Mobile payments and tap-to-pay systems like ISIS and Google Wallet get all the press love, but one of the most promising uses of Near Field Communications (NFC) next year may not involve direct commerce at all.
According to ABI Research, the nonpayment and mobile marketing uses of mobile-centric NFC chip technology could account for 70% of shipments by 2016. Interactive “smart posters” and other types of mobile marketing that might involve information pick-ups on product labels or in-store messaging will be worth nearly $300 million in tag sales alone, the company projects.
“Companies like Google, Nokia and RIM, as well as innovative mobile network operators, are all exploring new business models and looking for the revenue opportunities outside of payments,” says John Devlin, group director, security and ID, ABI Research. “A number of high-profile technology companies are rolling out smart posters and information pick-up using NFC.”
Devlin says that tests of smart posters began several years ago, including one test in the London Underground that passed maps to people via NFC. “Since then, Google has used them in three cities –- Portland, Austin and Las Vegas -– as part of Google Places, for information pick-up," he notes, adding that the move partners with businesses.
Specialty marketing agencies like London-based Proxana, Blue Bite in the U.S. and Australian company Tapit have already emerged to serve the market in NFC-powered programs. These three firms recently formed a global alliance to promote NFC marketing innovation.
One of the leading-edge companies in the NFC supply chain, Avery Dennison, this year released an “N-Zone” NFC product line that can put NFC tags into product labels, store signage and so-called “smart posters” that can communicate to NFC-enabled phones.
Earlier this year, the leading supplier of NFC semiconductors NXP reported a lower-than-expected rate of shipments as mobile payment schemes took longer to deploy than many had hoped. Avery Dennison, however, is bullish.
“NFC is reaching the tipping point,” said Maggie Bidlingmaier, global director of sales and marketing for the company’s RFID division of the N-zone launch in June. Some market researchers predict that hundreds of millions of enabled phones will ship in the next few years worldwide. “Consumers will quickly demand applications that the technology makes possible,” she adds.
For now, tags cost between $1 and $2 each, according to volumes, Devlin says. Don't expect to see them on mass-produced packaging anytime soon. Still, unlike mobile payment systems that require compatibility with specific credit infrastructures and security schemes, any handset with an NFC reader will be able to access these standardized NFC tags and receive data.
NFC communications take place when an enabled phone is within 4 centimeters or 1.6 inches of the tag. The tag can send information to the phone, a coupon, or a link to richer media like video trailers. Avery Dennison foresees the NFC tags allowing a consumer to tap a poster to get discounts, or swipe near an in-store standup to activate product details.
ABI’s latest report on the broader uses of NFC tags points out that the technology is cheap and easy for marketers because it leverages the network of the user’s phone rather than any complicated infrastructure at the point of communication.
Information can be localized for each tag and the tags themselves can be updated with fresh information so retailers and marketers can react quickly with new information. “By comparison to other solutions, NFC tags offer greater speed of reaction, the ability to update and tailor or personalize solutions which make them quite competitive,” says Devlin.