NFC Digs Fresh Ground

Near field communication (NFC) is a technology that allows a device like your mobile phone to be recognized by a specially programmed tag or machine, allowing instant transfer of information as well as transactions such as buying tickets or checking into hotel rooms. It essentially transforms customer service into software. It will send a lot of clerking and sales jobs to the boneyard.

You might find more human interaction among actual graves, where headstones may soon be NFC-enabled []. One day you’ll be able to stroll down memory lane (not necessarily your memories) listening to voices from the beyond tell their tales with a simple touch of your mobile. So those Tuesdays with Morrie don’t have to come to an end. You might want to avoid the cemetery on Memorial Day unless you enjoy a cacophony of old war stories.

The Future Is Near

What do movies, ballgames, and operas have in common? If you want to watch them in person you have to stand in line to purchase your tickets or print them out online. Then you have to queue up again at the event to hand over your paper slips. Soon there will be no reason to perpetuate this quaint routine. With near field communication (NFC) you tap your mobile phone against a designated point or tag to process your request: info, seat choice, or payment.

NFC, in other words, proposes to transform customer service into software. If the powers that be and wanna-be have their way we soon may be the flesh-and-bone equivalents of cars zooming through the toll booth with the FastPass on our dashboards.

Wireless communication between devices is nothing new, but unlike a Bluetooth connection, your mobile and the other device don’t have to be programmed to work together; they can simply touch to establish a connection. Just tap your mobile to a pay station employing something like MasterCard’s PayPass program or Visa’s payWave and off you go. If your phone isn’t NFC-enabled you can attach a radio-frequency identification (RFID) tag to its back to perform the same magic.

Corporations and governments will be able to track our movements and spending habits accordingly. Which may seem kind of creepy, but should add to efficiencies and better allocate resources. For instance, traffic congestion will ease and municipal coffers will fatten when people pay to drive within a defined area; the City of London has done this successfully for many years. Don’t want to pay? Go another route or take public transport. And instead of feeding a parking meter with coins, you’ll simply tap it with your phone. The information that the space is occupied would then be transmitted to a central server; that database could be accessed by services (apps) letting drivers know where empty spaces exist.

NFC is the leading technology for paying via mobile. Such payments will reach $264.8 billion by the year 2015, according to a recent report, and are especially popular in densely populated Asian Pacific nations, followed by Latin America, the Middle East, and Africa – in other words, the more “under-banked” areas of the world. There are some four billion mobile phone users worldwide, and 1.6 billion bank accounts. You do the math: Mobile payments have huge potential as the gap between the two numbers narrows, and the First World catches up the the Third.

NFC and electronic wallets won’t be ubiquitous of course until most merchants, airlines, buses, train operators, hotels, and entertainment venues adopt the technology. But that day is coming. The biggest mobile carriers and manufacturers support NFC and are pushing retailers to join them in a technology that has been around for years without getting traction – before the advent of mobile smartphones made it, well, smart. “Looks like the technology is getting moving,” says Gerald Madlmayr, an NFC expert in Vienna. “Finally.”

As for all those ticket takers, you’ll have to look for human interaction somewhere else. Zoom, zoom.

The Best Way to Shop, Bar None

It’s not just mobile devices that are increasingly “smart” – they’ve earned their sobriquet by greatly boosting their owners’ intelligence as well. Consider how they’ve broken the bar code, that series of thick and thin vertical lines attached to a product that contains price information and helps vendors track inventory. Now your clever little hand held friend can scan it and track down the best price, wherever it may be. You may only need you to type or speak the name (or even just description) of your object of desire. And shazaam: the best deals, online and in stores.

Retailers have grown afraid of these ruthless new competitors residing in the pockets of their erstwhile customers. But not nearly enough.

Almost half (45 percent) of shoppers with smartphones use them to do on-the-spot price checks, according to consulting firm IDC Retail Insights, putting huge pressure on retailers to compete on price – on everything, all the time.

