Why Retailers Should Think Like Brands
Creating revenue growth is not only about selling more products: it’s about engaging the customer throughout the product lifecycle. Check how NFC can provide the key.
According to a report prepared by Fung Global Retail & Technology, many retailers could enhance their success by thinking more like brands in their approach to private-label goods. By adopting brand-like levels of engagement and making product ownership more desirable, they can increase competitiveness and maximize profitability through increased consumer loyalty.
The report focuses on how retailers can “think like brands” by including NFC technology in their own products, such as private-label clothing ranges. This extends customer contact beyond the point of sale, since retailers can provide them with useful product information or branded content during the product’s entire lifetime.
Enhancing The Shopping Experience
One of the ways to engage customers featured in the report is the deployment of NFC as an in-store technology, which allows retailers to communicate directly with consumers visiting their shops. Using an NFC-enabled device such as a smartphone or a tablet, shoppers can tap any tagged item to obtain more information about the product.
The technology can create a very targeted shopping experience for consumers, and can also be used to introduce a wider product selection. Retailers cultivating their engagement with customers should see a positive impact on revenue growth.
The report also highlights how NFC tags can deliver new content whenever a customer taps a smartphone onto the NFC tag embedded in the product. This allows retailers not only to engage customers with a more personal, interactive shopping experience, but also to maintain a relationship with them throughout the entire lifecycle of a product.
Measurable Impact Beyond the Point of Sale
When shoppers access the social media links or access a transactional website featured in product-specific NFC tags, information about their browsing preferences can be used by the retailer or by brand managers to profile the shoppers, and to personalize any future marketing messages on demand.
Fung’s research underlines how information via NFC tags can encourage further store visits and create a sense of exclusivity by rewarding loyal customers. For example, retailers can provide notifications -- through NFC tags embedded in previously purchased items -- about exclusive collections only available in-store to “privileged” customers.
The report also notes that retailers can measure the impact of these messages through NFC. By using tools such as Google Analytics, they can accurately calculate the impact of marketing campaigns, by tagging the links used in NFC tags.
Branded Apparel Use Cases: Dyne and Spyder
Fung includes specific use cases in its overview of the sector, including casual-fashion firm Dyne and ski- and performance-wear brand Spyder.
Dyne and Spyder have closely collaborated with SMARTRAC to introduce clothing with embedded NFC technology that encourages consumers to engage with the brand during the entire product lifecycle.
Dyne: Engaging Customers Beyond Point of Sale
Dyne uses NFC technology to engage with customers from purchase through to product end-of-life. Dyne’s garments feature a special embedded NFC tag, developed by SMARTRAC, which provides enhanced environmental resistance. Users wearing the item can tap the NFC tag embedded in the fabric to access personalized content, such as product information, or links to lifestyle content such as music streaming via the SoundCloud music app.
Spyder: NFC Turns Outerwear into Experiences
Spyder, in collaboration with Li & Fung and SMARTRAC, has launched the US Ski Team outerwear collection, which uses embedded NFC tags. The technology allows consumers to access location-based information including weather and snow conditions, and to interact in real time on social media with US Ski Team members, and access Team news feeds.
Consumers Prefer NFC
The Fung report quotes a survey by Strategy Analytics showing that US consumers favor NFC technology in preference to QR codes or Beacons, and exhibit a clear interest in using NFC both in-store and later in the product lifecycle. The participants in the survey highlighted three main benefits of using NFC.
Speed: NFC allows users to get information by simply tapping, rather than by launching an app (Beacons) or waiting for a camera lens to focus (to scan a QR code).
Convenience: Consumers think that NFC is the most convenient real-world technology -- the technology can be used irrespective of any other functions their smartphones may be performing simultaneously.
Control: Those surveyed think that NFC gives them more control over the information they receive. With NFC, they can actively select which tags to tap, while with Beacons, they passively receive the information when they are in range.
The accompanying graphic summarizes the results of this survey (Source: Strategy Analytics/Fung Global Retail & Technology 2017 – Deep Dive: Building Customer Engagement Through NFC Technology).
NFC Can Boost Revenue Growth
Enhanced consumer engagement through NFC tags can make marketing and operations much more effective not only for brands and retailers, which should reflect positively on a company’s profitability.
Fung’s report quotes data on consumer engagement through Instagram and on UK sales for four leading UK-based luxury brands, to demonstrate a definite link between engagement and sales growth. Burberry, which showed the highest average consumer engagement rate per Instagram post, also saw the fastest year-on-year UK sales growth rate in 2016. In contrast, Mulberry had the lowest engagement rate of the four brands, and the slowest UK sales growth during the same year.
Fung’s analysis asserts that retailers can increase their revenues, profitability and competitiveness by using NFC products and solutions to engage with customers both at point of sale and post-sale, throughout the life of a product. By tailoring promotional campaigns to their existing customer base, retailers can use interactive marketing to increase in-store sales, encourage repeat sales and maximize customer retention and loyalty. The technology is cost-effective and easy to implement, so looks set to become ever more widely deployed throughout the retail sector.
Fung Global Retail & Technology provides future-focused analysis, thought leadership and partnership building to organizations navigating the intersection of retail, technology and fashion.