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Article
RFID will require Opting-In in Order to Gain Real Value

The art of getting customers to opt in is the start of the "opting in chain", so to speak. And, at the heart of that art, is to ensure that the customer perceives and gets value as well as an improved or enhanced shopping experience.


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I certainly don’t claim to be a “queen of retail fashion” – you know the type, always in the know about the high end clothing brands and very much in command of their likes and dislikes.  They are also extremely knowledgeable of the latest runway styles and colors, as well as who the brightest new designers are.  But, I do know that I enjoy the thought of strolling into my favorite clothing retailer (golf clothes, of course!) after getting preferred (and free!) parking because of my loyalty and having them know not only that I am in the store but what size I wear, what my previous purchases have been and what new items I will find of interest.   Sign me up – I am ready to “opt in” to that program and let the good times roll!  The art of getting customers to opt in is the start of the “opting in chain”, so to speak.  And, at the heart of that art, is to ensure that the customer perceives and gets value as well as an improved or enhanced shopping experience.  So it seems that the idea of retailers putting in the appropriate RFID technology, supporting applications and business processes as well as those ever important links back into their global customer databases or CRM systems, to enhance their customer’s shopping experience should be a bit of a no-brainer. 

Actually, it is hardly a no-brainer because, although it may seem simple to do, I am certain that we have all, at one time or another, opted into a customer loyalty program that was “half baked”, thus having the opposite effect on our opinion and loyalty. You see, there are several hurdles that must overcome before the delightful shopping experience that I mentioned above can ever truly come to fruition.  I’ll discuss some of those hurdles in this article (not in any particular order) but I can assure you that these (and several others) will be discussed in greater detail in my upcoming report – along with some emerging best practice strategies to get over or around these hurdles.

The first hurdle is one of vanity and privacy – and it is NOT limited to a particular gender or age.   It is when the shopper feels that their size (primarily) and other personal information such as purchase history is not something that should be public knowledge.  Because of this concern many shoppers choose not to “opt in” to customer recognition and loyalty programs.   So, they are faced with the conundrum (one of my favorite words!) of allowing their sizes and other personal information to be known so that their size 14 fuchsia designer gown is going to be in stock when they walk in or not allowing it to be captured and attached to their customer profile thus forcing them to go store to store to store in hopes to find a gown that they can wear to that all important gala event.

The second hurdle is related to software applications – those that provide the important link to the CRM system and/or customer database as well as the CRM systems themselves.  You see, if you don’t have your “CRM house in order” and your corporate data/information strategy in order, this ever important linking task will become a huge COSTLY hurdle – bordering on a fiasco.  The result of this not being done successfully will manifest itself in such tell tale signs as your loyalty not being recognized across multiple store locations or across multiple sales channels (i.e. internet purchases versus store purchases).  The need for opting in to help solve this hurdle lies within your corporate IT department and with application providers.   The corporate IT group needs to opt in to get the data and CRM apps in order.  The application providers need to opt in to “build” applications that make the linking-in easier and more standardized – thus moving away from every implementation being a custom (read: more costly and risky) task.

The next two hurdles have to do with the hardware and technology.  The first one is the cost of the infrastructure to support such exciting shopping experience elements as a shopping buddy, smart dressing room, information kiosks throughout the store, hand held devices for the sales associates – just to name a few.   The second is the capability of the technology to be accurate in its performance, such as accurate read rates.  Both of these hurdles are being chipped away at but still have a long way to go.  And, as with any technology related project, a solid business case, cost justification, and ROI must be in place.  This will continue to be a difficult task as costs remain high.  As more technology providers choose to “opt in” – i.e. spend more R&D $s to lower cost and improve capabilities –the cost and performance curves will continue in the right directions.

The last hurdle that I will discuss here (remember – more in the upcoming report) is the one of cultural change that is required of the store employees and sales associates.  It will not be a successful venture to just install the technology, hand it over to the employees and expect the customer experience to magically transform into panacea!  The employees/sales associates must “opt in” to understand as well as to embrace the technology, and thus utilize it to create that magical customer experience that is so very important. 

Customer Issues

Technology Issues

Privacy

RFID today has Poor security in many applications

Need low hurdle to adoption (must be easy)

Major investments in RFID software and hardware are ahead of us

Incentives must be high -- what do I get, on an ongoing basis for Opting In

Change management of employees

Association of Brand (Membership in an exclusive experience)

Data standard and application ideas still in infancy

Multi-channel -- has to work with other sales and service channels

Weak partnership network

 

Growth vs. Cost Saving less accepted as an ROI principle.

So, whether you are a customer, a technology provider, a sales associate or some combination of the three – do your part to “opt in”!!




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