how our society overall is not all that good at processing information that may challenge our assumptions. If our society is not terribly good at this, you can be sure that neither are our business organizations or industry groups or consumer advocacy groups. It is all about Master Systems and Defense Structures that block and distort important, valid information, so that all we end up doing is calling each other names and ignoring our real concerns.
I see the greatest potential for RFID technology to be deployed on the selling floor, to be in the area of inventory management and being able to stay on top of “out of stock” situations. This will help reduced markdowns due to excess inventory and will improve the bottom line. This in turn will help manufacturers/suppliers do a better job of production planning and help them save their expenses.
Consumers won’t care about RFID’s benefits until RFID benefits them. Bob Willett’s vision of no checkout lines or delays at Best Buy would be a big benefit to shoppers, maybe the best benefit imaginable. Most RFID applications have no direct benefit to shoppers. Their goals are to improve the retailer’s infrastructure (in-stock position, shelf stock vs. warehouse stock, promotional display tracking, etc.)
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I am totally enamored with RFID in a particularly specific way. I envision online kiosks available to customers in stores where they can search for products, locate them on the sales floor, determine if they’re available in their size either on the sales floor or in the back room, or order the products online. Of course, this screws up the impulse sales and new product display opportunities generated by forcing customers to wander sales aisles in bewilderment. But was customer bewilderment ever a retail goal?
Here’s a basic question regarding the development of RFID: Will it work best and fastest when driven by consumers or driven by suppliers and retailers? The marketing-savvy will recognize this as the elemental juxtaposition of consumer-driven “pull strategy” and supplier/retailer-driven “push strategy.” Consumer-beneficial RFID applications should be developed first.
Some consumers are ready to hear a message about the benefits of RFID and put aside doubts connected to the privacy issue, and some will never be ready for that message. There are wide variances on how people perceive and think about all privacy issues, including even phone tapping even to help prevent terrorism, let alone RFID. Some folks, probably about one forth, just have a huge problem with any invasion on privacy no matter what the logic, reason, or result. Others, probably about one forth, are willing to give up any reasonable privacy rights or privileges, if the end result means safety, security, and overall public benefit. The other half of the public is in the middle, and they will go along or tolerate RFID, but they will shift with each negative news development, mishap, or any bad experience that impacts them or a family member personally. At the end of the day RFID is here and here to stay, expand, and grow, for any number of obvious reasons.
Best Buy’s moves on RFID are admirable, as this is the only way the technology will eventually grow to benefit both the consumer and retailer. RFID, however, is just a part of the infrastructure needed to truly deliver benefits. We need product information transmitted from the shelf to the consumer and an easy way for consumers to register a purchase at the shelf itself. Beyond that, there must be a high speed communications capability down to the shelf that connects back-office intelligence so the retailer can truly “serve” the consumer while in store. Inherently, past consumer-focused solutions suffered from an inability to “know” the consumer is in-store until he/she leaves through the checkout. This is the challenge to be resolved if we are to truly improve the shopping experience and better serve the consumer. RFID in the store needs an accompanying capability that can automatically recognize the presence of the consumer, activate back-office intelligence, (CRM, sales history, preferred shopper details, individual profiles, etc.), and have this available to react to the consumer as purchases are made and registered via communications between an RFID enabled shelf tag and the consumer. What the consumer needs to effect this communication is still to be determined. In some cases, retailer supplied scanners can be used, but these are expensive, and require additional consumer acceptance. Almost every consumer has a cell phone with its own unique identifier, capable of send/receive, and in most cases, receipt of images. It is the ideal personal communications device. Cell phone technology in combination with RFID, WiFi and NFC capabilities might address the consumer “registration” piece, but then there is the need for rapid response information extraction and provisioning to enable the retailer to achieve the objective of marketing to a market of one, the ideal of consumer-centric merchandising. This dictates the need for high speed communications between the back-office systems and the stores. All these technologies exist today, but they need to be applied in a coordinated way to achieve an in-store environment of easy shopping without concerns of privacy and imposition. It can be done, and Best Buy should be applauded for taking the first steps.
I rather doubt most shoppers have much awareness of RFID’s existence, or knowledge of how it works, much less any opinion about its potential benefits and risks. An electronics store like Best Buy could be an appropriate place to introduce the concept to early adopters, although it might distract from messages about product features and benefits.
Did Mr. Willet of Best Buy really say RFID is the “single biggest opportunity” for his company, as the article states? Wow I’d like to see more substantiation for that opinion, or at least more context from the reporter. Eliminating front-end checkout lines is a laudable goal, but some sort of payment stations or other distributed payment process would be needed around the store, I think. Maybe hand-held devices for associates would enable this.
The option missing from the poll today is “don’t know and don’t care”–and that’s where most consumers will be until RFID becomes something tangible that they can pronounce. Discussion of “RFID” benefit and threat are much more a product of industry and interest groups than Joe Shopper. Joe Shopper does have concerns about privacy and “big brother” but tying those to something called “RFID” directly is a stretch.
To continue on the theme of the wildly popular “shopping challenged male” earlier this week, let’s use RFID to alleviate ALL shopper’s perennial question of “where’s the beef…tenderizer?” As BBY has shown in their pilot with video games, sometimes taking the “treasure hunt” out of shopping is exactly what consumers want.
With all due respect to those who have touted RFID’s benefits, the technology is still just that–a technology. Until there is a measurable Cost Benefit/Return on Investment, RFID will not move beyond its infancy. Witness Wal-Mart’s subtle “demand” for RFID compliance; instead of Companies implementing “full blown” RFID Solutions, they are instead opting to do “just enough” to satisfy Wal-Mart. Can you say “Slap and Ship”? For these Suppliers, the only benefit is continuing to be a Wal-Mart Supplier. Yes, Best Buy is–at least–willing to take the talk “public”; but we are still “years away” from the IBM “vision” of walking into a store, putting items in your pocket, and leaving the store–having not “touched” the Check-Out Counter, etc.
Consumers’ objections need to be addressed and discussed openly via real dialog, not brushed aside or denigrated as “paranoid.” Continuing to just tout the benefits is not addressing objections, it is selling, and it can just make uncertainties worse. Obviously, there are experts on both sides of the issue, and it does none of us any good to denigrate these either. It is interesting to wonder why this topic has become so emotional for so many people–what do we have invested here that we are afraid of losing?
It all reminds me how our society overall is not all that good at processing information that may challenge our assumptions. If our society is not terribly good at this, you can be sure that neither are our business organizations or industry groups or consumer advocacy groups. It is all about Master Systems and Defense Structures that block and distort important, valid information, so that all we end up doing is calling each other names and ignoring our real concerns.
I see the greatest potential for RFID technology to be deployed on the selling floor, to be in the area of inventory management and being able to stay on top of “out of stock” situations. This will help reduced markdowns due to excess inventory and will improve the bottom line. This in turn will help manufacturers/suppliers do a better job of production planning and help them save their expenses.
Consumers won’t care about RFID’s benefits until RFID benefits them. Bob Willett’s vision of no checkout lines or delays at Best Buy would be a big benefit to shoppers, maybe the best benefit imaginable. Most RFID applications have no direct benefit to shoppers. Their goals are to improve the retailer’s infrastructure (in-stock position, shelf stock vs. warehouse stock, promotional display tracking, etc.)