Why QR codes will thrive as NFC rises2013-03-18
For a few years, locations with Google Places listings received signs they could hang in their windows. The signs featured a QR code, which passersby could scan to get more information. In 2011, Google stopped printing the signs, noting that the company expected Near-Field Communication (NFC) to replace QR codes.
It’s a common enough theme, the idea that the QR code—widely chastised for a variety of perceived shortcomings—aren’t long for this world as the cooler and more versatile NFC chip makes its ascent. In a recent post summarizing technologies at SxSW, Altimeter Group’s Jeremiah Owyang wrote, “We found that QR code will quickly be disrupted by NFC. While we saw a few QR codes present for marketing giveaways, we don’t believe this will persist year over year.”
While NFC is a great technology, the idea that it is a QR code replacement is based on a misunderstanding of what it’s for and how it works. For an NFC-enabled device to interact with an RFID chip, it must be within about 20 centimeters of the chip itself. That’s less than eight inches.
A lot of the current NFC applications being developed by marketers are designed to read the chip and direct a browser to a mobile web property. Even the companies embedding RFID chips in business cards envision users tapping their phones to the cards in order to produce a video, a website or some other content. This use of NFC is known as an “info tag” or “smart tag.”
But the actual uses of NFC go far beyond a non-text URL. Google Wallet is a great example. I buy a pound of coffee at Peets Coffee and Tea here in the Bay Area, paying by simply tapping my phone to a device near the cash register. The chip connects Peets’ device to my account and transfers the funds, generating a receipt on my phone, all much faster than a cash, ATM or credit card transaction would take. Wallet isn’t the only financial tool that takes advantage of NFC. Citi, MasterCard and others are working with NFC to make financial transctions as simple as tapping your phone.
You’ll also be able to use NFC for fast admission to a hospital, keyless car entry and ignition, pairing multiple devices (that’s how the Samsung feature works that lets you transfer an image or music between two phones), start a print job from your phone, and scads more that transcend the simple function of the smart tag. There’s no doubt that the possibilities NFC enables are exciting.
The NFC smart tag as a URL replacement, though, is limited dramatically by proxi mity. While an NFC chip can conceivably be embedded in name tags at conferences, for any signage more than 8 inches from a phone, the functionality evaporates. Consider QR codes on the sides of buses, painted onto buildings or displayed on billboards? I’ve seen them on movie screens and garbage trucks. In none of these instances would I be able to tap my phone to the code.
When you’re close enough to use them, NFC can increase engagement. A Kraft Foods experiment with RFID chips in signage on shelves holding Kraft products found engagement levels 12 times higher than QR codes; to be sure, it’s easier to tap a phone than to launch a QR code scanning app and scan the code.
As with most technologies, the lowly QR code will adapt to the increasing presence of NFC chips and NFC-enabled phones, which still does not include the iPhone; Apple indicated its customers don’t want NFC and introduced Passport as the more desired feature of the iPhone 5. QR codes will continue to dominate until most phones accommodate NFC, which won’t happen any time soon. (Even some phones equipped with NFC don’t accommodate all tools. My new Galaxy Note 2 doesn’t work yet with Google Wallet.) Riding a wave of adoption (one in five Americans has scanned a QR code), they’ll continue to serve marketers hoping for connections from more than 8 inches away.
Distance aside, cost is an issue, too. One business card site is charging nearly 60 cents per card. While adding the chips to thousands of conference name tags is certainly feasible, printing QR codes is far less costly and equally effective. Marketers on a budget may be enticed by the ability to generate and print a QR code for nothing versus the cost of embedding chips in thousands of cards or other collateral. Research indicates QR codes are used mostly to supplement print, and the cost of adding chips to magazine ads, for example, will simply be prohibitive, even as costs fall.
And where does the RFID chip go in digital signage?
In the meantime, adoption of QR codes is rising, with one in five Americans reporting that they have scanned a code.
Most important to remember is the point of QR, which is simply a graphical, scannable URL. It’s easier to scan a code when you’re walking or in a car than it is to try to tap in a URL. Increasingly, phones come with QR scanners already installed, making it even more appealing to use. And QR codes are building momentum by simple virtue of their increasing ubiquity: QR codes are everywhere.
Ultimately, it’s not about which technology will win. It’s about which technology is most appropriate to use under various conditions. Nothing about the conditions for success with NFC suggest that it’s an across-the-board replacement for QR codes. The QR haters will just have to wait for something else.