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NFC’s significant potential encompasses more than just payments: Forrester

March 1, 2012


NFC has potential for merchants beyond payments

While much of the focus on near field communications has been on mobile payment applications, merchants and marketers are expected to begin trialing NFC for a broader array of marketing purposes this year, according to a new report from Forrester Research.

Stores represent a huge opportunity for digital engagement with NFC by enabling shoppers to tap an item on a nearby shelf to find out more, with many supermarkets currently testing such applications, according to the Forrester report “Trial NFC To Connect The Real World With Mobile.” What could help spur even further interest in NFC this year is this summer’s Olympic Games, where there is expected to be significant use of NFC.

“The addition of tap, swipe and other new verbs is something that marketers will have to get into their campaign grammar and analytics along with display and click,” said Anthony Mullen, author of the report and a senior analyst at Forrester Research, Cambridge, MA. “Services for executing NFC campaigns is in place giving high engagement with a worldwide reach through partnerships.

“Marketers can begin to trial now with this friction-free tool that converges offline and online,” he said.

“The myriad of use cases for engagement are so compelling that awareness among marketers – especially during the Olympics in London – will increase in 2012.  Of course, if and when the iPhone 5 has NFC then that would light the touchpaper.”

Friction-free brand experiences
Also driving awareness and trials for NFC is the fact that the number of handsets featuring the technology is expected to grow from 35 million units last year to 80 million in 2012.

NFC enables consumers to use their mobile devices to interact with almost any real-world object such as posters, clothes and shop windows.

While the technology is still in the early stages of adoption, marketers are keeping a close eye on its development because of NFC’s ability to provide a friction-free instant brand experience.

There are several benefits to NFC, including the fact that marketing assets are stored on the tag as well as on a landing page URL so there is no need for an Internet connection to deliver a brand experience.

NFC is also very simple to use. Users tap their device on the object of interest and are immediately provided with some type of media or a campaign message.

NFC tags are also small and inexpensive so they can be placed on nearly any object.

Additionally, because tapping and swiping are actions that consumers initiate and therefore are opt-in, NFC can provide an important touchpoint for initiating a dialogue with consumers.

There are a variety of technologies available right now to marketers for driving digital interactions in a real-world environment, including SMS, Bluetooth and 2D bar codes. However, NFC beats them all when it comes to immediacy, simplicity and context, according to Forrester.

While NFC requires a simple tap or swipe, SMS requires users to send a text and await a response and 2D bar codes require users to take a picture of a code and uploading.

Moment of purchase
According to Forrester, the infrastructure for delivering global advertising into offline objects via NFC is gaining momentum.

For merchants interested in trialing NFC programs, Forrester recommends they closely observe how customers and prospects move between online and the real world.

Merchants should craft an NFC offer to complement the moment of purchase. It is okay to start with NFC-enabled “like” badges but consider moving away from one-off actions to a broader approach that takes into account how NFC can influence traffic and entice customers.

“2D codes and subsequent variants will find their heyday in the world of augmented reality where the visual parsing is always on,” Mr. Mullen said.

“At the moment the friction is still relatively high for using 2D codes – launch camera, focus, send for recognition, landing page –  but they are very low-cost, which makes them attractive for addressing objects in the real world in volume,” he said.

“An NFC tag can cost from 50c to a dollar making magazine pages inaccessible but kitting out your store or event with NFC tags is relatively inexpensive.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York

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