|From: Glenn Petersen||10/25/2014 4:54:07 PM|
|Let the NFC wars begin:|
CVS Stores Reportedly Disabling NFC to Shut Down Apple Pay and Google Wallet
by Eric Slivka
Saturday October 25, 2014 7:56 am PDT
Earlier this week, pharmacy chain Rite Aid shut down unofficial support for the Apple Pay and Google Wallet mobile payments systems, resulting in an outcry from users who have been testing out Apple's new system since its launch on Monday. Rite Aid was not an official Apple Pay partner, but the payments system generally works with existing near field communications (NFC) payment terminals anyway, and many users had had success using Apple Pay at Rite Aid stores early in the week.
It now appears that fellow major pharmacy chain CVS is following suit and as of today is shutting down the NFC functionality of its payment terminals entirely, a move presumably intended to thwart Apple Pay. Google Wallet services are obviously also being affected by the move.
Multiple reports on Twitter and the MacRumors forums have indicated that CVS has sent an email to its stores indicating that NFC support is to be turned off. It is still relatively early in the day in the U.S., but we are now starting to see reports of NFC indeed being turned off at CVS stores.
The reason behind Rite Aid's and CVS's moves to disable unofficial Apple Pay support in their stores is presumably related to their participation in Merchant Customer Exchange (MCX), a retailer group developing its own mobile payments system known as CurrentC. A claimed internal Rite Aid message shared with SlashGear supports this notion, instructing cashiers to explain to customers that Apple Pay is not supported but that MCX's solution will be available next year.
Rite Aid internal memo regarding Apple Pay
Rite Aid's and CVS's moves are also in stark contrast to competitor Walgreens, which has fully embraced Apple Pay and is one of Apple's launch partners for the service. With over 8,000 stores around the United States, Walgreens has been one of the most popular locations for those testing out Apple Pay over the first week of availability.
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|To: Glenn Petersen who wrote (1648)||10/25/2014 5:34:09 PM|
|From: Glenn Petersen|
|The MCX (CurrencyC) solution does not employ NFC capabilities. It does, however, have an impressive group of backers.|
Eye on Branding: As Wallets Struggle, MCX Dubs Its Scheme CurrentC While Isis Says It Is Now Softcard
By Kevin Woodward
September 3, 2014
Image Credit: MCX
The logo for the yet-to-be-released CurrentC mobile payment app.
The Merchant Customer Exchange, a retailer-controlled mobile payment scheme, has given its service a name. Dubbed CurrentC, the service will not be available outside of testing until 2015.
First announced in 2012, the long-gestating scheme aims to give participating retailers their own mobile-wallet service that eschews the traditional payment networks in an effort to lower payment costs.
When at full scale, more than 110,000 merchant locations will accept CurrentC, MCX says in a press release. Participating retailers, according to the MCX Web site, include Walmart Stores Inc., Target Corp., Southwest Airlines Co., 7-Eleven Inc., convenience store chain Wawa Inc., and regional grocer Hy-Vee Inc.
MCX declined to comment about CurrentC beyond its press release. The Needham, Mass.-based organization says the wallet will be enabled for smart phones using Apple Inc.’s iOS and Google Inc.’s Android operating systems. The service relies on bar-code scanning to complete a transaction.
In addition to a payments function, the app also will store and automatically apply offers and track a consumer’s loyalty program participation.
CurrentC transactions will be secured with a token that is used in lieu of sending cardholder data each time, MCX says. The app will use a bar code unique to a particular transaction and will not require additional hardware from most consumers or merchants, it says.
The significance of the MCX announcement—especially in light of the scant details and a suspected announcement from Apple next week that it may introduce a mobile-payment service—can be read a couple of different ways.
“It’s a reminder that they’re still there,” says Mary Monahan, executive vice president and research director for mobile at Pleasanton, Calif.-based Javelin Strategy & Research. “We’re at the table.”
That’s important because it is rumored Apple will work within the existing payments infrastructure. Merchants are part of the traditional payments system, Monahan says. “And if Apple goes with near-field communication, which is the rumor, they want to remind everyone they could go QR code and not turn on the NFC terminals,” Monahan says. “Apple needs [merchants’] cooperation.”
