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Juliana Miller Krzysztof Prugar 2008-04-10

Topic Technology Advances in Marketing Tools

Introduction New advances in technology called RFID and biometrics has created new tools for marketers and retailers to better target consumers specifically based on their "profile". Among other things, a profile includes the person's tastes, styles, class, and preferences. The idea behind RFID chips is to physically tag each product in a retailer’s inventory. These chips are micro-transmitters and can be scanned at a distance potentially replacing the barcode system. Traditionally, as inventory arrived in crates and pallets to a retailer, each individual item needs to be scanned. With RFID, however, entire pallets can be scanned recording the quantity instantaneously. When consumers buy the product at the register, it is scanned again and deducted from the retailer’s inventory, which notifies the supplier to prepare another shipment. In addition to refining the "just in time" process, retailers can track the trends and behaviors in consumption and quantify the relationships. Walmart has been a large proponent of RFID but is disappointed the technology is not being adopted more readily. They've recently increased the pressure on their suppliers to adopt tagging of their products by charging a $2 fee for each pallet that doesn't include the chips (Techweb 2008). Another application for products that are tagged is to develop a market for "smart appliances" such as a refrigerator or rubbish-bin that lets you know when your down to the last soda can (McGoldrick and Barton 2). This way you'll never

forget to buy more the next time you go shopping. Market researchers are also using RFID chips to collect information on patterns in consumer behavior. In one study conducted, a team developed an "intelligent" magazine in an attempt to observe the reading behavior of people in a waiting room. Each page was tagged and could track when it was turned or how long it took before a page was turned (Riley 2). In addition to RFID, marketers and retailers are looking towards biometrics to build a larger profile on consumers by using fingerprints, retinal scans, and facial recognition systems. TiVo and Microsoft filed patents for a TV remote that scans the thumbprint of the user and identify the member of the household who is currently watching (Spangler). Similar to that, Comcast has leaked its intentions to develop facial recognition software included in the TV or cable box which recognizes the person or people in the living room and react base on their preferences. According to Gerard Kunkel, Comcast’s senior VP of user experience, "this type of monitoring is the “holy grail” because it could help serve up specifically tailored ads" (Albrecht). Others are experimenting with a newly developed biometric mouse and keyboard, which scan the user's fingerprint. The prints are used to associate online and offline computer activity to a specific individual (Pons 4). Everything you do during your daily routine, whether watching TV, surfing the net, or purchasing groceries would be tracked and recorded. The next time you log-off your computer and turn on the television to watch your favorite shows, you could see an advertisement for the items you had just recently browsed for online.

Analysis Some of the challenges proponents of RFID and biometric face are resistance from consumers and vendors alike. The main source of hesitation is for concern over privacy issues but are ensured that anonymity between the consumer and the marketers would be preserved. Also, these technologies' supporters attempt to entice vendors by stating it will help create a competitive advantage and a more efficient target marketing campaign. Depending on the particular application, some firms could greatly influence the consumers decision process capitalizing off both impulse and routine shopping behaviors.

Lessons and Conclusions Although the talk seems to advocate the technology's advantages, it’s worth briefly discussing the alternative implications. There is a natural conflict of interests between the marketers or vendors, and the consumer. Its not the desire of an individual person to feel 'targeted' at every place they go whether inside or outside their home. Personalized advertisements might reduce the tension, but the ubiquity still feels intrusive. Trust is a major factor as well. These technologies record extremely sensitive information that is still perceived as an invasion of privacy. Marketers and retail outlets are not the only ones deploying RFID and biometric technologies. Federal government agencies are employing private contractors to compile biometric databases that contain retinal, facial, print, and DNA samples in addition to passing legislation in an attempt to outfit every citizen with an RFID chip through the RealID Act. Increased executive orders have granted federal agencies more authority in violating an individual’s privacy directly or through a subpoena in which a company is forced to comply and release private information. With a

rapidly growing surveillance society, it’s becoming more difficult to go in public without being photographed. Although government agencies have majority of public spaces surveilled, the corporation's products and policies serve as the next logical stepping stone in removing this last semblance of privacy and peace.

Works Cited "Biometric Marketing: Targeting the Online Consumer." Communications of the ACM

49.8 (2006): 61-5. <http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=21638982&site =bsi-live>. McGoldrick, Peter J., and Peter M. Barton. "High-Tech Ways to Keep Cupboards Full." Harvard business review 85.3 (2007): 21-2. <http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=23925561&site =bsi-live>. Riley, Katie. "Waiting Room Readership Measurement using RFID to be Tested." Circulation Management 23.1 (2008): 9-10. <http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=28683063&site =bsi-live>. "Wal - Mart Gets Tough on RFID." Techweb January 19 2008. Albrecht, Chris. "Comcast Cameras to Start Watching You?". NewTeeVee. 18 March 2008. 6 April 2008 <http://newteevee.com/2008/03/18/comcast-cameras-to-startwatching-you/> Spangler, Todd. "Microsoft's TV Ads That Watch You". MultiChannel News. 3 August 2007. 06 April 2008 <http://www.multichannel.com/blog/100000410/post/860012686.html>