NFC: The Power Behind a Tap of Your Mobile Device
Episode #009: Tim Daly, NFC Evangelism at NXP Semiconductors
January 7, 2019
Raise your hand if you’ve ever heard of Near-field Communication (NFC)? My guess is that most of you probably aren’t very familiar with NFC even though it’s fundamentally changing how consumers engage with brands on mobile. In fact, more than 50 percent of the global mobile device population is NFC enabled and it’s almost impossible to buy a new mobile device that doesn’t have NFC. In our ninth episode of Mobile Matters, we talk with Tim Daly at NXP about how NFC is ubiquitous and most consumers don’t even realize it, ways NFC can help stop product counterfeiting, and why context and personalization is critical in mobile experiences activated via NFC.
Stephanie's Strong Opinions
- Near-field Communication (NFC) is much more prevalent than you might think considering many of us are already using it for Apple Pay, access cards for work, and more. We just don’t realize the technology powering all of these experiences is NFC.
- Product counterfeiting has become a major problem for numerous brands with one brand seeing more than 50 percent of its global product returns being counterfeit products. NFC provides an unique way for brands to leverage technology to easily distinguish between authentic and counterfeit products.
- Context and personalization is crucial in NFC-enabled mobile experiences. Actually, consider it a requirement.
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Stephanie Cox (VP of Marketing at Lumavate): I’m Stephanie Cox and this is Mobile Matters. Today, I’m joined by Tim Daly at NXP. Tim pioneered the first ever ID management and proximity management SaaS platform designed to manage near field communication, Beacon and QR mobile interactions for global brands and media vendors. In this episode Tim and I talk a lot about what NFC actually is, how it’s different than other technologies, why it’s fundamentally changing how consumers engage with brands on mobile devices and how to get started with NFC the very first time. And make sure you stick around till the end where I’ll give my recap and top takeaways so that you can not only think about mobile differently, but implement it effectively.
Welcome to the show Tim. So, tell me a little bit about how you got started in your career.
Tim Daly (NFC Evangelist at NXP Semiconductors): So that’s an interesting question. So, I’ve always been fascinated with technology, and how do we use technology to improve things to enhance our lives, etc. And I was brought in as a turnaround CEO for an out-of-home media company. And now, to be honest with you, I knew coming out of Wall Street prior to that I knew nothing about media. I couldn’t even spell the word, it was horrible. And yet, I saw this opportunity to take, we had thousands and thousands of these beautiful 6 foot by 4 foot displays all around the country, primarily in front of supermarkets, drugstores, etc. And I saw an opportunity to create a connection between the physical advertising signs we had, and what was becoming clear to me, which is the most important device out there, which is our smartphone. So this is back in 2009, 2010. And so the whole smartphone thing was new. So my goal was to try to create a connection between the digital and the physical, and I explored all different types of technologies that were out there. So, bluetooth was known, Wi-Fi was known, but they all were very clunky and they required lots of steps for the users to take, and if you’re walking down the street and see a sign and you want to to engage with that sign, well you’re not going to stop and take two minutes to type in a Wi-Fi password, etc. It’s just too clunky and added too much friction. I started to read a lot about RFID technologies, specifically a new standard called near field communications (NFC). And the NFC, at that time, had just become the global standard for secure short range connection, digital connections, between a reader and a passive small low cost sensor, a tag. And, in this particular case, the reader that I saw that was a relevant one was our smartphone because Nokia at the time was talking about putting NFC readers in their phones. So to make a very long story short is, I saw an opportunity to connect the physical world to the digital worlds through your smartphones using a new technology called near field communications. That’s how I got started.
Stephanie Cox: Well, it’s so interesting that you mention that. So, I remember in the late 2000’s, early 2010-11, talking about NFC. I have some background in home automation and how will NFC in your phone be the future of how you engage with consumers on devices, is that how you will unlock your doors? This idea of like taking my phone and tapping to something will really change how I behave.