There are about 800 million iTunes accounts under Apple’s purview. Speculation is rampant that those accounts could be enabled in a mobile-payment scheme supported by an iPhone with an NFC chip. An Apple product announcement is scheduled for Tuesday, but Apple has not disclosed the subject of it.
The CurrentC announcement, even without details, is significant, says consultant Steve Mott of Stamford, Conn.-based BetterBuyDesign. The testing going on now is with actual transactions at merchant locations, an expansion from activity earlier this year. CurrentC also is using tokenization technology from Paydiant Inc., which is providing the mobile wallet technology. And, it provides a preview of the benefit/value proposition with a larger focus on marketing than on payments, Mott says.
“Taken together, these steps verify the sustaining nature of this effort, which has already changed the conversation over how payments should be done in the future,” Mott says. “This announcement underscores the reality of an alternative to the legacy payments system approaches to transacting—EMV, EMV tokens, NFC, PCI, and associated constraints on how merchants and consumers can interact and market together.”
CurrentC, given the lack of major card brands as partners, presents an opportunity for MCX to disrupt mobile payments, says James Wester, practice director for worldwide payment strategies at Framingham, Mass.-based research firm IDC Financial Insights.
The MCX announcement may be a pre-emptive move against the anticipated Apple one, Wester says. “What may be counterintuitive with all of the delayed or underperforming mobile-wallet products to date is that the high expectations for Apple’s mobile-payment plans may be completely uncalled for,” he says. “Why do we assume Apple has special insight into making a mobile-payment product? Perhaps they do, but if they succeed a rising tide lifts all boats.”
CurrentC is well-positioned to drive adoption, says Beth Robertson, principal at Robertson Payment Services LLC, an advisory firm, but two challenges await.
“One is the concern generated by various merchant data breaches may bleed into related concerns that CurrentC offers adequate security protections and liability coverage for users,” Robertson says. “Second is access to the device that options like [Isis] or Apple offer; this may be a hurdle for CurrentC, although not an insurmountable one.”
“Right now, point solutions and trials are viable, but the key to success will be building ubiquity of access, and this may be a challenge for a merchant-driven option,” Robertson says.
In related mobile-payment news, Isis, the mobile-payment scheme backed by AT&T Inc., Verizon Wireless, and T-Mobile USA, has changed its name to Softcard. The new name and logo soon will festoon the enterprise’s Web site and mobile app. Isis said it would rebrand to disassociate itself from the Islamic militant group in the Middle East.
The rebranding will be fraught with obstacles, observers says.
“It’ll be tough to take all of that branding and start over,” Monahan says. “They poured a lot of money into [Isis] and now they have to start from ground zero.”
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|From: Glenn Petersen||12/9/2014 3:41:33 AM|
|The Next Challenge for the RFID Industry: Rapid Growth|
The technology adoption life cycle isn't a smooth upward curve, and that will present problems for users and providers of RFID technologies.
By Mark Roberti
Dec 08, 2014—The radio frequency identification industry is on the cusp of rapid growth. When precisely we will reach the tipping point, I can't say (though I will provide some insights in the next issue of our digital magazine). But I can say that both potential users and providers of RFID technologies will be caught unprepared for the rapid acceleration in adoption.
As a journalist, I've seen it happen before. In the late 1990s, I was an editor at Information Week, a leading IT trade publication in the United States. As late as 1999, CEOs of major corporations were dismissing the Internet as something meaningful for business. Some said they couldn't trust their supply chain to a public network that could go down at any time. Others said no one would come home from working on a computer all day and then shop online.
Things changed quickly—and dramatically. By 2000, General Electric and other companies were trumpeting their use of the Internet. Analysts began to ask CEOs about their Internet strategy on quarterly calls with investors. Suddenly, millions of dollars were being poured into websites. In many cases, the sites were poorly built because the most experienced and sophisticated developers had already been hired. Millions of dollars were wasted.
