At the women’s shoe department in Mitsukoshi’s flagship store in Nihonbashi, Tokyo, customers can easily find their right shoes using an RFID-based technology, which is carefully installed in the retail space. The technology is used at seven locations across the country and surprisingly the shoe departments’ sales have been increased by 13.3% ever since. A similar technology was introduced at nine designer jeans stores as well. PingMag has recently interviewed Masakazu Nishida, the general manager who leads Mitsukoshi’s RFID project, to learn more about the details that do matter in designing digitally enhanced retail spaces.
Written by Shin’ichi Konomi
Mr. Nishida, this is the second time we get together to talk about RFID technology. Since we talked in February for the last time, what has changed since then?
I can’t remember how much I mentioned then our initial approach of using RFID technology for the last time. In the beginning the important thing for us was to improve the work processes. We are now focusing a lot on RFID on sales floors and how to use the technology for merchandizing as well. We ask ourselves: How can we avoid making customers wait? How can we make sales floors more pleasant?
When I look around here on the women’s shoe floor, I see items equipped with an additional RFID tag next to the usual price tag. Before we get to the how to use the technology, I’d like to talk to you about the pure look of it.
It is quite big, well visible and if I wasn’t particularly attentive, I might just think that it is just another harmless tag attached to the shoe. You must have thought a lot about the RFID tag’s shape, size, and so on. What are your conclusions?
We have the feeling that this tag works well for customers because they are used to the size of price tags. Journalists often complain, saying: “It just looks like a regular paper tag!” – But we didn’t design it for journalists. Some said that they preferred a more transparent design, something that reveals the inside, shows some wires giving it a more “mechanic” look. Other TV journalists tried to break a sample tag hoping to reveal the inlet, but they couldn’t. The tag is made pretty durable.
The idea behind the chip attached to the shoes is obviously to scan the RFID tag and get some information about the product: Whether the shoe is available in a particular size or color displayed on a touch screen above the scanner. Formerly only used for staff, the RFID scanner is now integrated in the shoe department to allow customers to view all sorts of information, too. To what extend are they comfortable with using this technology? Previously you said that customers didn’t really use the touch screen computer, which is also because they weren’t used to have access to computers in the store yet. That was almost a year ago. How are things now?
Still, customers don’t use it so much. It seems that more customers use
the touch screen computer at the Ginza store than at the Nihonbashi store.
There are some differences depending on the store, but it’s not like we have customers waiting in line to use the touch screen computer.
So would you say that the technology is still too abstract for people to use? What needs to be different?
Human services are important for the department store business and indeed they are what many customers expect. Well, we could possibly make a better screensaver program. That might make some difference. Also we could motivate customers to use the touch screen computer in different ways… But is it worthwhile to try so hard? We are using it to improve customer service, so it’s also okay when the salespeople hold a shoe next to the computer instead of checking information and answer customers’ questions.
Let’s get to the touch screen interface. What kind of information is offered and how can you actually search for something?
Generally I’d say that people need more support for searching and sharing in department stores. Since commonly there are no such tools for searching, humans have to search everything manually.
Now that we introduce this RFID shoe tag reader, it seems that people really like the feature to perform an “inverse search” for shoes. It’s the search for the question “I’m interested in this size – What shoes do you have?” as opposed to the usual “I’m interested in these shoes – What sizes do you have?”
That was achieved easily by a “Search Other Products” button that allows people to ask the other way around.
Customers in Japan are used to a maximum service – in particular at places like Mitsukoshi. To what extend are customers interested in doing things themselves at all?
Many of our customers don’t think about checking things by themselves. And we do assign enough staff for customer service tasks. But, really, it can get so busy around 4 PM that a salesperson must serve multiple customers. In thas case this RFID technology is quite useful. Also, one can get accustomed to using it. I heard that some customers after seeing someone else using it, started using it, saying “Me, too. Me, too! Tell me what to do.”
You started to use a similar system at a designer jeans store from last September on. I do remember your pilot test in February where you tried a variety of things. Let’s start with the “smart shelves” (jargon for shelves that “know” what they contain by embedding RFID readers in the shelves and tagging the items with RFID chips — the idea of combining this technology with surveillance cameras or RFID consumer loyalty cards raised keen privacy concerns, To preserve consumers’ privacy, Mitsukoshi’s ‘smart shelf’ trial did not use cameras or any technologies for identifying consumers and conformed to the Japanese RFID privacy guidlines. ) – What became of those “smart shelves” during and after your tests?
