(If you didn’t read our first post on NFC, What is NFC, and Why do you care?, take a moment to read through it, and then come back to this post to learn about how NFC will affect retailers.)
Given the massive impact NFC will soon have on the retail sales process, it’s not surprising that our retail clients are particularly focused on developments in this area. And in fact, for our retail clients, NFC represents a significant opportunity to improve their transaction processes, increase margins and generally create a better customer experience.
Initially, NFC offers a huge boon to the sales process, with the potential to replace cash transactions to an even greater extent that did debit cards. The majority of cash purchases are for small amounts, under $15. And processing cash payments can be expensive for a retailer, in terms of both time (paying with cash can take 2-4 times as long as paying with plastic) and hard costs (taking fraud, counterfeiting and employee theft into account).
Because NFC technology will enable customers to buy small-ticket items without further verification – in the same way that no one ever asks you to sign for a pack of gum anymore – the prospects of “tap and go” purchases that are still linked to a legitimate account is understandably exciting to retailers of every stripe.
But beyond simply offering a more effective payment form, NFC’s ability to create connections among formerly separate retail tools will allow retailers to see the biggest benefits. The vision of a single system organizing customer behavior; loyalty activity; coupons and rewards; local store check-in; and product information and education holds the promise of a more efficient and effective CRM strategy. And a system that allows consumers to better identify, reward and tailor offers to every customer.
In our next post, we’ll look at the technology from a consumer perspective. What kind of affect do you think NFC will have on retailers?