The shopping experience of the future? RFID Tracking from Start to Finish

How Destiny would track shoppers at Carousel Center expansion THE POST-STANDARD, Syracuse, New York [Advance/Newhouse] - By Rick Moriarty - August 24, 2009 Syracuse, NY -- Hidden in a secret location deep inside the Carousel Center mall is what Destiny USA officials believe is the future of the retail industry. A 1,000-square-foot room with translucent flooring contains what appears to be a small clothing store with just two products -- T-shirts and cloth handbags with the words "Surrender the past" printed on them. But what makes the "store" unique isn't the see-through floor. It's the technology behind the walls, under the shelves and attached to each T-shirt and handbag. Through the use of a radio frequency identification system, the store can track what products a customer picks up, instantly send detailed information and customer reviews of those products to the shopper's iPhone, and make suggestions, via nearby computer screens, of other products that might interest the customer. The system even tracks customers as they walk through the store and displays on the computer screens items, in their size and preferred fabrics, that they might want to consider, based on their past shopping habits. At the self-checkout desk, the customer just drops merchandise on the desk and an antenna built into the desk picks up a radio signal from a sticker attached to each of the items and rings them up. There are no UPC symbols to scan. The customer swipes a credit card through a reader and the sale is complete. It's paperless, too. The system e-mails a receipt to the customer and records the purchase on the customer's account. Shoppers in this store cannot actually buy anything. It's set up just to give select visitors a demonstration of the technology behind Destiny's new retail concept, which it calls Arendi. Destiny partner Bruce Kenan said the model combines the convenience of Internet shopping -- the instant availability of detailed product information and comparisons from multiple manufacturers and user reviews -- with the ability to touch, smell and try a product. "This is a marriage of Internet and physical retail," said Kenan. "People are going to like it. They're going to demand it." Kenan and three executives from Terakeet Corp., the Syracuse company that is assembling the technology behind Arendi, gave a Post-Standard reporter and photographer a tour of the "store." The only condition was that the newspaper could not reveal where in the mall the room is located. Developer Robert Congel, the man behind Carousel's stalled expansion into Destiny USA, envisions the addition as a giant consumer research and development center where consumer shopping habits are tracked by a network of computers. The name Arendi is a play on the term "R&D," short for research and development. Retailers and brand makers who become part of the center would share all of the consumer insight data collected at Arendi -- in exchange for all of their profits. It's a concept that has never been tried before on a mall scale, and it has not been easy to sell the idea to a retail industry that saw sales fall 10.8 percent in the second quarter, compared with the same quarter last year. The secret "store" hidden inside Carousel Center was created to show off Arendi's technology to potential tenants. Destiny officials had planned to open a 50,000-square-foot version of Arendi to the public late this summer with a limited, undisclosed number of tenants who have agreed to be part of the demonstration. The hope was that the public demonstration would help the developer lure enough tenants to eventually fill the three-story, 1.3 million-square-foot mall expansion. Construction, which began in 2007, came to a halt in early June after Citigroup stopped advancing money on a $155 million loan to the project. The bank said it was concerned that the project was a year over schedule, at least $15 million over budget and had not a single signed lease. Congel is suing Citigroup, alleging it breached its loan agreement. The sudden halt to construction has not dimmed the development team's enthusiasm for Arendi, however. Kenan said it's amazing no one thought of combining e-commerce with stores in this way before. The goal of Arendi will be to give shoppers at the mall all of the things they like about online shopping -- primarily instant access to product information -- while they walk through a store, touching and feeling the merchandise, he said. And it will benefit retailers and product makers because they can personalize their in-store sales promotions to customers as they shop. The system also can help retailers keep instant track of when to reorder popular merchandise, he said. "One of the worst things for retailers is to run out of a product that is in demand," he said. Customers would have to register at an Arendi Web site, providing their name and e-mail address. If they'd like, they could also provide personal information such as age, clothing sizes and preferred fabrics. In return, they would be given customer ID tags, plastic cards about the size of credit cards. They would carry the cards with them when they go shopping at Arendi, just as they carry shoppers club cards to grocery stores. "Once you're registered, you can just walk around and shop as you normally would," said Ryan Garver, lead developer for Terakeet. In a demonstration of the technology, Garver walked with the card to a shelf full of T-shirts and a large computer screen in the middle. As he approached the shirts, the screen displayed a picture of one of the shirts, in his size. An antenna under the display read an electronic signal from his customer ID tag and called up information he provided about himself when he registered. If a group of customers approached a merchandise display, the system would know who they are and display information that it believed would be of interest to a majority of them, he said. To find out more about the merchandise in front of him, Garver glanced at his iPhone. Terakeet has written an application for the iPhone that will talk to Arendi's computer network through the Internet to provide customers with more detailed information about the products they are looking at. Garver said the company plans to write similar applications for other hand-held communications devices, too. If a store in Arendi did not have the size and color of the product a customer wants, it could be ordered from the interactive computer displays in the store or through the customer's iPhone or other Web-based communication devices, he said. Kenan said retailers will be able to use information collected at Arendi -- not just data collected in their own stores or display areas -- to improve the customer experience at all of their locations. "We'll have a knowledge base that no other retailer can get by themselves," he said. Staff writer Rick Moriarty can be reached at 470-3148 or rmoriarty@syracuse.com http://www.syracuse.com/news/index.ssf/2009/08/how_destiny_would_track_shoppe.html FAIR USE NOTICE: This blog contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of religious, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. 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