February 1, 2007
‘Store of Future’ is RFID Driven
Who needs a store employee in the cosmetics department when you have radio frequency identification (RFID) tags and readers?
The Japanese department store chain Mitsukoshi is involved in a RFID trial with the cosmetics firm Shiseido as part of what is being called the “department store of the future.”
The test involves embedding tags on a number of Shiseido cosmetics. Customers picking up products can get information on the particular item by holding it up to an interactive screen with a RFID reader. The idea is to provide consumers with an “electronic concierge” that will be able to help them when a store clerk is not available. In theory, it should speed up service and improve customer service.
On the marketing and merchandising insights side, the information gathered will provide a clearer picture of how consumers evaluate and sample products.
“Since two years ago, Mitsukoshi and the Department Stores Association were already doing this type of field trial, and they decided to bring this to the cosmetic floor,” Mari Hayashi, Shiseido’s public relations representative, told RFID Journal. “Then they asked us to collaborate on this.”
Shiseido has attached RFID tags to a number of cosmetics displayed in tester stands. The stands are embedded with readers that can capture how customers sample items before deciding to make a purchase or not.
Staff in the store is supplied with tablet PCs with readers to track a customer’s history at a particular counter. The PC also contains overall profiles and purchasing histories of registered customers.
Amy Ishida, Fujitsu’s Tokyo director of public and investor relations, said, “Displaying the purchasing history on the screen will enable the customer and salesperson to see details regarding which products the customer purchased, and when, without needing to rely on memory.”
In a separate portion of the trial, Shiseido is testing RFID tags along with PCs with readers in a variety of virtual homes.
“In the future, some customers who do not have time to view product information in-store may prefer to view such information at home,” Ms. Ishida said. “Yes, it is anticipated that some customers may wish to have a tag reader at home.”
Discussion Questions: Do you see a future where radio frequency identification tags and readers create the types of shopping and home environments envisioned by Mitsukoshi, Shiseido and Fujitsu? Just how far will RFID or other technical advances take retailing in the years to come?
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Any opportunity for U.S. retailers to [reduce] sales staff headcounts (and benefits) will be warmly greeted by management. Any opportunity for shoppers to get accurate information without waiting in line will be warmly greeted by consumers.
First of all, we’re talking about Japan here–the same country that just marketed cell phones that “smell” (release a variety of scents) and that pioneered a fully automated retail concept which included a machine that allowed consumers to buy ham one slice at a time. So, let’s set aside an apparent cultural penchant for marrying the mechanical with retail, and look at the question in a different light.
Will RFID transform American retailing (at scale)? The answer is a guarded, “probably.” How? The right answer is, right now any guess is as good as any other. The history of retail technology is full of false positive starts and technological leapfrogging. For all we know, Intel or someone else may already have a beta of a technology that will make RFID obsolete. And, that’s the problem–we don’t know. The tricky part of the question was that “…or other technical advances” piece. If we knew the answer to that, would we be here?
Assuming RFID survives as a dominant retail technology (keep remembering all those nice target bar codes that were so promising in the 1970s) we still don’t know how (or if) it will work through the entire supply chain.
There are a few thing factoring in here and Ryan hits on some of the key ones.
These types of trials are indeed happening in the US…they’re just happening quietly in concept stores. The goals are the same as Japan’s are: how does it impact the shopper, do they like it and what can be done better to gain acceptance?
Personally, I feel that these types of tools are helping to solve the critical issue of getting–and giving–better customer experiences. But no one wants to feel overwhelmed or invaded by the technologies. It’s up to us to find the right balance between helping and intimidating and deploy these tools as an almost “invisible” piece of the shopping equation–the goal being concierge-quality help.
The other opportunity for RFID is that if it’s done correctly, it can empower a consumer…something almost all are demanding in this day and age. But a key part of empowerment is control. There is a fear that those that are after the “captive audience” carrot will abuse RFID and shut it down quickly due to invasive and intrusive strategies.
People want to control who they talk to, how, what information is being shared, what products they purchase and when to open or close the door to the brand relationship. They will not tolerate any of these new tech tools if they don’t respect this.
There is a correct strategic mix with RFID (and any other new tool) that will likely make both the retailer and the shopper happy. But we’re going to have to hypothesize, test and evolve, evolve, evolve. We’re also going to have to bring smart people together to make this happen and suffer plenty of failures to get there. Let’s try be kind to those failures because the first to get out there will be paving the way for the rest of us…I just hope they do it responsibly.