Usually “smart shelves” used in other pilot tests have been designed for salespeople who refill sales items. We designed our “smart shelves” for our customers. We installed a colored e-paper device that displays our stock levels: RFID readers are embedded in the shelves, the items are tagged as mentioned before and colors like green or blue on the display indicate e.g. “this item is not on the shelf but is available in the back.”
During February’s pilot test you also introduced “intelligent” fitting rooms – equipped with RFID readers. How did that work?
Fitting rooms are too small for big computers like the ones on the shoe floor. So in order to still have a computer we used one of Cisco’s IP phone devices that have a touch panel, too.
We attached RFID tags to so-called premium denims whose prices range from ￥20 000 to ￥50 000 (US$170 – US$430). Nowadays these denims sell very well, so we need to be knowledgeable about them, but what if our customers know much more about those jeans than our sales people do? Customers frequently look for the designer jeans that appeared on magazines. But, it can be difficult for salespeople to remember which jeans appeared on which magazines. In other cases, customers may want to browse around the jeans that have a certain style. But, what if salespeople don’t understand a customer who says “I need boot-cut jeans?” What if they can’t immediately answer what kinds of “deliberately damaged jeans” we offer?
For those situations we offered various search options on these devices in the fitting rooms. The conclusion is that salespeople used this system more than customers, though.
Another interesting technology you tried were active RFID tags for “Customer Relationship Management” (CRM). (For those who don’t know what that is: Active RFID tags are tags that have batteries in them and communicate from a distance (e.g. 10m or 100m). Using them for CRM usually means to identify and track in-store customers who carry them) You tested this, but decided not to use it in the end because of privacy issues and technical difficulties. How did the test go though?
Customers who agreed to participate in the test in advance carried active RFID tags with a read-range of about 10 meters that sent a message to a salesperson’s mobile device when entering the store. When customers pressed a blue button on the tag on a pair of jeans they would automatically “order” a salesperson to come. But, well, it was not easy for the salesperson to identify the customer who pressed the button as soon as there were a few customers in the store. Overall, things are pretty difficult when it comes to active RFID.
After testing all those different technologies – what happened to the “smart shelf” in the end? Did you decide to install it after all?
Some people were against the introduction of the “smart shelf”. They didn’t like that if we showed what we had, we also had to reveal that certain items were out-of-stock. They argued that business starts when customers talk to salespeople, that is, when customers ask if something was available or not. If the customers already knew that something was out-of-stock and they wouldn’t have to ask, they would simply walk away.
However, we could prove that showing stock levels on the “smart shelves’” e-paper display increases the “hit rate” of purchase. It seems to facilitate shopping. Without having to turn the jeans around customers could already check if their sizes were available or not – and they could quickly browse around the other sales items.
So they are effective and we want to use them. We did the pilot in collaboration with Fujitsu and they have yet to commercialize the e- paper device. That simply means they have not launched yet. However, we already installed the RFID tag-based system introduced at the shoe department at nine other jeans shops. One can now check the stock levels using this mobile phone RFID reader.
A mobile RFID reader which provides the functionality similar to the touch screen computer in the shoe department. It’s small and lightweight, and used by salespeople.
Screenshot of the mobile reader, right after scanning the jeans’ tag. It shows available sizes, and so on. Salespeople can update the status of sales items as well.
Thank you very much, Mr. Nishida. Any final remarks?
The scale of our efforts may be small but it seems that our ideas sound “new” to people in other countries. We do have many visitors from overseas, including people from Wal-Mart, Metro Group, Marks & Spencer, and so on. I feel that others haven’t fully explored the elaborate services like ours yet – so that’s interesting!
I’m glad that the company is exploring a way to use RFID for the benefit of both customers and the company with minimum privacy risks. The tags are removed when shoes or jeans are sold (and then reused.) RFID tags are used to identify sales items rather than people, and the system is more about disclosing the company’s information (e.g., stock levels) to customers than collecting customers’ information. There seem to be increasing concerns about personal privacy in the Japanese society. But as far as I know there weren’t any significant concerns about this kind of RFID uses yet.