Nfc and location services – the next gen marketing alliance


The world of mobile landscape continues to evolve, urging marketers to incorporate this new technology in their marketing campaigns and customer engagement strategies. In fact, marketers are using this technology not just for running campaigns, but also as sources of valuable customer insight that helps build loyalty. What’s clear is that only those brands that adopt new technologies will be able to succeed in a competitive world.

The newest technology on the block to have made it big is Near Field Communications (NFC), a short-range high frequency wireless communication technology that allows exchange of data between devices within an approximate 3.9 inches distance. NFC allows target customers to view customized rich media and share experiences, and lets marketers send targeted special offers and promotions. NFC even allows customers to make purchases via their smartphone’s. While NFC technology has been around since the last few years, it’s only in 2010 when its potential was realized and device manufacturers, service providers and organizations began working towards NFC adoption. The more prevalent applications of NFC include mobile payment, access control ticketing, data sharing and push advertizing, and technology providers promise immense growth in the next few years.

Now let’s not confuse NFC with QR codes. QR codes required downloading an app and uploading a bar code to access content that goes beyond the web page. NFC allows smartphone users to access rich content and interact with a brand real time. All a user has to do is tap the smartphone on any RFID-embedded poster, magazine ad, retail point of sale or any other promotional item, to gain instant access to a world of rich media and content.

Holy Grail of Marketers?
Today, there’s a lot of buzz across the world about NFC technology revolutionizing the retail industry. This wireless technology can be used by retail customers to make payments, verify identities and experience products. For example in Tokyo, Japan two Gap stores started a “Like with a high-five” Summer T Coordinates campaign which combines NFC technology with social media. A customer connects the app to her Facebook account and gets a bracelet in-store to act as an identifier. If the customer likes an outfit being worn by a staff member, she will show approval by touching the NFC bracelet to her smartphone. This will send the outfit to her Facebook feed. Revlon set up an NFC-enabled product gallery in Tokyo that allowed customers to use an NFC bracelet to “Like” individual products in the store.

In Japan and North America, NFC technology is being utilized for identification, ticketing, time and attendance, loyalty and membership programs, secure access or transit usage and payment processing. For marketers, NFC opens new means to connect and engage with customers while capturing visitor behavior and preferences real-time. What’s exciting is that this technology also integrates marketing promotions with the point of sale, thus allowing interested visitors to make a purchase instantly.

Next Step: Technology Readiness
In 2011, only 5% of the total mobile phones were NFC-enabled; it is estimated that this number will rise to approximately 46% by 2016. The obvious indication is of rapid NFC adoption and analysts are sure that the market will see the growth in verticals such as retail, ticketing, and smart advertisement application. Google has already launched Google Android with NFC capabilities, and almost all major mobile manufacturers such as Samsung and Apple will soon follow suit. Google Wallet is perhaps the most significant step towards NFC adoption, by enabling easy mobile payment processing.
The NFC market is well distributed amongst North America, Europe, and APAC, with North America and Europe being the major contributors in the NFC chips market, though APAC is fast catching up. The high growth of the market in APAC is attributed to the countries such as Japan, China, and South Korea, who are adopting NFC at a faster pace. Analysts expect that the market for NFC applications will soon grow and an increasing number of industry players will increase their involvement.

What Can NFC Do Today
Beyond the payment infrastructure and casual information transfer, NFC has limited practical uses even for marketing, unless implemented innovatively. The challenge is that NFC technology is just hitting mainstream and people are still figuring out what to do with it. So if you want to do anything more with NFC beyond simple transfer of information, you might have to develop your own mobile applications per your requirements. Of course, NFC-enables mobile payment is something everyone is watching out for. With the right security measures in place, customers can purchase items of choice, buy tickets or even register for events by simply waving their smartphone at a special pad or sticker. Companies like Square are starting services which collate users’ financial data and allow them to make transactions just by swiping their smartphones. Google and VeriFone are working together to test NFC mobile payment real-time in New York and San Francisco. NFC technology has also replaced QR codes in Google’s marketing kits for small businesses.

A company called Tagstand has recently begun offering starter deals on customized NFC tags. Marketers can place these specialized codes anywhere and have smartphone users access websites, mobile apps, location tracking service, social media sites and much more. If marketers want their corporate blog to gain traction, posting these stickers on certain locations and landmarks can generate traffic from a variety of sources. When scanned, these tags will take your target audience to a special website that lists product review, cost benefits, comparisons, testimonials etc. Companies can even put the links to their Foursquare venue, Twitter or Facebook page behind an NFC tag and make it easier for customers to connect with the brand and with each other.



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