In the first major deployment of its kind, France-based Store Electronic Systems said it plans to deploy millions of NFC tags in electronic shelf labels in several retail chains this year.

The NFC tags would be embedded in the shelf labels installed fronting products throughout the stores, enabling users to tap their NFC phones to view product information, such as allergens and nutritional facts, along with information on the product’s origins and manufacturing chain.

Consumers also could gain access to loyalty programs to earn points, view marketing content, share content and interact with brands on social media, said Store Electronic Systems, or SES, and NXP Semiconductors, the supplier of the chips for the tags.

“SES has understood that physical stores need a straight-forward way to provide more services before payment occurs,” Giancarlo Cutrignelli, senior global marketing manager for NFC at NXP, told NFC Times, adding that SES is “explicitly mentioning this is not only pilot, it’s a commercial deployment.

“There are customers behind already ordering,” he said. “The (tag) cost discussion is over.”

He declined to elaborate, but a spokeswoman for U.S.-based NFC tag supplier Identive, confirmed to NFC Times that this is the project the company referred to in April when it announced a 3 million-unit order of NFC Forum Type 2 tags for a retail application in France. Those tags are part of NXP’s NTAG line, and the first 800,000 were due to ship in the second quarter of 2013.

According to the announcement, the roll out goes beyond France, to eight chains in four countries. SES was not available immediately for comment.

The company has supplied conventional electronic shelf labels to such major France-based merchants as E.leclerc, Intermarché, Auchan, Monoprix and Carrefour, of France, along with such international merchants as Spar, Dansk and FairPrice.

Battery-powered electronic shelf labels mainly are used to display product prices usually using a mini-LCD or LED screen. Prices can be updated wirelessly. According to some reports, the electronic labels cost roughly $5 apiece.

UPDATE: SES marketing director Guillaume Portier noted that the company has already said it would deploy NFC-enabled electronic-shelf labels at seven E.Leclerc hypermarkets in France and has already equipped one store in suburban Paris with 47,000 labels embedded with NFC tags.

He declined to release details about the larger rollout of NFC-enabled shelf labels with other merchants, but noted that they have asked for the technology–SES is not providing it as a default feature in its labels.

“They see with NFC the opportunity for success for in-store digitalization, and we are ready to answer to their need,” Portier told NFC Times. 
“It (NFC) capitalizes on the large adoption by end-users of NFC smartphones. Using them as a (tag) reader, they give to brick-and-mortar stores the ability to connect personally and seamlessly with end-users within the stores.” END UPDATE.

The planned rollout follows the launch of a large trial last October by French retail chain Groupe Casino, which deployed 25,000 NFC tags in electronic shelf labels in a single supermarket in Paris.

The project, implemented by France-based Think&Go NFC and using electronic shelf labels from Sweden-based Pricer, worked with Casino’s mCasino mobile app.

The trial, which continues, allows users to tap the tags to get discounts, check information about product ingredients and add items to a digital “shopping basket,” then tap at the register to check out. The trial did not include payment, which would have required a payment application on an NFC-enabled SIM card in the phone.

While Casino has not yet expanded the trial, the planned rollout elsewhere by other chains in France and beyond, as announced by SES and NXP, “confirms a trend that we have seen over the last couple of years that retailers in general are looking to explore the potential of mobile, and NFC fits totally with their objectives,” Tim Baker, Think&Go’s director of marketing and communications, told NFC Times.

Besides being able to deliver more product information, potentially customized to the user, merchants could also deliver more offers. For example, consumers could download a store coupon from a merchant or product brand before the shopping trip. Then when they tap at the shelf, the coupon could be retrieved and placed in their shopping basket along with the product, Baker said.

Many of the services don’t require the phone to go online, since the product catalog could be downloaded to the app, which is synched regularly, he said.

The NFC tags for the shelf labels only store a product identifier, similar to or the same as the UPC code, just as 1D bar codes do.

Electronic shelf labels also carry printed 1D bar codes. So merchants can offer many of the same services as they could with NFC tags. Bar codes, which can be printed on the label or made part of the electronic message itself, are much cheaper than NFC tags, of course. 

But bar codes, especially 1D bar codes, take a lot longer to scan than tapping NFC phones, say NFC backers, 

“The advantage, NFC can open the application immediately, without fumbling with the phone and getting the service,” said NXP’s Cutrignelli. “It requires only one tap.”

QR codes on the labels could store more information, including URLs for the products, as NFC tags could, and would be cheaper than tags, but also would take longer to scan than tapping a phone.

NXP and tag producers that use its chips have declined to reveal prices for the tags, though the cost is said to be roughly €.20 (US$.26) apiece for the Casino project.

NXP introduced a new NFC tag line last fall, the NTAG21x, which it noted has a range of memory sizes available, including the low-cost NTAG210, with only 48 bytes of space. That is enough to store the product identifier code and perhaps text to automatically open the merchant’s app.

The tags used for the labels being rolled out by Store Electronic Systems are expected to use this lower-cost tag. Cutrignelli, however, declined to give a price range for this small tag. But the price for millions is likely lower than €.20 apiece.

UPDATE: But SES' Portier said that the extra cost of NFC chips only “weighs marginally” on the total cost of the electronic shelf labels, especially compared with the “wealth of new functionalities” the technology provides. END UPDATE.

Kiona Smith-Strickland contributed to this report.