The same thing will happen with RFID. CEOs who are now dismissing RFID as useless—amazingly, many still do—will be taken by surprise when the technology takes off, and will have to scramble to catch up. They will wind up hiring second- or third-rate systems integrators who have also jumped into the game late and know little about RFID. Projects will be bungled, and will require cost additional dollars to fix.
RFID vendors will also be caught by surprise. Many companies have been burned by investing too much too early in anticipation of growth that never occurred. Now, many are holding back on investing in capacity, because they are concerned that the growth won't materialize. When it does come, there will be a scramble to try to meet demand. Some companies will be outflanked by more nimble competitors and lose market.
What should companies do? My advice to potential users of RFID, particularly in apparel retail, is to begin exploring the technology now. Get a pilot going and identify reliable providers of RFID hardware, software and services. That way, you will have an understanding of the technology, some internal expertise and some outside companies with which you can work. Don't wait until your competitors announce major rollouts before you begin thinking about using RFID.
RFID vendors have more difficult decisions to make. They have to manage their burn rate, and if they invest too much in capacity and it doesn't materialize, they will face a cash flow crisis. I would advocate increasing marketing budgets in select markets that are seeing growth. Building brand is going to be important as adoption accelerates. Continue investing in product improvements and partner to create a whole product.
Spending limited marketing dollars wisely can help create brand awareness in a particular market, so when a company—say, a medical device manufacturer—wants to use RFID, it thinks of your tags or software. Right now, very few RFID companies have much brand awareness, so the market is wide open for any company to become the "gorilla" (the dominant player) in a particular industry.
Targeted marketing can lead to sales, which can be reinvested in either capacity or more marketing. There's another benefit as well: If you need to raise funds, venture capitalists are more likely to invest in a company that has brand awareness in a target market.
RFID Journal has been investing in preparation for growth. We built a custom content-management system for our news and events sites, and moved all of our sites to a cloud-based architecture. If traffic had ramped up with our old, server-based system, the site would have crashed quickly. Now, we can handle any spikes in traffic. We are planning new non-English sites, but will need to manage our investments in the same way vendors need to manage theirs. So I understand the challenges. The important thing is to recognize that growth is coming and that it will be rapid, and to try to be prepared.
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog, the Editor's Note archive or RFID Connect.
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|From: Glenn Petersen||5/23/2015 5:52:46 PM|
NXP Semi: Up 643% Since IPO, the Story’s Not Over, Says Bernstein
By Tiernan Ray
May 12, 2015, 10:45 A.M. ET
Shares of chip maker NXP Semiconductor ( NXPI) are up $1.60, or 1.5%, at $101.97, after Bernstein Research’s Stacy Rasgon this morning initiated coverage of the name with an Outperform rating, and a $133 price target, writing that the stock has already been a “home run” since its IPO in 2010, but that there’s more to come as the company heads toward its merger with Freescale Semiconductor ( FSL).
“In short, we believe the story is not yet over,” he writes.
“Over the intervening 5 years or so [since IPO] the stock has returned more than seven-fold to investors, a ~50% compounded annual return over the time period, due to a combination of improvement in fundamentals, deleveraging, and multiple expansion,” notes Rasgon.
Rasgon sees a few reasons why there’s more upside left:
In particular, we believe the company can likely maintain their above-market revenue growth trajectory, due in large part to the structural benefits of automotive exposure and continued growth in mobile payments, with overall revenue diversification helping to at least partially mitigate downside from any one given market. We believe the forthcoming Freescale acquisition may hold more to it than meets the eye. And we believe (with $9-$10 in likely earnings power post-deal) that valuation is compelling.
Rasgon likes the profile of the part of the company that is “high-performance mixed-signal” chips, which makes up just under 75% of total company revenue.
Such “HPMS” chips go into the sensor hub that collects sensor data in Apple’s ( AAPL) iPhone, for example; and a lot of it goes into connected cars, and things such as digital identification for electronic passports.
