An interesting RFID experiment for cosmetics

StorefrontBacktalk has a very interesting article about an experiment in Japan involving retail chain Mitsukoshi, cosmetics company Shiseido and Fujitsu (the RFID vendor), where RFID tags are used to track when different cosmetics samples are tried, and to generate customized customer purchase histories, which would allow sales clerks to not only know which items a customer has purchased in the past, but also which they tried but opted not to buy. Also,

"the trial—involving retail chain Mitsukoshi, cosmetics company Shiseido and RFID vendor Fujitsu—also offers consumers a "virtual real-time makeup" session featuring a camera-equipped kiosk, display and RFID tag reader "that will enable customers to view on the display how particular products would look on their face by waving tagged cosmetic products such as lipsticks or eyeshadows over the tag reader," the companies said in a statement.

Virtual cosmetics kiosks like this have been met with varying degrees of success in the past, but to me the RFID tracking of usage and purchase is the killer app here. I now have to wonder how the sales clerks will use the trial and purchase history information to improve customer service and/or promote key products.

Tags: RFID, digital merchandising, marketing at retail, purchase history

Looking for RFID ROI

There's a nice thread on RetailWire about the ups and downs of RFID, which was once heralded as the greatest thing since the barcode, but is currently still looking for a place to truly shine. As Chantal Polsonetti, VP of Manufacturing Advisory Services for Arc Advisory Group notes, many manufacturers don't expect massive supply chain benefits by implementing RFID systems, and instead are looking for secondary benefits to drive ROI:

"Our manufacturing customer base is telling us they already have sophisticated supply chains, so the benefit from RFID in the distribution center is incremental at best," she told Modern Materials Handling. "Instead, they're looking at applications around asset tracking, work-in-process and how product moves through the retail store to get an ROI."

Back-office applications still seem like the best fit for RFID, though there are certainly numerous applications that could benefit from the extra awareness that an integrated RFID system brings, and NCR has suggested some ways that RFID could be used to improve the in-store experience. Still, until consumer trust in the technology improves and certain security issues are resolved, I expect that RFID will continue to have more to do with tracking boxes in a warehouse than helping a shopper locate products in store.

Tags: RFID, ROI, in-store experience, supply chain management