RFID: Sales + Marketing @ the Edge

Technology continues to transform marketing and sales. It is now requiring dynamic and rapid responses from marketers trying to get and stay ahead of the pack. As consumers adopt new technologies to block commercials, Internet pop up ads and others, new mediums and communications connections with consumers need to be discovered, mastered and used.

Today I’m using the term “Edge Marketing”. Edge Marketing uses Radio Frequency Identification (RFID) and related technologies to market to existing and new customers in a faster and more personalized way. Print, TV and Web advertising, traditional and digital signage, coupons, POP displays, floor graphics and more can all be transformed by the power of RFID to directly measure and demonstrate the true marketing and sales value of a campaign.

What is RFID?

RFID is a silicon chip embedded or labeled on a product or packaging with a battery and/or power generating antenna that communicates, and can be networked with computer systems and the Web. The RFID chip includes an Electronic Product Code (EPC) which will ultimately replace today’s Universal Product Code (UPC) to identify products. EPC is divided into numbers that identify the manufacturer and product type and uses an extra set of digits, a serial number, to identify unique items.

RFID technology provides all kinds of promise for inventory management, point of sale process improvement, logistics and cost reductions. But these are the below the line cost savings aspects of return on investment (ROI) for the application of this technology.

Leading companies are now beginning to investigate the use RFID and Edge Marketing methods to generate sales and marketing improvements that can drive their firm’s process costs down. At the same time RFID and Edge Marketing help drive the top line by delivering sales increases. RFID allows marketers to instantaneously deliver product knowledge, go-with product suggestions (for example toothpaste with a toothbrush) and sales generating messages through direct product recognition on the sales floor.

Smart displays and smart shelving

The effectiveness of point of purchase (POP) displays is a difficult marketing method to measure. In the past, the only way to evaluate them was to look at overall sales for the item during the POP campaign. Now, with RFID chips on items either in POP displays, or on the display shelves themselves, provides the ability to measure how effective these store fixtures are.

Companies who invest in POP displays can also use RFID to confirm that the actual implementation in the field is happening as planned and on time using supply chain tracking methods that monitor product movement from source, through preparation and onto the stores and sales floors in a timely fashion based on campaign start dates. With RFID measurement in place, the execution of these costly programs are effectively measured, verified and even optimized based on testing pick-ups and put-backs for different POP display locations at the sales floor level.

Digital signage can now be directly triggered by actual products in the store environment. So what was once a continuous loop of repetitive messages that put customers to sleep can be transformed into a dynamic form of message delivery relevant to the actual product movement in the retail environment. For example: imagine a consumer taking an item off a shelf that they are interested in buying that has an RFID chip embedded in the label. The RFID chip communicates to a digital sign in the consumers’ line of sight that this item is being handled. The digital sign then plays an advertisement about the product in the consumers hand or a complementary go-with product. The targeted spot is a direct encouragement to the consumer to make the purchase.

Even in-store floor graphics and audio announcements can be tested for effectiveness to increase sales. Devices such as cellphones, PDAs, BlackBerries and iPods can also be communicated with directly to generate sales. Recognizing the presence of users of these devices who have given their permission to be contacted can allow for very relevant and welcomed information on potential savings opportunities or services available in close proximity to the consumer’s current location.

In the case of cars, even where users don’t have the above mobile devices, advancements such as Dedicated Short Range Communications (DSRC networks) connects vehicles to roadside networks through built-in equipment that communicates with a system of towers deployed along side major roadways. DSRC networks will allow significant sales and marketing opportunities with consumers on the road based on their location.

All of the above and more will require incredible vigilance by marketing and sales professionals to ensure privacy laws and basic consumer sensitivities are not breached. Marketers must take care to ensure those that they communicate with have opted-in—otherwise they may face the wrath of consumers who feel their privacy has been invaded.

What about the Web?

The Internet is the information source of choice for most consumers whether on a PC or a Web enabled mobile device. The Internet will ultimately house EPC product information for all consumer products. But, more importantly the RFID chips on items can allow marketers, retailers and even consumers to connect their physical items and products to the Web to tap into this information for a variety of purposes. These include getting additional details on a product which go way beyond what any label could ever provide, ongoing replenishment items that are consumed regularly, even service and warranty monitoring of devices which require preventative or breakdown maintenance can be automated. Also, any recalls necessary or upgrade opportunities can be communicated in a rapid and direct fashion

The time is now for sales and marketing to get involved in their company’s and their customer’s investigations and rollout of RFID technology to ensure marketing aspects are integrated into the overall plan and technology deployment. Even more importantly, by raising the marketing opportunities into the discussion of RFID you may actually help to facilitate your company’s investment in the technology. In fact, initially many national brand companies have only taken a negative or compliance approach to the technology based on looking just at the physical process aspects and costs because such positive marketing benefits have not yet been included in the equation.

Marketers who raise these upside opportunities into the discussion may truly facilitate their firm’s assumption of a leadership position in the integration and deployment of this revolutionary technology with significant firm benefit.

RFID is about to create a revolution in retailing. Savvy retailers and brand marketers will leverage the technology to save on expenses and drive sales by finally connecting their product, their message and the customer right at the edge.

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