ShelfX brings NFC & RFID to retailer shelves for frictionless shopping

ShelfX brings NFC & RFID to retailer shelves for frictionless shopping

ShelfX is set to change the way we shop for goods for the better using NFC and RFID. Ever since NFC payments have been in the realm of possibility people have spoken about how NFC could work for consumers. Aside from pure NFC payments, ShelfX now joins developments like Narian’s suite of NFC retail services as must-have upgrades for retailers. We caught up with the CEO of ShelfX, Ran Margalit, for a deeper look into what the firm had planned and under development and how it blends NFC and RFID for retail services.

Before we tell you about ShelfX we want to give you a little background on the CEO of the startup company. Ran is a problem solver. When he first moved to the US from Israel, he couldn’t find pita bread in his local area. So, he learned how to make it. When he saw problems with medical systems, he used his software background to create apps to fix those problems. When he was at a grocery store with his wife, who needed to pick up balloons, he saw his neighbor and watched how he had to go through a three step process to purchase some ice cream. And he came up with ShelfX.

Ran’s background is in programming, and as we mentioned, finding solutions to problems. He has coded in C, Java, Cocoa Touch and Ruby on Rails to name a few. So, the concept of a server side platform and connected NFC / RFID tags wasn’t a stretch for him to imagine. The actual implementation and capabilities of the ShelfX product isn’t simple or half baked. From what NFC Rumors learned, it is sophisticated and very well thought out and here’s why.

ShelfX smart POS on the shelf that uses NFC & RFID for purchasing, inventory management, cost containment and more

Checkout lines are so passé and so is unloading your groceries from a cart to have them scanned to then turn around and load them backup again. NFC is set to change that and ShelfX makes this old concept a thing of the past by enabling the store shelf from where you pick up a product your shopping cart and payment vehicle. The system works by having RFID and NFC tags connected to a back end server via 2.4GHz transmitters. Each ShelfX active RFID / NFC tag boosts the signal of the next tag until it reaches the server.

When a consumer picks up a product from the shelf and presents their ShelfX card to the shelf the system allows the consumer to simply leave with that product and hits their credit card for the amount due. So, you don’t need an NFC phone today to use the system, although full NFC phone support and apps will be available, too. Margalit confirmed that NFC Android and iOS apps were in development. If you don’t swipe your card, the server senses that you have picked up a product without giving your credentials and alerts security. The card works at a range between 12cm and 20cm and an NFC phone will work at the standard 4-8cm range with the normal NFC 13.56 MHz frequency.

ShelfX NFC / RFID video

“ShelfX will revolutionize the way we shop, and it’s about time,” said Margalit. “But in the same respect, we are taking the shopper back to a time when shopping was simple. The customer walked into a store, was greeted by name, told about the specials, paid without hassle and left. The twenty-first century store clerk’s name is ShelfX. It’s making shopping simple, but does so much more.”

So the system allows you to pick an item off the shelf and walk out without even going near a cashier, and at the same time acts as a theft deterrent. But that is just the start of ShelfX’s capabilities. Ran Margalit said in development, the firm tried NFC bracelets but they didn’t give a great user experience so cards and NFC phones were chosen as the methods of choice. To be honest, who would want to wear a stores NFC rubber bracelet anyway? They are perfectly practical for festivals and one-day events but when it comes to doing your grocery shopping, there are more elegant NFC options available.

“We solved the problem of who took what,” Margalit told NFC Rumors.

ShelfX RFID and NFC tag system from the retailer’s perspective

The system is comprised of a small back end server that is hosted locally within a store and as many ShelfX tags as required for any size store. The system is independent of the internet and uses transmitters on a mesh network to communicate across the store. However, the server can be hooked up to the web and to ShelfX servers to add even more services but we’ll get to that in a little while. The system then also uses WiFi so that price changes, promotions and discounts can be changed from an iPad right on the shop floor. Margalit said that the biggest theft issues stores face is employee thefts, which can account for up to 60% of retail theft. The ShelfX system helps solve that problem.

Traditionally, a store knows what it takes in through its backdoors and it knows what goes through its registers. Everything in between is a mystery. The ShelfX system logs each product on to a shelf and knows who is stocking the shelf. It is aware of the amount of stock that is delivered to a store varies to what is actually put on the shelf. The smart ShelfX tags can also come with sensors that monitor temperature and humidity and can alert the server to changes in environment so if a retailer has a freezer or cooler break down they can save the stock while they get repairs done. That same tag can also measure how long consumers stand in front of products for and gives real time analytics from the server.

