Retailers have been talking about enabling consumers to pay for groceries using their mobile phones for years but, in reality, the mobile payments revolution is still some way off.
Many of the technological intricacies still need to be worked out and, with so many parties wanting to claim a slice of the market – from retailers and banks to mobile operators and phone makers – the value chain is looking increasingly crowded.
However, this does not mean that new technologies are not infiltrating the retail industry. Mobile marketers now regularly make use of geo-fencing, radio-frequency identification (RFID) tags, QR codes and even augmented reality to tempt shoppers into stores and drive sales.
Near-field communications (NFC) is one of the most popular of these technologies. While NFC is generally touted as the technology that will enable contactless mobile payments, it is already transforming the shopping experience in some parts of the world.
For example, the French supermarket chain Casino is using an NFC commerce platform from start-up company Think&Go to create an NFC customer experience at its store in the Belles Feuilles shopping centre in Paris.
Think&Go marketing director Tim Baker told Techworld that the company first got a contract with Casino to help improve the shopping experience for visually impaired customers who have difficulty reading product packaging.
Think&Go placed bright red NFC tags in front of products on shop shelves, so that when customers touched their phones to the tag they could view product information via a mobile interface with big yellow characters on a black background.
The company also incorporated voice synthesis, so that the phone could read out the name of the product, as well as the price, ingredients and nutritional information, if desired.
Casino liked the technology so much that it decided to offer NFC shopping to the rest of its Belles Feuilles customers. Baker described this as the next step on from hand scanners, which are already being widely deployed in France.
With hand scanners, customers use a hand-held barcode scanner to scan a product before putting it into their basket. At the end of their shop, they simply plug the hand scanner into a checkout machine and pay for their goods, without having to unpack and re-pack their basket.
While this system is very popular, it is expensive for supermarkets to roll out - it costs about €200,000 to equip a shop with this technology. Think&Go offers the same experience but with less upfront cost to the retailer, as customers can use their own NFC-enabled phones to scan products.
“It's much cheaper for the supermarket and it is much more convenient for the user because he's already got it in his pocket, he doesn't have to go and fetch a reader,” said Baker.
Casino customers wanting to use the system must download an app to their iPhone or Android device. Although NFC is still not included in Apple products, iPhone users can still participate by picking up an NFC sleeve for their phone as they enter the store.
As the customer walks around the shop and scans items, the app compiles a list of everything in the basket, so that the customer can keep track of their purchases, and add or subtract items.
Unlike most NFC tags, which work by fetching information from the cloud, Think&Go's architecture is completely network resistant, according to Baker. The application contains a database of 170,000 available products, so items can be added to the basket even if there is no network access.
“We're not talking about advertising, we're talking about actually filling your shopping basket, and we can't be in a situation where they say, I can't buy this product because I haven't got any network,” he said.
When the customer has picked up everything he wants, he touches his phone to a contactless payment terminal and the list of groceries is transferred over, using peer-to-peer NFC. He can then pay by cash, cheque, credit card or via the mobile phone if he has a mobile wallet installed.
Think&Go is now working to incorporate special offers into the app, so that if a customer scans a item that is 'buy one get one half price', they are prompted to pick up a second item at the point of decision.
Baker said that the shop itself could eventually become an e-commerce interface. Customers would walk around tagging the items they want, pay using PayPal, and the items would be delivered to their home. This could be particularly useful if the goods are heavy or bulky.
The next step could potentially be to cut out the shop altogether. NFC tags could be integrated into posters at bus stops and tube stations, and consumers could simply touch their phone to the poster to order the item.
Ultimately, Baker envisions customers having a picture board on their fridge with NFC tags for the 40 or 50 products that they buy most frequently. Rather than firing up a PC and ordering groceries via a website, the user could just tap these tags with their mobile phone to order items for delivery.
Think&Go is now working with the company that handles couponing and loyalty points for Casino to incorporate a comparison engine that will allows customers to tag an item and then view a list of alternative products, either in order of price or using criteria such as fair trade or salt content.
It has also created a prototype of a Dynamic NFC Screen, which allows consumers to communicate through a video display using their NFC phones. While most NFC tags are static, the screen contains a matrix of NFC tags which can be programmed using the same computer that broadcasts the video content, and their meaning changed over time.
Baker believes that increased use of NFC in this way will eventually result in greater adoption of mobile wallets. This will is likely to require the help of mobile operators, however, and Think&Go is currently building up a proposition around this.
“If people are using their telephone around the shop to fill up the basket, then paying with your phone will feel natural. So what we're doing fits exactly into their plans,” said Baker
“We've gone through all the hassle of deploying the tags, putting in processes to distribute them, integrating the databases and training staff. We can now go and say, we've done it, we came across a number of things we didn't expect, we resolved them, and now we can deploy it.”