Tim Daly: And that’s a good point, it’s all about behaviors. And it’s interesting. So, when I had this idea that’s when I went out and built ThinAir, which was the first ID manager platform where we would manage unique and NFC IDs in the cloud and render content, in context, with a rules engine. So context being time, place, date, weather, language, etc. So you’d have real marketing content in the context that mattered. So the problem though is that, back then, there was like one phone that had NFC inside. So you didn’t really have much reach, in terms of you really couldn’t reach anybody in North America and have this communication. So you could talk about how wonderful NFC is but nobody has devices. Who cares? So now fast forward, so call that 2011, fast forward to now where we’re brushing up against 2019, and you’re looking at 50% of the global device population is going to be NFC enabled. I mean, effectively you cannot go to your phone provider today and buy a phone that does not have the world standard NFC reader inside. So, you’re really talking about ubiquity. And that’s happened in less than eight years. So that’s incredible. So to the opportunity now for somebody to engage with the world around them through their mobile device using NFC is almost ubiquitous.
Stephanie Cox: So I know we’ve been talking about near field communication. Can you explain a little bit to the audience on how it differs from things like RFID, Bluetooth, and even Wi-Fi?
Tim Daly: Okay. So yeah, I mean you’re talking about radio frequency communications and think of them all essentially as cousins. And I think the the easiest comparison to make is UHF, so ultra high frequency RFID, and think about that in the context of small passive tags that are used in supply chain, in retail, in garments so they don’t get taken or stolen so for shrinkage, etc. And that’s a very similar technology, where each individual digital tag has a unique code called an EPC code. So each one is unique. You put them on or in something, and then you have a reader that would send out signals looking for those tags. Those tags would then reflect that reader energy back to the reader antenna. And it would say hey, tag 12345678910 is right here. And so, you know that something is in fact present. So UHF RFID is a longer range technology standard, and could be up to about 30 meters. It is, it does not have as high of data transmission rates. So it’s more of just, it’s more of identifying a specific license plate and where it is. NFC, which is its very close cousin, is a much shorter range technology. So it’s truly approximately 5 to 10 centimetres distance read range, depending upon the size of the antenna and the type of reader. And it’s become the global standard for secure communications between a device I.E. smartphone and a small passive tag. Plus, it’s also the global communications standard for EMV, your card, MasterCard, Visa, contactless payments. So think Apple Pay, Google Pay, Samsung Pay that all operate on the near field communication standard. So, NFC is short range, highly secure. It is a highly intentional technology, you’re not going to be walking around a mall and your phone is going to be buzzing and beeping because you’re walking by NFC tags. You literally have to take your phone out, touch it to that thing to have a connection made. So those are, I think those are the two big differences.
Stephanie Cox: Well, and it’s interesting that you bring up Apple Pay because I don’t think consumers realize that they’re already using NFC in most of their daily lives to begin with, with just some of the payment technologies that we have out there.
Tim Daly: You’re right, Stephanie. And it goes beyond that. So I’ll walk into a presentation and I’ll have 40-50 people sitting there. And I’ll say how many people know of near field communications and a lot of people raise their hand. And I’ll say, well how many people use this? And maybe 5 will raise their hands and then I’ll take out a credit card with a chip in it, I’ll take out my building access key and then I’ll show them Apple Pay or Samsung Pay and they all raise their hands now because everybody came to work that day and used the access card to get in which is NFC most often times. They went to the drugstore and they used Apple Pay to pay, or Samsung Pay, or Google Pay, or Android Pay rather. And it is pervasive throughout our lives. So going back to what you said earlier about behaviors of tapping, it’s becoming commonplace. I mean, we are learning that we can use this device, the smartphone, which knows who we are, knows where we are, and what we care about. And we can engage with the physical world to get something back of value. So, regardless of what the technology is or what you call it, you can just call it magic because it gives us magic. It just so happens to be called near field communications.
Stephanie Cox: I like the magic idea. That’s how I think of it, too.
Tim Daly: It really is, it is so cool. I smile every time I do it. I’ve been doing this for a long time.
