Store gives a dazzling glimpse of the future

Monday, October 28, 2002

NEW YORK -- The most striking thing about the new Prada store in Manhattan's SoHo neighborhood isn't the round glass elevator or the sloping wood floor that displays $500 shoes.

Nor is it the see-through raincoats in cages or the clear dressing room doors, made of liquid crystal panels that darken for privacy when shoppers step inside.

The real magic in the fashion house's 17,000-square-foot store is the technology behind the scenes -- innovations that other retailers are also looking to adopt.

Using a technology called radio frequency identification that embeds data in clothing tags, Prada sales associates armed with handheld computers can find out a lot on the spot. What sizes of that blouse are still in stock? What materials are in it?

Prada shoppers eventually will be able to create "virtual closets" and store information about what they tried on and bought in password-protected Internet accounts. They will also be able to opt for customer cards that detail past purchases and contain notes sales associates may have made on their preferences. Such cards would be readable either by associates' handhelds or at cash registers.

Although designed to improve the shopping experience and make stores more efficient, such technologies also carry risks for consumers concerned about privacy unless merchants set clear policies on the sharing of customer information.

Using 'smart tags'

The Prada store in SoHo, which opened nearly a year ago, is the first of a string of so-called "epicenters" the Italian fashion company plans, with Tokyo and Los Angeles stores scheduled to open next year.

Prada's use of "smart tags" on the sales floor -- other retailers use them to track merchandise in warehouses -- puts it at the forefront of a movement among merchants to expand their use of technology.

Internet kiosks in some Barnes & Noble Inc. and Gap Inc. stores enable shoppers to research products or order merchandise not on the premises. And Nordstrom Inc. is experimenting with storing customer information.

At least one other major retailer is trying out a different sort of tech tool.

Vocera Communications Systems is testing WiFi wireless technology at a Target store in Rogers, Minn. It bundles the functions of a walkie-talkie, phone and pager into a 1.6-ounce badge. Store associates wear them around their necks and operate them handsfree with voice commands.

In the Prada store's dressing rooms, customers can hang clothes in one lucite box and accessories, like handbags and belts, in another. An image is captured from their radio-frequency tags and projected on a plasma screen beside the closet in the dressing room.

By pushing buttons on the screens, customers can mix and match outfits, and find out more details about the clothing.

When a reporter wanted to try on a $540 tapered wool jacket recently, the sales associate took her to a dressing room and deftly showed her how to get information about the garment's fabric and other details by pressing buttons on the screen.

Screens in dressing rooms will eventually be linked to the Web, enabling consumers to create "virtual closets." Just when such features will be available Prada spokeswoman Katherine Ross wouldn't say.

Cool but intimidating

Integrating the technology at the Prada SoHo store hasn't always been easy.

As recently as July, sales associates still had trouble with the wireless tag scanners. And many shoppers interviewed during a recent visit were unaware of the radio frequency identification technology -- and how it works.

Eric Wong, 24, of New York, said that although he was impressed with the store's high-tech features he has a "better shopping experience" at Barney's, which carries Prada and has a more intimate feel.

"Overall, it seems that the technology wasn't used to enhance the consumer experience, but help the sales people on the floor," said Mitch Kates, a principal with Kurt Salmon Associates, a retail consulting firm. "The technology is cool, but it can also be intimidating."

One loyal Prada shopper, Shawn Rubino of Rye, N.Y., was concerned about the potential "invasion of privacy" from some of Prada's high-tech plans.

Ross, the company spokeswoman, said Prada has no plans to share any information with outside parties.

How Prada uses its technology to learn more about its customers remains key, said analyst Kate Delhagen of Forrester Research. While other companies store information on line, at Prada "store clerks will have access to it," she noted.

Could be a turnoff

Nordstrom has moved into similar territory by teaming up with Blue Martini Software Inc. to roll out customer relations software in its stores. The intention is to help sales representatives better track customers' purchases and tastes.

While the software is expected to make sales associates more efficient, the larger potential for Nordstrom is in cross-selling -- pushing sales of related items, like hosiery with shoes.

That could be a big turnoff to customers who don't want clerks to know too much about them.

"You set yourself up for more sales people to pitch you products," said Richard Smith, an Internet privacy consultant. "And if they see you spending a lot of money, they'll be hovering more."

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