The big box has become a big sponge, letting all sorts of precious, valuable information in and out. “The four walls of the store have become porous,” Greg Girard of IDC told The Wall Street Journal. “The retailer’s advantage has been eroded.” [WSJ, 12/16/10]

That leaves the salesman with less and less to do. Almost three quarters (73 percent) of shoppers with smartphones preferred to consult their mobiles rather than an appliance jockey on the floor, according to a 10-nation study in 2010 conducted by the big management consultancy Accenture.

The casualties are already mounting. Best Buy, the nation’s largest electronics chain, saw its stock plunge before Christmas 2010 (typically its most lucrative period) after it conceded it was losing market share, which analysts said was due at least in part to mobile-equipped bargain shoppers.

On the day retailers traditionally go “into the black” for the year (dubbed “Black Friday,” the day after Thanksgiving), 5.6 percent of shoppers used a mobile device to access retail sites in 2010 – a 56-fold increase in one year, according to Coremetrics, an IBM division that measures e-commerce activity. [WSJ, 12/16/10] Soon enough it will be the percentage of those not shopping with their mobiles that will be in the single digits.

There are ways for retailers to suck it up and make lemonade from the new reality. Beleaguered Best Buy, for instance, has partnered with TheFind (which was downloaded 400,000 in its debut month) to target consumers with ads while they’re in the store – or at a competitor’s like WalMart. “That is an opportunity to steal a sale right when someone is in the throes of making a decision,” Barry Judge, Best Buy’s chief marketing officer, told The Wall Street Journal. “That is what makes mobile so powerful.” And shameless.

Siva Kumar, chief executive of TheFind, is unapologetic of playing both sides of the transaction. “It is not a consumer-only game,” he told the Journal. “Retailers can use it to their advantage.”

Nobody said war was pretty, but competing strictly on price is a losing battle, especially with the high upkeep of physical stores. More promising survival tactics would include:

  • Selling merchandise that customers can’t get anywhere else
  • Bundling special services with products
  • Removing or encrypting bar codes to stymie deal-seeking mobile customers

No matter how retailers adjust to the mobile age, it seems clear there will be less need for so many or such large retail showrooms, especially those selling commoditized merchandise or stuff readily available on the web. You have to wonder what’s going to happen to the commercial real estate market when this realization really sinks in.

Mobile Just Smote the Remote

Forget about rooting around in the sofa cushions for your remote control. Just reach for your mobile. It’s soon all you’ll need to navigate your life – not just on Facebook or Mapquest but among the ever-expanding choices you’ll have on internet-fed TV.

A number of companies already make apps designed to task your mobile device as a remote control. Google’s TV app runs on Android or iOS (iPhone, iPad); Apple’s TV app only on Apple’s own iOS devices. Google’s has voice search; the Apple Remote app lets you control your Apple TV as you would your iPhone, iPad, or iPod Touch.

Not known as speedy technology adopters, pay TV distributors are also in the game of enabling mobile devices to serve as remote controls and program navigators. Comcast, Time Warner Cable, AT&T, Dish Network, Verizon and others have apps for iOS and Android devices.

Verizon’s FiOS Mobile Remote app lets customers change channels, manage parental controls, pause, rewind and fast forward or record a TV show.  Customers can also click on the video on demand (VOD) button or switch to live TV. And here’s an interesting bonus: customers can transfer apps from the mobile device to the TV.

Certainly viewers crave new ways to search and discover content, to escape the up-down-left-right “grid” that has displayed program line-ups for decades. Universal remotes have tried to solve the problem of choice but they’re too big or too complicated. If we’ve learned one thing about consumer electronics it’s this: it has to be easy to appeal to the masses.

The remote control even as it is still plays a crucial function. Its real estate is consequently highly valuable. Television will feature more apps as it becomes an appliance of the Internet, and those apps will compete for viewers’ attention. No wonder streaming movie provider Netflix has struck deals with TV manufacturers to feature a Netflix button on next-generation remote controls (yes, even before they become an app on your mobile). [] With Amazon, Apple, Hollywood, and the cable companies gearing up to keep Netflix from extending its lead in movie exhibition, you can’t blame the scrappy company from thinking ahead. Which is the lesson for all of us in the rapidly moving tech-dominated world: think and act strategically or get buried under someone’s backside.