Whether it is RFID or some other technology, the idea of giving customers immediate access to reliable and informative product information is huge. Think of all the complaints we hear about finding a knowledgeable salesperson in Home Depot these days. Then think about where Americans now go for quick access to reliable product information and for comparison shopping (the internet). Put the two together at the point of purchase and it has got to be a winner.
Once again, as is so common with trade magazine articles about RFID, it is presented that it is RFID some how making this happen.
As several readers above pointed out, the “identification” of the product could easily be done with bar codes – and maybe could be done more economically. The identification aspect here is no different than the many stores that offer price look-up functionality by scanning the UPC code. The difference here, I guess, is that there is a software application that adds more functionality in terms of product info upon product identification.
As someone else noted, we are in part clearly on a path here towards eliminating the store associate, the way airline kiosks are eliminating the ticket agent – technology that is now even finding its way into hotels. And I must say, I rarely wait long to get my boarding pass these days.
The only real RFID-pertinent aspect here is a somewhat vague description of gaining insight into what consumers are doing in terms of looking at products. It suggests that RFID reads of some kind are monitoring that a customer picks up and takes a look at product A for a X minutes, then product B, etc. Maybe that behavior is just tracked when the product is presented to the reader at the info screen. Regardless, and even recognizing this is not tracked at the specific, identified customer level, this use of RFID is just getting creepy, like the Meijer shopping cart tracking references before on these pages, and I sure hope customers rebel.
Let’s track product every step of the way through the supply chain, but let’s not be monitoring what customers do in the store. Yeck.
RFID tags do not replace human contact. They can, however, provide product information. Since a clerk can only wait on one customer at a time, RFID tags can provide useful information to those customers waiting to ask other questions. Unless the RFID is active and set up to record what consumers do, all the RFID tags can to is transmit information. If the RFID tags are active, they can track the customer’s behavior in terms of what they pick up and how long and what is next. Unless the RFID tags also have consumers respond to questions, they have no idea what consumers are thinking or they responded to the product they looked at, or why they set it down to look at something else. Unless a voice is recorded on the RFID tag and programmed to respond to consumer questions, there is not much human interaction. I don’t think the RFID tags do everything–at least not yet.
The jewelry-cosmetics counter areas in department stores are among the most inefficient spaces in retail in terms of delivery of good customer service. It seems that they are always either over or understaffed and in the latter scenario it can be frustrating for customers waiting for service at the “busy” counter while scores of other personnel, who are not cross-trained, stand idle at other counters. This is particularly true when the customer knows what they want and simply wants to make the purchase.
If there was a self-service option to bypass the wait, I believe it would facilitate better customer service and increase sales for the retailer.
Tag ’em all and let the marketers sort ’em out.
Wow, that’s a creepy idea from where I sit, but maybe I’ve read too many bleak science fiction novels.
The Shiseido concept is clever as a proof-of-concept. Linking the countertop devices to personal profiles seems to have nothing to do with RFID, however.
The more I follow the item-level RFID saga, the more it’s starting to look like its applications are likely to turn obsolete at just the moment they are technically perfected.
I’m generally pro-technology, but tools are just tools. It’s the business practice that matters. Give a 10-year-old a hammer and suddenly everything needs pounding. Give an industry RFID and suddenly everything needs tagging.
When we have to strain to invent customer services that justify the application of the tag to small consumer items, we just might have our values out of line.
What’s odd about the Mitsukoshi test with Shiseido is that RFID isn’t needed. The bar code would accomplish the same result, at a lower unit cost.
I’m not sure how RFID tagging is a substitute for human contact in a customer service-intensive department like Cosmetics. But in a broader sense RFID (or similar technology) can be a giant leap for merchants beyond bar code technology in terms of tracking inventory through the supply chain and in the store, customer checkout and other point-of-sale issues. Thinking bigger about RFID as a marketing opportunity, others have pointed out that RFID-seeded credit cards can even alert stores when their “preferred customers” walk into the building so they can be approached and assisted if they want. Maybe a touch of “Brave New World,” but with real sales-driving implications.
Best practice retailers of the future will find the optimal combination of personal service and appropriate technological applications. RFID tags are very likely to be one of those technologies.