Rasgon is very excited about the automative and the NFC transactions capabilities in mobile (such as Apple’s Apple Pay):
Automotive: ~25% of NXPI’s HPMS business, with a leadership position in audio entertainment, in- vehicle networking, and secure car access. Overall we are positive on the auto semiconductor market in general and believe trends around content increase can disproportionately benefit NXP. The company believes it can grow faster than the SAM of the auto markets they target (6-7%), with growth targets of 8-9%. The FSL acquisition will further solidify their presence in automotive in complementary markets. Secure Connected Devices: ~25% of HPMS, a bit of a hodgepodge of business that include multimarket microcontrollers, mobile audio/sensing, low-power RF/IoT, and silicon tuners. However, it also includes NXPI’s mobile transactions business (e.g. near-field communication), about ~$400-450MM currently and with the potential to drive very strong growth as we remain in the early days of mobile payments.
Of “secure ID” portion, including the government e-passport work, he writes “overall, this business is the most difficult to forecast due to lumpiness of government projects.”
The other 25% of company revenue is “standard products,” of which Rasgon writes, “This is primarily a discretes business, with lower growth and margins than HPMS. NXPI likes to say that it is the “best” discrete business out there (and they may be right); it is a candidate for sale if the company can ever drum up enough interest at the right price. In the meantime, it generates cash.”
Rasgon’s very positive on the pending Freescale deal:
We think the deal makes sense strategically, with a more complete product portfolio, cost synergy, and potential revenue synergy down the line. We believe cost synergies (~14% of current combined opex, as well as scale benefits) appear reasonable, and NXPI may be able to accelerate the leverage inherent in FSL’s current model […] Finally, there could be additional revenue and/or balance sheet synergies (including debt refinancing) that could drive more upside […] The combined company will hold more than $11B in annual revenues, making it the largest semiconductor supplier to the automotive and MCU markets, and one of the largest semiconductor companies overall […] Additionally, it is likely that NXPI can do positive things with FSL’s balance sheet, particularly given the latter is paying interest at a higher rate than the former. We also note that the sale of NXPI’s high-performance RF business (whatever it might sell for) should bring in additional cash that can be deployed to further de-lever the balance sheet.
And NXP stock is a good value considering the earnings power of the combined companies, he writes:
NXPI’s current valuation appears fair. However, valuation for the combined company significantly improves once taking into account appropriate cost synergies. – In particular, the combined company (on a pro-forma basis) would likely be trading at ~10-11x P/FE, extremely attractively valued. On an EV/sales or EV/EBITDA basis, the company trades in line to slightly below peers on the same basis, for substantially higher growth potential. Hence, we view valuation as compelling. The standalone company has been trading at ~14x NTM EPS for the last year prior to the deal announcement; we believe such a valuation on the combined company is fair as well. On a potential $9-$10 in normalized combined EPS, this would correspond to a ~$133 target price.
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|From: Glenn Petersen||5/28/2015 5:49:57 PM|
|The system uses Near Field Communication technology, which is already embedded in most Android phones. A growing number of store-payment terminals include NFC technology; Google Wallet service worked on some of these, although the process was more cumbersome.|
Google Unveils Apple Pay Rival
Android Pay uses technology already embedded in most Android phones
By Alistair Barr
The Wall Street Journal
Updated May 28, 2015 3:42 p.m. ET
Google Inc. GOOG -0.00 % revised its mobile-payment service Thursday with new partners--including wireless providers, payment networks, retailers and banks--stepping up competition with Apple Inc. AAPL -0.20 % in an area with big promise and multiple challenges.
Android Pay software is included in the new version of the Android mobile-operating system, showcased at Google’s I/O conference in San Francisco. Google said the payment service will be available in coming months and will work with previous versions of Android, beginning with KitKat, which came out in 2013.
Android Pay doesn't need a separate app to work on Android phones, unlike Google’s previous troubled mobile-payment efforts under the Google Wallet name. Users will be able to load their credit, debit and loyalty cards onto the phone, unlock their device with their existing password and tap to pay at more than 700,000 physical stores in the U.S., the company said.
Participating retailers include McDonald’s, Macy’s, Best Buy, Walgreen and Whole Foods, Google said.
The system uses Near Field Communication technology, which is already embedded in most Android phones. A growing number of store-payment terminals include NFC technology; Google Wallet service worked on some of these, although the process was more cumbersome.