Stephanie Cox: So tell me a little bit about Apple. Last fall, they opened up NFC reading capabilities on iPhone devices. Previously, it was limited to just Apple Pay. And then again this year with the three newest phones you can now use NFC without a native mobile app being required, and just tap one of the new phones to NFC tag and have it do an action. So what impact do you think that’s going to have on the market?
Tim Daly: So to answer your question in a couple words, huge impact. So yes, I mean Apple was slow to embrace NFC, it was clearly an Android, Windows, and BlackBerry thing early on. And Apple waited, waited, waited, and then I think it was a 7S and above, they started to include a NFC reader in there. But you’re right, they limited it down to Apple Pay. And then, they opened it up finally to reading a tag, but that required a downloading of a native app. So, they kept unfortunately, so they kept a lot of friction in the behavior of taking a phone touching and tagging and getting something of value. Until finally this year they opened it up and all the new devices, and NFC, NFC tag read that is, is a native function of the phone. So, they’ve opened it up. A lot of the big brands that we’re really getting excited about NFC but had waited until Apple to get onboard, they’re now really, really engaged in moving forward with pilots, tests, implementations, etc. So, it’s really opening things up now that Apple has made NFC tag read native.
Stephanie Cox: So, you mentioned brands that are using NFC today and they’re getting more excited with the Apple announcements. Can you talk to me a little bit about what brands are doing today with NFC?
Tim Daly: So, I’ve always been a big advocate of retail. I think that there is a natural play here and particularly what I call necessity media retail which is a supermarket and drug. People still have to eat and despite the fact that you can order almost anything online to have it delivered to you, a huge, a very large significant percentage of the population likes to go and squeeze the melons, check the raspberries, make sure that tomatoes aren’t rotten. So, people like to do that. And they do it on average, one to three times a week depending upon their demo. So, I think that there is a natural fit for an intersection between retailers, brand, and consumers, particularly in the necessity retail space, which as I said is supermarket, grocery and drug. So, we also know that is one of the areas where the highest amount of advertising/shopper marketing dollars are spent to influence people’s decision itself. We also know that consumers over index in the use of smartphones in that space. I think 86% of people use their smartphone when they’re shopping. So it’s a perfect intersection between retailer, brand, and consumer. So on top of that, you have this, you’ve had this, I don’t want to call it battle, but let’s call it a battle because we can, between retailers and brands. So the retailers say no, this is my customer, and then the brand says, no, it’s my customer they wouldn’t come to your stores if it wasn’t for my brand. So, whose brand really is it? And they fight back and forth. Retailers are very happy to take the merchandising dollars that brands give them and just throw it right to their bottom line, that half the time they don’t even merchandise properly. So you can use NFC in that space and you can create direct connections between the shoppers and the brands, who offer value added content. So is value added content, nutritional content, is it recipes, is it coupons? Is it some combination of all the above? But NFC is perfectly suited for that space and for that to happen. And then the one other thing that it solves, which currently is what every brand tells me is a big problem, is brands don’t know who their customers are. And that partially goes back to that battle I’ve mentioned earlier, where retailers say it’s our customer. So the brands don’t always have the customer data. So when brands create this intersection between their package, their product, and the consumer at the shelf, they now have a direct digital connection through NFC with that consumer. So think smart, intelligent packaging with NFC on it, a very strong call to action at the shelf, whether it be shelf level media, on the package etc. Touch your phone, get something of value, buy the product and then you have this evergreen channel now that exists between brand and consumer. And it could be repurchasing the item through e-commerce initiatives through that specific retailer if you’d like. It could be anything, so NFC has really created this really cool intersection at the center of commerce.
Stephanie Cox: So is that possible for me to think about using NFC for things like product authentication?
