- How the Solution Works in Stores
- Connected Solution for EAS and POS
- Connected Closets with Bluetooth Speakers
Technology startup Nexite has been offering a solution that leverages passive Bluetooth Low Energy (BLE) to provide the real-time location of apparel, shoes and accessories for fashion retailers. The system, which the company calls Connected Merchandise, has been in use for approximately six months. It consists of tags on every apparel item, readers to capture tag transmissions throughout stores via Bluetooth, and cloud-based software to manage the collected data.
Anat Shakedd
Several companies are currently using the solution to better understand shopper behavior in stores so they can manage how products are stocked, promoted and displayed, and to thereby increase sales. In the long run, the technology will be expanded to provide electronic article surveillance, (EAS), point of sale (POS) and consumer engagement, in the form of a “connected closet,” when buyers take garments home.
Founded three years ago, Nexite has since raised $100 million, and multiple retailers are now using its solution for in-store visibility, according to Anat Shakedd, Nexite’s CEO and cofounder. “We solve our customers’ biggest pain point: a lack of real-time data,” she explains. The company provides its power-harvesting, battery-free BLE chip and label, which can be attached to or sewn onto apparel.
Nexite makes the readers that interrogate those tags, providing the energy that the tags harvest to send a response at a distance of up to 10 meters (30 feet) in real-world settings. The readers are typically installed at retailer sites in the ceiling, and they interrogate tags approximately every two minutes, while cloud-based software manages the collected data and provides dashboard alerts, analytics and actions based on machine learning.
How the Solution Works in Stores
Nexite was launched by Anat Shakedd and her husband and cofounder, Lior Shakedd, who has a background in technology and is now the company’s CTO. Anat Shakedd has been an account manager and brand manager at Israel’s largest retail companies, she says, where she provided business strategy. The couple conceived of the solution leveraging his experience in radio technology, to offer a relatively low-cost technology to deliver inventory visibility and customer journey analytics.
The first version of the solution has been deployed across Europe, the United States and Israel, Anat Shakedd says, including global retailers of luxury brand apparel. Some have been using it for six months, while others started within the last month. The Connected Merchandise solution is provided as an end-to-end system by which Nexite tags are applied at the factory. The tags can then be traced anywhere that readers are deployed, such as at distribution centers and stores.
In most cases, the tags are being read in-store, and the value is not only in viewing onsite inventory levels, but also understanding how shoppers perceive products. “The most interesting aspect is being able to understand what you need to do to increase your sales,” Shakedd says. Without real-time location technology, she adds, “They know what products are selling, but that’s the only thing that they know.” The solution is intended to track where goods are being displayed in stores, when garments are picked up from a rack or shelf, when they are taken to fitting rooms and when they are purchased.
For instance, interrogating a tagged product every two minutes provides data regarding whether it is on display in the front or back of a store, when a shopper picks it up and ultimately how long it takes to sell. Based on that data, stores can track whether specific apparel in a particular display area is being handled by shoppers, how often the clothes are being tried on and if those fitting sessions lead to sales. Retailers can then better display and price goods in particular stores, and in specific parts of the stores where they will be of most interest. In this way, the solution is intended to help retailers understand why something is not selling enough and what they need to do to increase sales.
Connected Customer Solution for EAS and POS
The next use case, aimed at release during the second quarter of 2023, is expected to take the application a step further to enable security and purchasing. Those employing the solution will typically use the sewn-in labels so that tags are not removed from garments, which makes them undetectable by readers or Bluetooth devices. If customers don’t want to wait in line to purchase a product, they could use their smartphone’s built-in Bluetooth connection to engage with the label. They would read the tag with their phone, confirm the product they are purchasing, and then use Apple Pay or Google Pay to complete the transaction.
Store associates could use a tablet in the same way to help a customer during checkout. The tag would not need to be removed—the purchase could simply update the product’s status as sold in the software. As the shopper leaves the store, a reader at the doorway would interrogate the BLE tag, and the software would thus confirm whether the product was purchased. If not, an alarm would sound. If it was, the user could simply leave. In addition, retailers could offer payments via their own app, using Nexite’s software development kit.
If someone were to return an item, an employee could place it in a designated area where the tag would then be turned back on by a reader. In 2023 or 2024, a third application will be offered that will provide consumer engagement long after customers leave the store with their purchases. Shoppers would opt into the system at the point of sale, enabling them to leave with their newly purchased products without store associates having to remove the Nexite tags. The tags are essentially turned off at the point of sale, but they could be reactivated by consumers, with the privacy settings they choose to activate.
Connected Closets with Bluetooth Speakers
The connected-closet solution will leverage an app from Nexite on a customer’s phone, using a BLE-based smart speaker in their home, such as Amazon Alexa or Google Home. Users would read tags via their mobile phone to create a virtual closet of the tagged clothing in their home. The system would know which products were in the closet, as well as when they were removed to be worn or washed, and it would thus make recommendations accordingly. For instance, if a person wore a shirt listed in the app, the BLE device would cease to read that tag and would know it was in use.
To attain benefits from this feature, Shakedd estimates that individuals would need to have at least 40 percent of their closet’s clothing tagged. The application, she predicts, will become more popular once a larger number of brands and retailers are using the labels. In the future, individuals could purchase a reader to build into their closet. “Eventually,” she states, “we will have readers in the washing machine,” which will confirm that an item has been laundered before it is recommended for reuse.
Nexite’s technology is unique among BLE and RFID solutions, the company reports, because of its real-time functionality without requiring a tag battery, and because of its long-range capability. “Our main differentiator is the battery-free tag and the operating range,” Shakedd explains. “You can read it for 5 to 7 meters [16.4 to 30 feet], so you place readers in the ceiling where no one can see them, and everything is being captured automatically.”
The company has multiple patents pending in the United States for its energy-management technology, which enables the tag to operate with very little energy, Shakedd says. Initially, for a store seeking real-time data about its products, the total cost of ownership at the point of full rollout, consisting of readers and a monthly subscription, would be approximately $4,000 for a space measuring 1,000 square meters (10,760 square feet). This infrastructure cost is considerably less than traditional RFID and EAS, she notes, and the tags are designed to be relatively low in cost—about $0.22 to $0.25 per item—while large-volume orders could bring the price down further.
In the long term, the company may opt to offer what it terms “endless aisles,” in which shoppers could purchase products in a store even when it was closed, by viewing those goods through the window. They could use their phone to scan product tags from outside, and the transaction could be processed so the products could then be shipped to the shopper’s home or hotel, or be prepared for pickup. Nexite plans to host a product launch event in Israel on Jan. 25, 2023, with one of its retailer customers to display and demonstrate all the solutions.
Key Takeaways:
- Nexite’s passive BLE tags offer a real-time view into tagged goods as they move around a store, to help retailers better understand shopper behaviors.
- The next applications for the technology will provide electronic article surveillance and purchasing with a smartphone, followed by a smart closet app to be used in consumers’ homes.