Prada to build loyalty in New York with RFID

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By: Wise Marketer Staff |

Posted on April 29, 2002

Radio-frequency identification (RFid) tags are to be used to identify customers, merchandise and staff in Prada's new Epicenter store in New York City. The tagging system is expected to enhance service and, consequently, build customer loyalty to the store.

The RFid smart labels, to be provided by Texas Instruments, will identify individual customers, members of staff and merchandise, and will link individual shoppers with information about their selections before and after they make a purchase. The smart labels and readers are placed at numerous 'touch points' throughout the Prada Epicenter store, aiming to create a seamless shopping experience which has been designed to enhance customer relationships.

Prada sales personnel are equipped with a wireless RFid handheld reader that gives them up-to-date access to inventory and customer information stored in a central database. Sales personnel also use the device to read RFid-tagged products and identify staff wearing RFid 'clips'. The device also controls video screens throughout the store, which demonstrate products on the runway, show collection photographs and designer sketches, and provide in-depth information about the colour, cut, fabric and materials used to create the merchandise.

In the dressing rooms, RFid readers identify all merchandise a customer brings inside and displays information on the garment on the interactive video touch screen display. From the touch screen, customers can access product specifications as well as alternative and complementary items and accessories. Using RFid technology linked to customer information stored in the central database, Prada will be able to provide a good customer experience across multiple sales personnel, and in any subsequent Epicenter stores.

"Prada is a spectacular example of a retailer delivering on new forms of customer interaction and CRM," said Tres Wiley, strategy manager for emerging markets at Texas Instruments RFid Systems.

Footnote: Since this article was written in April 2002, Prada has apparently discontinued the use of RFID technology for customer tracking. Although not specifically mentioned as a reason, The Wise Marketer notes that RFID-based consumer tracking has proved unpopular with a small-but-vocal segment of consumers, particularly in the US and Europe. Other companies (such as the German retailer Metro Group AG) have also experimented with RFID-based tracking associated with a loyalty programme. In the majority of cases, the technology has been withdrawn again after consumer pilot programmes. One major exception is the increasing popularity of contactless payment cards (such as 'Blink' in the US) - possibly helped by the fact that many consumers are unaware of the fact that contactless payment systems are based on RFID technology (suggesting that the approach taken to RFID is more important to the consumer than the technology itself).

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