Tim Daly: That’s a great question. So, we have a real problem with items being counterfeit. So everything from wine to high-end fashion items are being counterfeited like crazy. Matter of fact, I’m not going to mention the brand but a very, very well-known outdoor clothing manufacturer, think skiing, snowboarding, they said that 50% of their global product returns were counterfeit products. So, that’s a big number. That’s a really big number. So NFC, if you go back to what I originally said about NFC and RFID, each NFC tag has a unique ID that cannot be duplicated or copied. So, at the most basic level, NFC embedded in a product, where it can’t be easily removed is a great way to authenticate that that product is exactly what it says it is. Then on top of that, you have in the last year, at NXP we’ve developed what is called a tamper tag. Which effectively is an NFC tag with a tamper loop in it and once and think about this physically being across an opening of like a pharmaceutical bottle or some sort of product closure. When that product is in the closed, non-tampered state, you engage that package and it will give you some sort of hey, this is me, I’m safe, I’ve never been opened state. And then when you open it and physically break that seal, the tag then reports I’ve been opened, and take this to a product associate, something is wrong here. So it’s a really interesting way to create an immutable digital product verification that has never been opened.
Stephanie Cox: So, one of the things you mentioned is high end fashion, and Nike is not necessarily super high end fashion, but I’ve seen a lot of that what they’re doing with connected jerseys and NFC. So, do you think that it’s possible for brands to tie in the idea of product authentication? Yes, this is an actual jersey for, I’m going to say, Andrew Luck, because I’m a Colts fan, but then also tie that to an interactive experience that provides content for me as well.
Tim Daly: Yeah and that’s really the workflow. So as I said before, the NFC just inherently based on the way that technology is and it works, it’s a great technology at the most basic level of product authentication. So, the workflow would go like this: so you have a jersey with a tag sewn into the label at the retail shelves there is a strong call to action, touch your phone to it. Either in the foreground or in the background, there’s a product authentication check being made, so you can either show the consumer that or not. And then, it goes right into some marketing message. Why do you want, why am I the best jersey in the world, why should you buy me. So you’re selling, the jersey is selling itself at retail. And then, you take the jersey home once you’ve decided to buy it and you take ownership of it. So now you associate your credentials with that specific unique jersey and tag. And you’ve got this cool direct connection with Nike or whatever brand it is and they can have a conversation with you that never existed before. So yeah, I mean that’s part of the workflows, it’s product authentication and then marketing communications that are of value back and forth.
Stephanie Cox: And it all happens so quickly, which I think is something that most people don’t realize. It’s that when I tap my phone to that NFC tag, that experience and like authentication message I’m getting are happening almost like what feels like you know within a couple of seconds, right?
Tim Daly: Oh, absolutely milliseconds. That’s absolutely correct. So the connection between the tag and the phone happens in the near field and does not require any type of Wi-Fi or over the air cellular connection. However, if you are then going to take that tag and have it bootstrap the phone’s browser and go into the cloud to go to a website, then you would require some connection, but the physical connection between tag and phone does not require anything other than proximity. And it happens really fast.
Stephanie Cox: This is why I think it’s going to change consumer behavior and how marketers engage with consumers on mobile so much. So, when you think about the future of NFC and what the opportunities brands have, what do you want to see them take advantage of?
Tim Daly:. What I’m worried about is that brands are going to view NFC solely as a marketing channel for their benefit. And if that’s the case, then rest assured NFC will not go the way it should go. However, if you offer true value so value is unique to each person. If you could offer unique value to each person for taking the very act of taking their phone out and touching it to your products and engaging. Then you’ve got something interesting and value is relative to each person, it’s relative to where you are at that moment in time and what you’re doing. So if I’m in a supermarket and I’m hell bent on buying 10 boxes of Kraft macaroni and cheese and you’re going to offer me two for one right then and there because I’ve touched my phone to your package, and I’ve engaged with you. Well, that’s of value to me at that moment in time. If I’m buying a Nike jersey and I’m going to a game and I touch my phone and I get a VIP ticket upgrade, that’s really cool, that’s of value. But it can’t be, it can’t be generic push messaging that’s so prevalent in marketing and advertising. It’s got to be customized, contextual, personalized messaging. Because I said earlier, it’s through the mobile device, the mobile device knows who I am, it knows where I am, it knows what I like, it knows what I don’t like. And plus, I can make payments with it. You can harness all of that with NFC, so make sure your messaging is contextual and harnesses those functions. Make it cool. Make it personal. Make it value-added for me. So. Yes.