I agree with a recent article in Customer Relationship Management Magazine that predicted “always on, always connected” will be the prevalent way to conduct business within 10 years. The author, Barton Goldenberg, forecast elements of this scenario: “In sales it will mean real-time inventories and collaborative selling where the buyer plays a more active role in the sales process. In service it will mean both the pervasive use of self-service that builds off extensive real-time knowledge bases, and vendors that instantly alert customers to anything important (e.g., RFID tags attached to products and navigations systems that alert companies and customers to product movements in real time).”
I also agree with Michael Stonebraker of MIT, who predicts that over the next decade, everything of material significance will get sensor-tagged. This will include you, your kids, your car, and your (or your company’s) valuable possessions–everything.
Call me old fashioned. Call me a throw-back. Call me resistant to innovation. While I very much see the importance of RFID, I still want good, personal customer service. The experience described in the discussion article makes me feel as if the only difference between going into one of these new department stores and shopping on the Internet is the fact that I can pick up the product. I want to interact with a live human being!
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Any opportunity for U.S. retailers to [reduce] sales staff headcounts (and benefits) will be warmly greeted by management. Any opportunity for shoppers to get accurate information without waiting in line will be warmly greeted by consumers.
First of all, we’re talking about Japan here–the same country that just marketed cell phones that “smell” (release a variety of scents) and that pioneered a fully automated retail concept which included a machine that allowed consumers to buy ham one slice at a time. So, let’s set aside an apparent cultural penchant for marrying the mechanical with retail, and look at the question in a different light.
Will RFID transform American retailing (at scale)? The answer is a guarded, “probably.” How? The right answer is, right now any guess is as good as any other. The history of retail technology is full of false positive starts and technological leapfrogging. For all we know, Intel or someone else may already have a beta of a technology that will make RFID obsolete. And, that’s the problem–we don’t know. The tricky part of the question was that “…or other technical advances” piece. If we knew the answer to that, would we be here?
Assuming RFID survives as a dominant retail technology (keep remembering all those nice target bar codes that were so promising in the 1970s) we still don’t know how (or if) it will work through the entire supply chain.
There are a few thing factoring in here and Ryan hits on some of the key ones.
These types of trials are indeed happening in the US…they’re just happening quietly in concept stores. The goals are the same as Japan’s are: how does it impact the shopper, do they like it and what can be done better to gain acceptance?
Personally, I feel that these types of tools are helping to solve the critical issue of getting–and giving–better customer experiences. But no one wants to feel overwhelmed or invaded by the technologies. It’s up to us to find the right balance between helping and intimidating and deploy these tools as an almost “invisible” piece of the shopping equation–the goal being concierge-quality help.
The other opportunity for RFID is that if it’s done correctly, it can empower a consumer…something almost all are demanding in this day and age. But a key part of empowerment is control. There is a fear that those that are after the “captive audience” carrot will abuse RFID and shut it down quickly due to invasive and intrusive strategies.
People want to control who they talk to, how, what information is being shared, what products they purchase and when to open or close the door to the brand relationship. They will not tolerate any of these new tech tools if they don’t respect this.
There is a correct strategic mix with RFID (and any other new tool) that will likely make both the retailer and the shopper happy. But we’re going to have to hypothesize, test and evolve, evolve, evolve. We’re also going to have to bring smart people together to make this happen and suffer plenty of failures to get there. Let’s try be kind to those failures because the first to get out there will be paving the way for the rest of us…I just hope they do it responsibly.
Whether it is RFID or some other technology, the idea of giving customers immediate access to reliable and informative product information is huge. Think of all the complaints we hear about finding a knowledgeable salesperson in Home Depot these days. Then think about where Americans now go for quick access to reliable product information and for comparison shopping (the internet). Put the two together at the point of purchase and it has got to be a winner.
Once again, as is so common with trade magazine articles about RFID, it is presented that it is RFID some how making this happen.
As several readers above pointed out, the “identification” of the product could easily be done with bar codes – and maybe could be done more economically. The identification aspect here is no different than the many stores that offer price look-up functionality by scanning the UPC code. The difference here, I guess, is that there is a software application that adds more functionality in terms of product info upon product identification.
As someone else noted, we are in part clearly on a path here towards eliminating the store associate, the way airline kiosks are eliminating the ticket agent – technology that is now even finding its way into hotels. And I must say, I rarely wait long to get my boarding pass these days.
