Digital Signage: RFID Data Can Open New Horizons for Retailers

A new report from research organization Datamonitor suggests brick-and-mortar retailers can make up some ground on their Internet rivals through the smart use of technologies like digital signage.

The report, “Shop X: where’s the store heading?,” notes digital signage systems have the ability to identify the presence of viewers, thereby turning up or down the volume control automatically; detect when a shopper points at an item, thus triggering relevant ads on nearby displays; and even figure out what sex and size a nearby shopper happens to be.

Sex and size? At first glance, that seems like a lot of fluff and hype, but it isn’t. As retailers begin using RFID tags in their merchandise and start designing their digital signage systems with RFID sensors, making an educated guess about the sex and size of shoppers becomes possible.

If you aren’t familiar with RFID, here are the basics: RFID (or radio frequency identification) devices use radio waves to transmit digital information, such as the information that’s currently encoded in barcodes, to a special receiver. Like a TV or radio station, RFID tags can transmit at different power levels, which affects how far the tag can be separated from the receiver. Unlike a radio or TV station, these things are tiny –so small that they can be inserted under the skin of animals and people to serve as personal electronic IDs or embedded directly into merchandise.

(While I’m not going to use this space to discuss the privacy concerns raised by these devices nor reports last month of lab findings showing they possibly cause tumors in lab animals, I must acknowledge the existence of these serious issues.)

For retailers, RFID tags have been seen as a Holy Grail of sorts in the drive to reduce waste and improve margin. For instance, its backers see RFID technology as a way retailers can improve inventory control, track products from a manufacturer till they leave a store and enhance in-store security efforts. Working with a digital signage system, they can even assist in-store marketing efforts.

For instance, imagine it’s the holiday season and a shopper enters a women’s clothier after buying merchandise with an RFID tag embedded at the store next door –perhaps a pair of Manolo Blahnik high heels (for all of you Carrie Bradshaw fans out there.) If that retailer had an RFID reader, some interesting information could be derived from those RFID-tagged, trendy shoes, including size and model. With those two pieces of information alone –and a reasonable guess that the shopper is a woman- a database of commercials can be scoured to retrieve just the right one to playback for the designer shoe buyers– perhaps the right fragrance or designer dress.

If you let your imagination roam, you can begin to see why Datamonitor has identified technology as a way for brick-and-mortar retailers to begin competing more effectively with their online rivals. It’s just possible that what cookies are to Web sites and marketers, RFID tags and digital signage systems could be to real-world retailers, namely a way to gather information about shoppers and market to them on a personal level, based on knowing something about who they are.

Whether it’s RFID technology, proximity detectors, temperature gauges, motion sensors or any of a number of other input technologies and data sources, the bottom line is digital signage systems don’t have to blindly prattle on with messages that are out of context. They can be enabled to gather information from their environment and display the appropriate content to better serve the shopper and the retailer.