Stephanie Cox: I think what you’ve just said is a thing a lot of people miss about new tech when it comes out, is you can do a lot of cool things with that, but if it’s not personal and relevant to me, I’m never going to fall in love with it.
Tim Daly: Right. I mean, I can’t tell you. I have done so many NFC deployments and pilots over the last 5, 6, 7, 8, 9 10 years, whatever it’s been. And I’m thinking of one specifically that was aimed at launching in a supermarket. So, you imagine you have your cart, you have your 2.3 kids you’re pushing them down the aisle, they’re grabbing stuff off the shelves, and it’s just it’s just carnage and chaos.
Stephanie Cox: That’s like every weekend for me, Tim.
Tim Daly: OK, so you understand what I’m talking about. And there you see a product and it has a real clear call to action. Hey, touch your phone here to you know whatever. And you touch your phone to this product, and then it launches a 2 to 3 minute product video with no payoff, no coupon, no nothing. What the heck, why who cares? Don’t waste my time. And that’s the kind of thing that worries me is when companies do that type of thing, they create a disincentive for the behavior of taking my phone and touching it to that thing to get value. And I’ve seen, that’s an actual live example of a national campaign that I was part of and I warned this brand every way to Sunday not to do it but yet they still did.
Stephanie Cox: I think that’s such a great point, because as a marker, we all fall victim to this a little bit, right? We have these great ideas like oh, I want to create this awesome product video, it’s 2 to 3 minutes long, and we never sit back and say does a mom in the grocery store want to watch a one, a 2 to 3 minute video in general, let alone on the weekend with her children.
Tim Daly: I always used to say, and I guess I still do, every campaign should be able to save me time, save me money, but make me smile. It’s easy to do that stuff. Make it cool. Make it fun.
Stephanie Cox: So you talked about one use case that you wish could have been better. Is there one example of a brand that you think is using NFC and just kind of really doing well?
Tim Daly: Yeah, I mean there’s a bunch of them, but I have to say that I’ve been a big fan of Adidas and their efforts in NFC for a long time. Now, I mean I do definitely take a little pride of ownership because I’m the one that got them into NFC originally, back in 2011. So that is a little bit proprietary self congratulatory. So, I’m sorry for that. But they were the first ones that put NFC inside a product. They launched this Boost running shoe back in 2013, 2012. And it was the first time that NFC was in a product that was available at retail. And what was really cool was is you go into the store, you’d see this really expensive, at the time, shoe on the shelf. And the shelf had, the product, the shoe had a very clear call to action that was like a cardboard fluorescent cutout that was on the tongue of the shoe, or rather, the toe of the shoe. And it said, “To learn more about me, touch your phone here.” So you take your NFC phone, you touch it to the NFC tag that was in the shoe, and that would then tell you the story of the shoe. And the story was a little short, little tiny product video about why the rubbers and the compounds, the way it was assembled made it the most revolutionary running shoe in the world. It then also had a mash up of Facebook and Instagram posts from around the world, that were just incredibly over the top like raving about this shoe. If you’re a runner, you’ve got to own this shoe. So basically, the shoe told you its story and sold you that itself when it was at retail. So then you decided to take it, you took it over to a clerk, they touched a device that they had to the same tag. It then connected with their inventory system and the shoe was removed from inventory, so it was marked as sold. So that’s the second phase of that tag. And then you take that same shoe home, you take your phone, once again, touch it back to that tag, and then what you do is you would associate, you register that shoe in your name. And then Adidas would offer you the ability to connect all of your Adidas running apps to your personal information, and that particular shoe ID. So Adidas would know and you would know how many miles you ran in the shoe, and they could offer all kinds of really cool, curated personalized content, and experiences to you, based upon your ownership of that shoe. How many miles you ran, what was your typical running place in the country, so on and so forth. So, to me, that was really really cool and that was their first launch, and they’ve since expanded that to lots of other shoes, lots of other products. And they just continue to do it really well and they’re getting better and better at it every day. And they’ve also incorporated product authentication into it, as well. So it’s just really cool.