Each tag has an LCD screen that can provide offers, discounts, product information and alert consumers to promotions. When a consumer picks up an item and uses their card to purchase it, the system can also contextually offer a discount on a related product. For example, let’s say you pick up some pasta. The ShelfX system can then shoot you back a message that gives you a 25-cent discount on pasta sauce. Because you use the same card on NFC phone the system knows who you are and what you usually purchase so can contextually send you offers you actually find useful. So, no feminine products for men or men’s razors for women. Each shelf tag can also hold ads, too, for even more promotional usability.

The ShelfX system from a supplier’s perspective

From both the retailers’ and suppliers’ points of view, when a product runs out of stock on a shelf it becomes a lost sales opportunity. For years now, stock based ordering systems have been available at that count stock out as it goes through the register. However, the ShelfX system doesn’t require a store to have cashiers and so has the built in functionality to alert suppliers when stock is running low on the shelf so that it can be reordered.

The analytics are so strong with the ShelfX system that they can start to predict ordering before it happens to ensure off sales are a thing of the past. When the onsite server is connected to the ShelfX online platform, suppliers can have direct access to statistics about their products on shelves if retailers allow it.

ShelfX benefits to consumers using RFID cards or NFC phones

Ran Margalit made no bones about who he designed the ShelfX system for. Although the system can save retailers thousands and sometimes millions of dollars a year in cashiers wages and lost shop floor space to checkouts and conveyer belts it was the consumer the firm had in mind. Reinventing a process that has been in place for what is now hundreds of years need to provide a substantial benefit for all stakeholders including consumers and the ShelfX system does.

By removing the cashier process consumers save time. By enabling smart POS shelves, consumers can get more information on products and be offered discounts. By using NFC applications on phones, consumers can get and retain a permanent record of what they have purchased and how much they spent. The system also works for prepared foods with a ring system that ShelfX has developed as well as other formats like larger Walmart shelf systems with the same built in functionality. Margalit sees his system being deployed in sports arenas, pharmacies, airports, grocery stores, casinos and many more use cases.

Consumers can also log into the ShelfX website and control privacy settings with regards to the information they share about their purchasing with retailers and suppliers.

ShelfX NFC and RFID solutions will be available soon

The system will be available for purchase in May of 2012, Ran Margalit told NFC Rumors. The active website that is currently in development will be available within the next couple of months where suppliers, retailers and consumers will all be able to sign up and manage their respective portions of the ShelfX experience. We asked Margarit if Google Wallet and other NFC mobile wallets could be supported in the ShelfX system and he let us know that they could easily be incorporated.

NFC Rumors also learned that ShelfX has developed a whole API and SDK for their system, so third party developers and large retail in house developers could build on top of the system. He gave examples of apps that would only allow children to buy health food, or a diabetic that is warned when they pick up products with too many carbs. “We can’t build applications for every scenario,” Marglit said. ” We have build a full REST API so that we can create an ecosystem around ShelfX.

The API is sure to help this fascinating NFC product take off. The ability to interface with NFC mobile wallets like Visa’s upcoming offering and Google’s already available Google Wallet is sure to help the system take off. However, the plastic cards that retailers can use today make the ShelfX system usable today.

Margalit shared that he has one working unit right now and another 100 are currently being built as we spoke. The server side of the ShelfX system is complete and that the startup firm had enough capital to bring the system to market, which tells us it probably isn’t vaporware.

Marglit shared that he had meetings with Microsoft’s Retail Experience Department planned and a major shelving supplier to the retail industry. He shared that since his press release went out the response had been amazing with hundreds of interested parties contacting him about his product. We asked whether he was looking for investment and he said he was but strategic investment from a company that could help ShelfX scale up and perhaps help with deployment through pre-established relationships. To use the system seemed so robust that we think it could even be scooped up by a bigger entity before it gets to market because of its sheer capabilities and how likely it is to succeed in the marketplace where it currently has zero real competition. NFC is big news these days and it may catch the eye of people with big budgets like the NFC POS stakeholders.

NFC was always going to impact the retail industry in massive ways since it became a technology open to consumers. It is surprising to see such a fully integrated product this early in the development of NFC. What is certain is that ShelfX is a system that benefits all stakeholders using NFC and RFID and that we will watch and keep in contact with the innovative firm from here on out.