Global Observer

With NFC technology, shop in Spain with a single tap

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BARCELONA -- The Spanish government is funding technology start-ups that use near-field communications tech to improve shoppers' experience through smartphones.

BARCELONA -- Imagine finding product reviews and adding your own voice with a single tap. You may not have heard of near-field communications technology, nor realized if it's already on your phone, but the Spanish government is investing in it. In one of its many efforts to prevent crisis-enduced brain drain, the Ministry of Industry has given an interest-free loan to start-up BCNTouch to research, develop and market the newest, quickest and easiest way to connect.

NFC--nothing to do with American football--was a standard set in 2004 by Nokia, Sony and Phillips, designed to communicate to and between electronic devices easily and securely. Essentially, it's the newest version of the Q-R Code. Information is passed phone-to-phone or from a chip housed inside a product to the phone, all by a light tap.

"The user experience is easier in the NFC because you don't even need a ticket (or a camera) and you just have to touch it," says Gloria Lozano, co-founder of BCNTouch and their TouchActive mobile web platform, which uses the NFC technology while shopping.

A small tags with an antennae and microchip is encased in silicon and stuck to a product or poster, underneath the not-so-well-recognized-yet, one-centimeter "N" symbol pictured here. The phone needs to be within five centimeters (or two inches) for proper recognition.

Lozano and co-founder/CTO Andrew Mackenzie saw great potential in making an application to connect shopping using the NFC technology. "Typing is uncomfortable. You don't want to be browsing. You want quick and easy," she says. "For Q-R code, you need to have a good camera and good conditions of lighting and so on, otherwise you don't capture properly."

"On one side, we have the consumers and what we provide the consumers with is to capture the objects while you are on the move. This is good for consumers because they are showing interest in one product and good for the brand because they are making contact with the consumers who are (truly) interested in the product," Lozano says.

BCNTouch is targeting the "critical mass of users (that would) be interested in the technology--digital shoppers, digital consumers who want to have access to relevant information." Lozano says, "Our target customers are retail brands that sell added-value products that the brand wants to establish a dialogue with the brand. Not luxury, but  brands that consumers want to interact with them." Lozano gave the examples of sneakers, clothes, sports gear and electronics, all of which are hot topics on social networks and are "things people want a conversation (about) before buying." She speaks of how there is an incentive to share these sorts of things because people in general, and especially social networkers, like to be recognized as experts on certain topics. NFC technology just makes this even easier.

"We want brands to learn from the users. If one user doesn't like something, the brand can listen to it because, if you can solve a customer complaint, they will be more loyal than before," Lozano says. The brand gains the added-value of creating "Super Fans" of their brands.

Q-R codes have just started popping up all over Spain in the last few months, from bus stops to giant billboards in Madrid's Puerta del Sol to bottles of Mahau beer. Q-R codes are used all over the recently revamped pages of two of the three free metro newspapers, "Que!" and "ADNPlus" to promote enhanced content, like video interviews. It may take awhile for the Spanish to adjust to the next big tech thing.

Lozano is sure the NFC will become popular because it is much more secure. "I can print a Q-R code on my printer." She thinks that, since it's encased in silicon, it would be very challenging to reproduce an NFC tag, but made it clear that she believes it's "not impossible because hackers are very clever."

Europe is particularly focused on combatting problems with counterfeit designer and luxury brands. These NFC tags would be a better solution to track something like an expensive handbag from shipping to supply to the store to the owner, while verifying its true, individual validity.

Lozano explains that Q-R codes are certainly a cheaper option that could be entirely free, while the NFC tags cost a minimum of 30 cents each, per tracked product. "For a bottle of water, today, it's not worth it for a FNC tag," she says. "For a coat it makes complete sense." One suggested use it to know the instructions for care at any time, like in like at the dry cleaners, quickly.

For a store or brand that really wants to avoid the extra cost, but still get the in-the-moment feedback, BCNTouch suggests simply putting up a poster with the NFC codes for each individual product type, not each individual sale.

One in ten SmartPhones, or 40 million, bought in 2011 were equipped with NFC technology, with Nokia and Blackberry premiering the NFC-ability in the last quarter. It is expected that 200 million NFC-enabled phones will be sold this year.

However, she doesn't expect that there is enough awareness of the technology in order to sell the brand yet. "In fact, the users have these phone in their pockets, but don't even know it," she says. "We are expecting in the next few months that it will be a boom." The marketing they are doing now, including at the Mobile Phone Fair, is focused on making the public aware of the technology--to create a buzz of interest surrounding NFC.

According to the NFC wiki, Germany, Austria and Latvia have tested it in their public transportation, while China is using it widely for their buses. Google Wallet was the first big user of NFCs for mobile payments, integrating with American store credit cards like CVS Pharmacy, Toys-R-Us and Best Buy.

If you are wondering if you have NFC on your iOS, you don't yet. "The day that Apple decides to put the NFC inside the phones, it will mean the market will fully accept it," Lozano says. It is a day she eagerly anticipates. "Apple will launch when they have a clear business model for it. I cross my fingers that this will be the year" because she is sure it is not If, but When.

For next week's international mobile phone conference in Barcelona, BCNTouch is holding a treasure hunt for Bodegas Torres wine company. Stands will be all over the fair with NFC-tagged wine bottles. It's an easy marketing idea because, claro que si, the Spanish will be motivated to try out the new technology in order to win a free bottle of vino. The bodega will benefit because they will receive a detailed map of when each anonymous consumer took a step further to research what they were tapping and if they posted about it on social networks like FourSquare or Facebook.

"It's a very simple campaign but it shows the potential that the technology has," Lozano says. "Imagine you have a glass of wine you like, but the next day, you can't remember (the brand.) And we all want to share good wine with our friends."

BCNTouch's funding is a product of Spain trying to prevent the brain drain caused by the economic crisis. "Spain is not in such a good way right now and we are not very well-seen abroad. In fact, there is a big effort to put into effect technology and to attract talent," Lozano said. Their five-person start-up receives funding from NEOTEC, the Spanish Ministry of Industry's zero-interest loan program to promote research and development within the Spanish borders. The strict committee provides funding for applicable start-ups for their first two years. The committee watches every step in the progress, helping the start-ups to create markers and milestones along the way. When the start-up begins making a profit, they then pay back the loan without interest.

With at least 23 percent of the population unemployed, much of the Spanish, along with its large immigrant population, is searching off the Iberian Peninsula for jobs. Spain is suffering from techno-brain drain and the NEOTEC is just one more step to avoid it.

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Jennifer Riggins

Correspondent (Barcelona)

Jennifer Riggins is the content manager and community builder for two SaaS Quote Roller and PandaDoc, as well as she teaches sales, English, and public speaking for Spanish small business. She holds a degree from William Paterson University. She is based in Spain. Follow her on Twitter. Disclosure