Stephanie Cox: That’s a really great story of how you can take NFC in a way and test it one specific use case, make people smile, to your point earlier, and then really expand it into everything else you’re doing.
Tim Daly: Yes, I don’t remember the exact numbers but I did a program for a major appliance manufacturer a number of years ago. And they said, and ultimately the goal of the NFC tag on this particular appliance was for it to stand out and sell itself when it was at Lowe’s. And so, that was goal number one. Goal number two was once somebody bought it was to encourage that person to register this thing. I mean we’re talking like a $4000 refrigerator, so it wasn’t a cheap refrigerator. And what was shocking to me was how few people actually registered these products. So for this particular manufacturer, each incremental 1% of registrations was worth millions of dollars to them. And so, imagine if you can go from let’s say a 12% registration to 20% registrations. Well that small investment you made in NFC paid a huge ROI. So product registration is really critical and extraordinarily valuable to a lot of these brands. And NFC is just a frictionless way to do that.
Stephanie Cox: Well I think your point earlier around how many times you’re selling into a big box store, right, as a brand. You’re selling into the Lowe’s, Targets, Home Depots, etc. of the world. You don’t know who your customer is, the store does. Making product registration frictionless is an easy way to find out who’s buying your products because let’s be honest we’re not filling out those little cards they place in the product box anymore. So, if I’m unfamiliar with NFC and I’m thinking about how to get started. Can you explain a little bit about how it works from a tag perspective and how I really got to get a market with an idea like this?
Tim Daly: So, again, that’s another good question Stephanie, and I think that’s one of the challenges of the NFC ecosystem has faced, is who do I talk to? How do I go about putting this all together? What is going to cost me? And what’s kind of strange is, so I’m the NFC evangelist for an NXP Semiconductors, we’re one of the inventors of NFC as I said earlier, but yet, I’m not here selling NFC tags or readers or anything to anybody. The way that we work and so, we make about 94% of the global supply of these things, by the way, so our clients are the big tag manufacturers, etc. But the way that I work and what I do is, I guess I act as either like the quarterback of a football team or the head coach, and typically an integrated campaign involves somebody is going to make the inlays, the tags, some sort of ID management platform for the back end, and then of course the client. So what we will typically do is, we’ll have a discussion with an FMCG or a CPG company and they’ll say hey, Tim well we want to launch NFC on this particular product, across the following markets, here’s what we’re looking to do. And I’ll say perfect, great idea. Here are the top ID management platforms that do that, here is the best inlay provider, we will bring everybody to the table. We’ll manage the entire thing for you to make sure it goes well. You’ll interview the companies, you’ll pick who you want, and we’ll just stay at the table with you and will oversee it. We’re not charging anything for that, we’re just making sure that this is all done well, it’s done at the right price, and that the brand is really achieving its goals of reaching people.
Stephanie Cox: So, I know you mentioned price. One of the things that I remember in early 2010, when we were looking at NFC tags back in home automation was the cost of those. And they were cost like dollars apiece. Now that the price has come down so much. Can you talk a little bit about how affordable they are?
Tim Daly: Yeah. It’s amazing. And that’s another one of the misconceptions of the marketplace is that the price of NFC tags are so high. So, obviously it’s all driven by volumes. But today you can buy a, if all you’re looking to do is drive to an essentially a URL in the cloud, you can use what’s called Antec 210 micro, which is a smaller memory NFC tag, and at high volumes, you’re talking about 4 cents, fully completed, programmed, ready to go. So, that’s a completed product at roughly 4 cents each. If you go into really high volumes, you can get the price lower. So that’s a big difference. If you’re talking about on the other side of the spectrum, the most ultra secure high-end 128 AS encryption sun, I mean we’re talking about the most secure tag in the marketplace today, which is the 424 DNA tag, which we just launched. At very high volumes you’re talking about 20, 22 cents. Actually at even higher volumes you can probably get it down to 15 cents, but call it 20, 25 cents just be safe. And that’s the most ultimate secure tag available on the globe. So that’s a big difference.