The new Android operating system will support fingerprint scans to unlock phones and authorize payments, much as Apple has done with its iPhones and Apple Pay service. Google said phones with fingerprint readers will be available later this year.
Like Apple and other tech companies, Google sees payments as a way to embed itself more deeply in users’ lives. Google also hopes mobile payments in stores will help it gather more information about users’ purchases, which may show the effectiveness of Google ads.
Mobile payments have struggled to catch on with consumers because swiping a credit card in a store is already quick and easy. Apple Pay, which began late last year, began to change that view and has proved popular with some consumers. It also sparked other technology companies to update their payment offerings.
Apple gets paid for its payment service through a cut of transactions from the issuing bank of the credit card being used, or a flat fee on debit cards.
It isn’t clear how Google will get paid for the Android Pay service. An executive and a spokeswoman at the company said Thursday that the goal is to make Android phones more useful. The spokeswoman declined to comment further.
Google is using similar security technology as Apple, called tokenization, to protect users’ credit-card information. The technology replaces card numbers with one-time random codes, so if payment details are stolen they are un-useable.
Google said Android Pay will work through the Visa, MasterCard, American Express and Discover payment networks.
Big bank card issuers in the U.S., including J.P. Morgan Chase, Bank of America and Capital One, are planning to take part in Android Pay, according to a person familiar with the service.
Android Pay also will work within certain bank apps, and USAA’s banking division is an early partner, Google said.
Google said new Android phones from Verizon, AT&T and T-Mobile will include Android Pay.
Write to Alistair Barr at email@example.com
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|From: John Andry||6/4/2015 5:41:07 AM|
Nice info here but i want more to know something about RFID devices how the radio frequencies are work i did'nt experience that kind of tracking devices, i just want to get first time i have a Business in USA and i need that kind of tracking devices for my Business, which track my assets, file and document easily that's why i'm looking for some best reliable and also affordable RFID Services Providing Company and i need more help from you guys if anyone experienced that kind of tracking Services Providing Company so please refer me suggest me and i also found some websites who Provide RFID Tracking Services in USA, again i need more help from you guys compare that sites and select the best one for me... thanks in Advance to All :)
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|From: Glenn Petersen||3/23/2016 3:28:01 PM|
|Chip-Card Payment System Delays Frustrate Retailers|
By RACHEL ABRAMS
New York Times
MARCH 22, 2016
Avi Kaner, co-owner of Morton Williams supermarkets in New York, with a stack of chargebacks from credit and debit card companies that he says he is required to pay even though the chain spent $700,000 to update terminals to accept embedded digital chip cards. Credit Danny Ghitis for The New York Times
Avi Kaner, a co-owner of the Morton Williams supermarket chain in New York, has spent about $700,000 to update the payment terminals at his stores.
Trouble is, he cannot turn them on.
The new terminals can accept credit and debit cards with embedded digital chips, a security feature intended to reduce the number of fraudulent purchases.
But before the payment systems can work, they must be certified, a process that Mr. Kaner and many retailers around the country are waiting to happen. In the case of Morton Williams, the holdup has lasted several months.
The cost of waiting, retailers say, is piling up. Until recently, banks covered much of the cost of fraudulent purchases. Since Oct. 1, though, merchants that cannot accept chip cards have had to shoulder the cost of fraud, and banks have not been shy about passing along the bill.
“It’s been very frustrating,” Mr. Kaner said in an interview last week at his office in the Bronx, the home of his family-owned business. He bought most of the equipment he needed before Oct. 1, he said, and has been waiting months to get it certified. The delay, he said, pointing to a tall pile of paperwork, has cost him thousands of dollars in payments for fraudulent purchases.
“There’s no recourse,” Mr. Kaner said.
The long delays are just the latest black eye for the deployment of the new systems. Some consumers have not yet received new cards. Many merchants have not bought the updated equipment. And even when the cards and the terminals have been updated, they have generated confusion and slow lines.
Many of the complications were widely predicted, but the certification system has added an unexpected wrinkle — and lots of finger-pointing.
Banks say that retailers waited till the last minute to update their terminals. Retailers point to financial ties between the banks and the companies that provide certification, saying there is no motivation to move faster.
