The Logic Group Blog

The big news this month is that Apple has chosen not to include NFC support in the new iPhone 4S. So what does this mean to the advancement of NFC customer loyalty interactions at point of sale?

Right now there are a number of NFC loyalty initiatives in the UK and Europe but penetration of these so far is low. There just isn’t a clear business case for an NFC based loyalty solution in a large retail estate, yet. What will tip the balance is the convergence of other interactions around the mobile device; payment, customer loyalty, couponing, marketing alerts etc. We all see this just around the corner with the likes of Google wallet and other operator led initiatives hitting the news every day. So why aren’t these leading to widespread NFC adoption and why didn’t Apple see the need to jump on the band wagon?

Perhaps for a large retailer to fully realise the benefit of NFC technology at point of sale it really is an all or nothing situation. This means aligning a number of diverse business objectives that have traditionally been managed by different parts of the organisation and have until now had unclear potential in a combined proposition.

Chances are the customer loyalty programme is driven by the marketing function. It may or may not be at a stage in its lifecycle that supports in-depth review and realignment around an integrated mobile strategy. A similar challenge could also exist with the payment process. Managed by the IT department or the Operations team the platform might be at the end or part way through a PCI DSS led update or other major refresh project.

Tackling the complex integration of NFC reader or combined PED with the existing point of sale solution piece meal without a clear strategy to meet all these emerging opportunities just doesn’t make sense. What retailers need is a single technical approach that can support the efficient introduction of these services as the business realigns its customer engagement strategy to maximise the new opportunities that mobile interactions present.

So there are challenges. But these will be solved because the stakes are high. I have no doubt that a well designed point of sale experience built around an engaging mobile proposition has the potential to drive incremental revenue more effectively and efficiently than we have been able to achieve before. This will be achieved by optimising the use of behavioural data in a real time solution that delivers what the customer wants at the right time.

It will be interesting to watch the adoption of this technology over the next year or so. None of us would deny that Smart phone take-up is accelerating as the devices become more and more central to the daily lives of a lot of people. As this penetration increases we get closer and closer to that tipping point where using a mobile device at point of sale becomes routine. Maybe then Apple will choose to offer NFC functionality to its growing customer base.