The only real RFID-pertinent aspect here is a somewhat vague description of gaining insight into what consumers are doing in terms of looking at products. It suggests that RFID reads of some kind are monitoring that a customer picks up and takes a look at product A for a X minutes, then product B, etc. Maybe that behavior is just tracked when the product is presented to the reader at the info screen. Regardless, and even recognizing this is not tracked at the specific, identified customer level, this use of RFID is just getting creepy, like the Meijer shopping cart tracking references before on these pages, and I sure hope customers rebel.
Let’s track product every step of the way through the supply chain, but let’s not be monitoring what customers do in the store. Yeck.
RFID tags do not replace human contact. They can, however, provide product information. Since a clerk can only wait on one customer at a time, RFID tags can provide useful information to those customers waiting to ask other questions. Unless the RFID is active and set up to record what consumers do, all the RFID tags can to is transmit information. If the RFID tags are active, they can track the customer’s behavior in terms of what they pick up and how long and what is next. Unless the RFID tags also have consumers respond to questions, they have no idea what consumers are thinking or they responded to the product they looked at, or why they set it down to look at something else. Unless a voice is recorded on the RFID tag and programmed to respond to consumer questions, there is not much human interaction. I don’t think the RFID tags do everything–at least not yet.
The jewelry-cosmetics counter areas in department stores are among the most inefficient spaces in retail in terms of delivery of good customer service. It seems that they are always either over or understaffed and in the latter scenario it can be frustrating for customers waiting for service at the “busy” counter while scores of other personnel, who are not cross-trained, stand idle at other counters. This is particularly true when the customer knows what they want and simply wants to make the purchase.
If there was a self-service option to bypass the wait, I believe it would facilitate better customer service and increase sales for the retailer.
Tag ’em all and let the marketers sort ’em out.
Wow, that’s a creepy idea from where I sit, but maybe I’ve read too many bleak science fiction novels.
The Shiseido concept is clever as a proof-of-concept. Linking the countertop devices to personal profiles seems to have nothing to do with RFID, however.
The more I follow the item-level RFID saga, the more it’s starting to look like its applications are likely to turn obsolete at just the moment they are technically perfected.
I’m generally pro-technology, but tools are just tools. It’s the business practice that matters. Give a 10-year-old a hammer and suddenly everything needs pounding. Give an industry RFID and suddenly everything needs tagging.
When we have to strain to invent customer services that justify the application of the tag to small consumer items, we just might have our values out of line.
What’s odd about the Mitsukoshi test with Shiseido is that RFID isn’t needed. The bar code would accomplish the same result, at a lower unit cost.
I’m not sure how RFID tagging is a substitute for human contact in a customer service-intensive department like Cosmetics. But in a broader sense RFID (or similar technology) can be a giant leap for merchants beyond bar code technology in terms of tracking inventory through the supply chain and in the store, customer checkout and other point-of-sale issues. Thinking bigger about RFID as a marketing opportunity, others have pointed out that RFID-seeded credit cards can even alert stores when their “preferred customers” walk into the building so they can be approached and assisted if they want. Maybe a touch of “Brave New World,” but with real sales-driving implications.
Best practice retailers of the future will find the optimal combination of personal service and appropriate technological applications. RFID tags are very likely to be one of those technologies.
I agree with a recent article in Customer Relationship Management Magazine that predicted “always on, always connected” will be the prevalent way to conduct business within 10 years. The author, Barton Goldenberg, forecast elements of this scenario: “In sales it will mean real-time inventories and collaborative selling where the buyer plays a more active role in the sales process. In service it will mean both the pervasive use of self-service that builds off extensive real-time knowledge bases, and vendors that instantly alert customers to anything important (e.g., RFID tags attached to products and navigations systems that alert companies and customers to product movements in real time).”
I also agree with Michael Stonebraker of MIT, who predicts that over the next decade, everything of material significance will get sensor-tagged. This will include you, your kids, your car, and your (or your company’s) valuable possessions–everything.
Call me old fashioned. Call me a throw-back. Call me resistant to innovation. While I very much see the importance of RFID, I still want good, personal customer service. The experience described in the discussion article makes me feel as if the only difference between going into one of these new department stores and shopping on the Internet is the fact that I can pick up the product. I want to interact with a live human being!