“I think there are merchants who should have been prepared and aren’t,” said Thad Peterson, a senior analyst with the research firm Aite Group. “I think there are merchants who thought they were prepared but aren’t.”
For years, retailers have argued that the technology, commonly referred to as E.M.V., which stands for Europay, MasterCard and Visa, the technology’s early advocates, mainly protected banks. Mr. Peterson estimated that only 40 to 50 percent of retailers are capable of accepting chip cards.
A credit card with an E.M.V. chip being scanned at a Walmart Supercenter in North Bergen, N.J. Credit Bryan Anselm for The New York Times
Each part of a transaction must be certified, including the payment hardware and each payment network, like Visa or MasterCard, that merchants accept. To get certified, businesses work with payment processors like First Data and Vantiv.
The whole process, even when it goes smoothly, can take weeks or months.
It is hard to say exactly how many retailers are affected by the delays. First Data, one of the country’s largest payment processors, said that about 20 percent of the four million American merchants it works with are in the process of being certified.
Complaints have been widespread among midsize businesses — not as small as a mom-and-pop corner store but smaller than a big-box chain.
Midsize merchants have more specialized needs than a store with a single location, for example, as a bigger business often needs payment software tailored to specific loyalty programs, inventory or other systems. Those tailored systems can complicate the approval process.
That’s something Mr. Kaner has learned the hard way.
“They’ve delayed month after month of providing certification,” Mr. Kaner said of Vantiv. “I asked to speak to their legal department, and their legal department basically told me tough luck.”
Mr. Kaner said it was difficult to know exactly what was holding up the process, because Vantiv must also work with a merchant’s software vendors and payment hardware manufacturers.
In a statement, Vantiv said that “the conversion to E.M.V. is highly dependent on the business priorities and timelines of the many other parties involved in the complex integration process, as was the case in this instance.”
Retailers have also pointed to the financial ties between banks and processors, raising questions about whether the companies are inclined to work slowly.
Fifth Third Bank owns about 18 percent of Vantiv, for example. Some of the largest card issuers, like JPMorgan Chase, even have their own payment processing units. Bank of America’s processing arm, Bank of America Merchant Services, is a joint venture between the bank and First Data.
Payment processors “don’t have any incentive to hurry the certification along,” said Patrick J. Coughlin, a lawyer for retailers in a recent lawsuit that accuses the major card networks of deliberately creating impossible requirements for merchants. “They’re not the ones paying the fraud charges.”
Visa and MasterCard said they were reviewing the lawsuit. American Express said that it believed the charges lacked merit and that it planned to “defend the case vigorously.”
Cedit card chargebacks. Since Oct. 1, merchants that cannot accept chip cards have had to shoulder the cost of fraud. Credit Danny Ghitis for The New York Times
MasterCard’s president of North America, Craig Vosburg, said that the company continued to “work with parties across the industry” to help the transition.
Trish Wexler, a spokeswoman for JPMorgan Chase, said, “If it’s our fault that our merchant is delayed in getting a compliant terminal, then we absorb chargebacks for card-present fraud during that time period.” A spokesman for Bank of America Merchant Services declined to comment.
Jason Oxman, chief executive of the Electronic Transactions Association, a trade group representing the payments industry, dismissed the idea that processors might benefit from delaying certification.
He said he had not heard of widespread certification delays, and added that merchants were given plenty of time to prepare for the shift to E.M.V. The transition has been in the works for several years, and some of the new payment terminals have long been widely available.
Some merchants also deliberately waited until after Oct. 1 to begin updating their equipment, arguing that the deadline was just before the busy holiday shopping season.
Now, they may just be paying the price.
“Merchants are starting to see counterfeit liability appear on their statements that they’ve never seen before,” Mr. Oxman said. “And I do think that may be creating some frustration.”
But Mallory Duncan, general counsel at the National Retail Federation, a trade group, said that the payments industry was unprepared to handle the flood of requests that came in around the Oct. 1 deadline.
