Digitizing Retail Loyalty Programs & Stores with RFID tags

Loyalty cards embedded with RFID tags have been around since at least 2004 and I am surprised that solutions built around this technology haven’t gained wider adoption. At the time it was being used for loyalty there were privacy concerns which I believe can be overcome with full upfront disclosure to a customer.

A quick search on Google brings up many Chinese manufacturers selling these RFID embedded cards, and I see a lot of people in my LinkedIn network with extensive RFID implementation experience. So why isn’t there any hype about using it for loyalty programs? I’m seeing Bluetooth beacon technology punted more. RFID technology predates beacon technology, but based on my readings I feel like RFID-based loyalty programs can be far more effective.

How can both technologies work for a consumer in a retail store?

With Bluetooth beacons the client needs to download a retail stores app, register for their loyalty program, enable their smartphone Bluetooth radio and activate the app before entering the store. At the store entrance and in various locations within the store are devices that transmit messages via Bluetooth to a smartphone. Using the stores WiFi network or cellular data the smartphone transmits responses back to the stores cloud / back-end system. Based on the customer’s loyalty status, preferences or shopping history the system can send special offers or additional information to the client based on the location they’re standing at using WiFi or cellular data.

With RFID there’s no need for downloading apps, using Bluetooth and being overwhelmed by messages as you move from the proximity of one transmitter to the other (which could be alleviated if the app is coded well enough to only show a customer what is relevant).

The RFID tag that is embedded within a loyalty card (which could be inside the customer’s purse or wallet) is read by a RFID reader that the customer is within proximity off, and the tag ID is passed to the retailer’s customer management software. The software identifies the customer based on a tieback between the tag ID (which is PCI DSS compliant meaning no identifiable customer information is visible) and customer loyalty number. Based on the customer’s previous activity, the store can send an SMS message to the client’s phone or display custom messaging on display screens within the store.

In both scenarios, the store associate can be alerted to the customer’s identity, provided with the customer’s history of previous interactions with the retailer, showcased the customer’s lifetime value and suggested next best actions (product suggestions or given permission to offer further discounts) using a good analytics solution. Whether a purchase is made or not, the customers movements in-store and across stores are tracked and this data can be analysed later for product placement and promotion optimisation.

With RFID, the retailer can scan up to 1000 products instantly at >99% accuracy which enables the retailer to know exactly what stock is available in-store, and where it is located. RDIF4U did a great cost analysis and as you can see from their summary, the cost of an RFID implementation is only marginally higher than other solutions.

RFID has been around for more than a decade so why hasn’t it gained further traction with price decreases due to greater economies of scale? I don’t get why it hasn’t been implemented on a wide scale in retail brick and mortar stores which are in real need of digitization (to create a seamless omni-channel experience, further empower customers and store associates, create unique and memorable experiences, etc). They need to innovate and stay ahead of the curve when other stores may succumb to what is being termed the retail apocalypse.

Besides beacons, there’s around a dozen other types of people tracking technologies but I don’t think any of them measure up to what RFID can offer, except for perhaps the concept we’ve seen from Amazon Go (just scan your code once upon entry and do what you please as computer vision sensors will track all your activity in-store).

Does anyone have further insight or know of any solution providers that offer platforms which allow you to integrate and host a RFID solution and a retailer’s CRM, Loyalty, Inventory, Analytics, Digital Signage and even Augmented Reality display solutions? A solution that offer multiple customers a unique personalized experience at the same time that is both seamless and secure?

Zaid Mahomedy is certified Enterprise Architect and Mixed Reality Entrepreneur with more than a decade of experience in IT consulting, Enterprise & Solution Architecture; Digital Content Creation and Influencing. Zaid is available to consult to businesses on the opportunities and solutions available for adopting disruptive technologies.


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1 Comment

  1. I don’t think that RFID is better than Beacons, be in terms of visibility or cost. Beacons are trending and used more as compared to RFID due to lack of visibility of packages moving within a warehouse and in-transit.

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