Stephanie Cox: It is and that’s why I wanted to bring it up, is a lot of people shy away from NFC because they don’t really understand it. They don’t realize how many people are using it today and the world already. And then, also they’ve had this misconception of what pricing was 5, 8 years ago. And they don’t realize it’s so affordable now, to do things like what Adidas is doing and putting it in a ton of products that you have.
Tim Daly: Well, you’re right and what is the greater risk for brand? Is it spending money on digitizing your products in an effective way or is it you don’t do that and you’re disintermediated from the end customer. You never know who’s buying your product. You have no connection to them. And and you’re done. And your competition is eating you alive. So the cost of not doing NFC, in my opinion, is far greater than the small cost of doing it.
Stephanie Cox: One of the reasons why I wanted to have Tim on the podcast was because there’s a huge knowledge gap among most marketers regarding what NFC is and how it can be used today. Part of the stems from this misconception about NFC due to the hardware and cost limitations when the technology first came out. But as Tim mentioned during our conversation 50% of the global mobile device population is NFC enabled. Think about that, 50%, and it’s almost impossible to buy a new phone that doesn’t have NFC. Plus when you look at the cost of NFC tags, they have drastically dropped to just be a few cents per tag. So really makes it affordable for most use cases. Now, let’s get to my favorite part of the show where we take the education and apply it to your business. There are so many great insights from my conversation with Tim that can really help transform how you think about mobile marketing. Let’s dive into my top three takeaways.
First NFC is a lot more prevalent than most people actually think. In fact many consumers are using NFC and probably don’t even know it considering it’s an Apple pay Samsung pay Google pay and more. In fact, it’s estimated that 31% of all iPhone users made a purchase using Apple pay in the last year. And Tim Cook has stated that more than 1 billion Apple pay transactions occurred in Q3 2018 alone, which is triple the amount from a year ago. And once you start thinking about the thousands of people that are also using access cards enter their offices every day that happens to also use NFC technology, you can start to see how pervasive this technology has become in the last decade. So that begs the question, why aren’t more consumers, and in fact more marketers familiar with NFC? Well part of it is due to this lack of education and this long gap between when technology was first invented by Sony and NXP in 2002, and when it actually became ubiquitous. For instance 8 years ago, there were a small number of phones in the market with NFC readers that were actually in the phone, and they were mainly Android devices. In the US where the iPhone has been King since it first came out in 2007 and it’s lacked NFC support for many years until recently, it’s easy to see why NFC hasn’t taken off in a major way yet. It also makes sense why most consumers and most marketers aren’t super familiar with the technology. They may actually use it for payment, but they have no idea what technology is actually powering that payment. And that’s why we’re either going to need one, a major educational effort by someone to make this happen and get customers up to speed on NFC, or we’re going to need a few brands to create those exceptional mobile experiences using NFC that causes that technology to go viral and that’s how those consumers become educated. And it’s completely possible. Think about how Pokemon go educate everyone from small children to grandparents even about how to use augmented reality for the first time. And how this game spread almost completely via word-of-mouth or social media. We need this type of education to happen because we need consumers to become more familiar with the concept of tapping your mobile device to a physical item to activate a mobile experience. So this type of action of tapping becomes commonplace. NFC has the potential to truly transform how consumers engage with brands via mobile and allow brands to connect to their consumers in milliseconds on their mobile device. But in order for all of this to work, consumers have to know what NFC is and they have to know how it works so they can take that intentional effort of tapping their phone to an item. So we can all wait on Apple to do major education push on this technology, but if it was me I place my big bets on brands like Adidas, Nike or others that create an extremely compelling mobile experience that drives a ton of buzz media coverage and ends of educating consumers on how a mobile devices so much more powerful with NFC and a tap.
