What brands should know as NFC technology comes of age

Rather like the "year of mobile", the dawn of the age of the internet of things had been predicted for so long that, by the time it became a reality, social conversation had moved on. However, several tech developments have now converged to finally make connected items a viable brand platform.

First, the number of NFC-capable (near-field communication) phones has grown by 56% in the past five years. The proliferation of these devices, which can, at a touch, respond to an NFC-enabled item, has created a ubiquitous platform that will provide brands with the reach and outcomes needed to justify investment.

Meanwhile, at the other end of the chain, NFC tags have moved from being manufactured using silicon to being made from plastic, making them more affordable, Cameron Worth, founder of SharpEnd, points out.

As a result of these two trends, and according to research from Gartner, there will be 20 billion connected items by 2020, up from 8.4 billion in 2017. But what are the implications of this for brands?

According to Francisco Melo, vice-president and general manager of global RFID at clothing-tag manufacturer Avery Dennison, its brand customers are looking for a way to reconnect more directly with their consumers.

"If the product has a digital identity and a way to connect the brand directly to the end user, there is opportunity to share product information, reviews, enable easy re-ordering, show provenance and so on. NFC is one way for brands to drive this one to one connection between a physical product and dynamic digital content and functionality," he says.

This connection extends from the ability to deliver brand protection and customer reviews to mobile self-checkout. When combined with data, such as location, these experiences can also be highly personalised, Melo notes. There is a real ecosystem forming around NFC capability, Worth adds: "Brands, such as Malibu and Absolut, are deploying smart-packaging pilots and ‘scaleups’ with great success."

The facility to be able to update the software platform as and when it is needed also means that NFC-enabled items need never go stale. For example, a tag that unlocks content about the making of a limited-edition bag one day, could be used as a pass to an invitation-only event on another. The resulting additional layer of value above that of the item’s intrinsic worth generates a halo effect around the perception of the brand.

Lego is among the toy brands using NFC as an avenue to bring products to life for children, extending their play lifetime and value. The brand created a game, Lego "Dimensions", with which children can interact using NFC-enabled pieces of its plastic bricks.

Elsewhere, sportswear manufacturers Nike and Adidas are leading the charge in fashion retail. Both are implementing NFC tags into their products and exploring the ways in which these can be used to build loyalty and utility for customers.

"Right now the main work to be done is to identify credible value propositions and it would be nice to see more fashion/clothing brands embracing their products as always-on media platforms," Worth concludes.