“They didn’t allow for enough time or people to perform this certification,” Mr. Duncan said. “Merchants have gotten slammed because they weren’t able to get certified, because the networks failed to provide the necessary resources to do that.”
Mr. Kaner, of Morton Williams, said that since Oct. 1, customers who have contested charges made with E.M.V.-enabled cards have succeeded in getting many transactions reversed — at Morton Williams’s expense.
Mr. Kaner worries that some customers may be using the Oct. 1 liability shift to get out of paying for legitimate purchases. The number of chargebacks, he said, has risen sharply.
“It started out as a trickle, and now it’s turning into a flood,” he said. “In the first couple months, it might have been a few hundred dollars a month. Now, it’s thousands a month.”
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|From: Glenn Petersen||4/19/2016 9:50:36 AM|
|Exclusive: Internet of Clothing Is Coming Through Huge Label Deal|
by David Meyer
April 18, 2016, 5:29 AM EDT
Evrythng's vision of "smarter shoes" with digital identities. Evrythng Deal between Avery Dennison and Evrythng will see 10 billion pieces of apparel “born digital.”
Your clothes are going online.
Avery Dennison AVY 1.10% , a packaging and labelling giant that puts labels onto products from brands like Nike NKE 0.12% , Adidas ADDYY 2.72% and Hugo Boss BOSSY 5.18% , has struck a deal with “Facebook for things” firm Evrythng to create unique web identities for at least 10 billion pieces of apparel over the next three years.
Evrythng manages the digital identities of items, from packaging to smart lightbulbs, in much the same way as a social network manages the identities of people — keeping track of their latest “status” and ultimately helping to connect them. The deal with Avery Dennison will see these identities assigned to apparel, shoes and various accessories at the point of manufacture, creating use cases beyond the point of sale.
“This is probably the biggest deal the [Internet of things] industry has had,” Niall Murphy, the CEO of Cisco CSCO 1.04% and Samsung-backed SSNLF 5.00% Evrythng, told Fortune. “It’s a program we’ve been working on for quite a long time.”
Avery Dennison already adds basic individual identities to millions of products for supply-chain purposes, but this new arrangement, based on Avery Dennison’s new Evrythng-powered Janela “smart products” platform, creates opportunities for various kinds of interactions between consumers and those products.
You’ll be able to do things such as check the authenticity or manufacturing history of that shirt you just bought, participate in various after-sales loyalty schemes or recycling programs, connect with third-party apps, see exclusive smartphone content, and re-order products you like.
Meanwhile, the retailer will also be able to use the items’ identities for things like detecting fraudulently returned products.
Evrythng has been working with individual brands for some time, on various experiments to do with giving items of apparel their own digital identities. However, doing this by default at the point of manufacture means the brands don’t need to weigh up the benefits before deciding how to integrate the functionality.
“The digital capability is there, and it’s about figuring out how to use it most effectively,” said Murphy. “Products are able to be born digital.”
Evrythng’s main relationship here is with Avery Dennison, but it may also establish an ongoing relationship with the brands themselves, depending on what they need to do with those digital identities in the future.
Technologically speaking, things will start simple in most cases, with printed QR codes that the customer can scan with their smartphone to access a service or identify the piece of apparel.
However, that depends on the type of apparel, and tiny wireless chips using NFC or RFID technology will also often be part of the mix — for one thing, they would allow the product to generate extra data (think of Nike’s smart training shoes), and they clearly have implications for stock control.
“In the past, when we look at some of the technologies, QR codes and so forth, they were more for generic interactions,” Mitchell Butier, the CEO of Avery Dennison, told Fortune. “Consumers want a more personal relationship — they want to have product suggestions from the retailer based on what they personally want.”
With this kind of personal link, could we not end up with a lot of pieces of clothing that help track the wearer? What about the privacy implications?
“It’s clearly a fundamental concern,” said Murphy. “I think brands have an increasingly important responsibility to be transparent with the uses of the data that they’re providing. And clearly part of our role at Evrythng, managing very large amounts of information, is to provide the infrastructural integrity to ensure this data is well protected.”
Murphy added that no-one should be tracked without their consent. “Brands have to nurture trust with the consumer,” he said.
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