Next, product counterfeiting has become a major issue for countless big brands. Personally, I was completely floored by Tim’s comment that a major outdoor clothing manufacturer was seeing 50% of their global product returns being counterfeit products. Talk about having a significant impact on the bottom line. And NFC has that ability to solve part of this problem. Think about it for a second. We could embed an NFC tag in your product, your retail team could easily tap that product during the return process to see whether or not it’s an authentic product or counterfeit and address that situation immediately. This is what will have a drastic impact on the number of people who try to return counterfeit products once the word gets out that they are going to be authenticated during the return process. It also could impact people who want to ensure their purchasing a product that’s authentic, such as a sports Jersey. Take a look at what Nike is already doing with NFC. They put NFC tags in jerseys and activate players specific mobile experiences that are tied to the Jersey. So not only do you get to verify that your product is authentic, and you have it authentic Andrew Luck Jersey as an example, but you also get exclusive content that is only available to someone who has purchased the jersey. These are one example of countless ways that you could use this technology for product verification in numerous Industries.
Finally, let’s all promise not to screw up NFC and make consumers hate the technology by only using it for marketing purposes. Tim’s example of a brand that has used NFC mobile experiences that activate a 2-3 minute video in a supermarket is a perfect example of what we all should absolutely never do. I cannot stress this enough. I’ve mentioned this previously on episodes, a lot of times marketers we get so excited about new technology and we’re so fired up what we could do with it, we make bad decisions and we immediately start using the new technology only as a way to sell more stuff. Don’t get me wrong NFC is going to help us sell more stuff. You will increase your sales with that, but you have to make sure you’re taking that context into account providing true value. With NFC you have some type of context. Whether that’s a type of item, where it’s located etc. And this all means that consumers are going to expect you to provide them with a contextual content, contextual experience. For instance, if I’m tapping an NFC tag on a product in the supermarket, then you’re going to want to provide me a coupon, not a 2-3 minute product video. And if I’m giving a coupon and getting that from you, I’m probably going to be fine giving you some basic information, which means now you know who I am. But don’t think about it only tied to sales, think about ways to create engaging mobile experiences that provide exclusive mobile content. For instance, if I’m waiting in line with my kids at an amusement park ride, and we’re all on our phones, because that’s what people do, allow me to tap different signage as I move throughout the queue that allows me to unlock exclusive mobile games that are tied to the ride that entertain me while I wait. Or think about your fridge. This is one of my favorite examples. When I get a new fridge, being able to on that sign on the front, be able to activate and tap with NFC and fill out my product registration. And then later when that dreaded water filter light comes on, being able to take that phone take my phone and tap my water filter, be able to add that water filter straight to my cart, order it immediately, and never ever take my water filter out of the fridge to figure out which one it is or have to look for the dreaded instruction book. That’s what a frictionless mobile experience really is and that’s what the future of mobile it’s all about everyone.
So now for my mobile marketing challenge for the week. If you’re not well-versed in all things NFC then it’s time to up your NFC game, and no I’m not talking about football people. Once you feel confident with how NFC works, then it’s time to start brainstorming a pilot project that your company can implement using NFC. Now don’t try and boil the ocean. Your first project should not be putting NFC tags in all of your products right away. Start smaller with a true test. Such as using NFC tags in a product launch or driving interactive mobile experience that’s tied to a marketing campaign. Once you become more familiar with implementing and using NFC, and seeing the results from it, you’ll find countless possibilities for how you can use this technology to further your connection with your consumers.
I’m Stephanie Cox and you’ve been listening to mobile matters. If you haven’t yet be sure to subscribe, rate, and review this podcast. Until then be sure to visit Lumavate.com and subscribe to get more access to thought leaders, best practices, and all things mobile.