article

It’s in the Bag



KA-CHING!

THE SWEET SOUND of a sale ringing up is the heart of the business for any retailer. Wireless dealers can help merchandisers hear that sound more often and save money at the same time through applications that address customer behavior, PoS, inventory and supply-chain needs, and more.

The retail vertical is full of promising growth and opportunity for telecom vendors and providers, says Allyn Hall, an analyst at research firm In-Stat. Major drivers, such as broadband availability and the utilization of wireless for a multitude of retail applications, are opening many doors for the telecom community.

At its heart, the retail vertical is a hypercompetitive environment fraught with thinning margins (think of it as the Wal-Mart factor) and a resulting need to push productivity and flexibility. Retailers also need differentiation and winning marketing strategies, whether through promotions, unique products or customer service.

The new, rugged Symbol MC70 mobile computer, which operates on Cingulars network, is ideal for such applications as mobile point-of-sale, direct store delivery and fleet management.

The economy also can be challenging. Inflation is in effect and that also has an affect on consumer behavior, and were coming out of a recession, notes Debbie Terwilliger, senior marketing manager for Cingular Wireless business markets group. Its a tough business. Thus, stores are interested in carrying out business very cost-effectively, she adds. For instance, a food and beverage company may want to build a wireless bridge with a retail outlet to make sure those goods flow to market in a rational way, avoiding the brown banana effect overstocked perishable items are a drain on everyones revenue. It requires the back-and-forth exchange of info between the route salesperson, the delivery driver and the merchandiser, says Terwilliger. Thats a requirement mobility can satisfy.

Wireless also helps decrease the cost of changing store layouts. Product and promotional placement is the key to the subtle in-store marketing strategy retailers use. For instance, the check-out line is where the low-dollar impulse purchases reside, while big sellers, like the meat counter at a grocery store, are always sure to be located as far back in the store as possible, so as to wind the consumer past several other products that likely need the exposure. End-caps on the aisles meanwhile showcase promotional items. Depending on whats in stock and whats hot, stores remap their layout fairly often, and having a lot of wired equipment makes that difficult, particularly if a retailer has coupon machines, electronic kiosks or register islands, says Michael Fitts, president and CEO of application provider TouchMedia.

Sprint is enabling the Treo 700p with flexible connectivity options like phone-as-modem that takes advantage of the devices capability to be used with a laptop to provide high-speed data access.

Wireless applications also can streamline business processes. Examples include proof-of-delivery applications, inventory management via RFID and the cellular WAN, and fleet applications to make sure the shelves are stocked when they need to be. Some suppliers have transportation fleets and want to use GPS for location-based services to track their trucks, says Lou Granberry, director of industry business solutions at Sprint. They want to make sure the trucks are on course, and also want to use telemetry to alert central dispatch if there are any issues, like a fridge not working. Retail is getting closer to the manufacturing vertical in terms of processes, trying to move to more of a just-intime delivery model. This requires communications back to the supplier via their own distribution center or others.

Barcode scanning via a handheld device, and even wireless price guns that automatically download pricing information, also are part of the opex reduction picture. Another application is wireless sales force automation, which ensures accurate pricing and promotional information is available to roving salespeople. Retailers may have mobile workers that are inspecting or stocking, so voice is a play as well. A furniture store may want its salespeople to stay with a customer out on the show floor, and will enable them to check delivery schedules and take orders from a handheld device, says Kevin Price, president and CEO at AccuCode Inc., a VAR/systems integrator that provides various wireless and wired applications to retailers such as Kroger and Sports Authority.

Another example, he says, is combining video and VoIP with location tracking to enable the manager to check in on any salesperson at any time.

Margins are squeezed, so they want to maximize peoples productivity inside the store, says Butch Musselman, vice president of industry business solutions at Sprint. A manager can view a surveillance camera from a mobile device and pinpoint an employee, and doesnt even have to be on-premises.

Real-time location services also can be employed in promotional pushes. A customer with a cart-mounted mobile computer enables the retailer to push out relational content depending on which aisle the customer is in, for instance. A video screen that enables shoppers to print coupons or interactively learn about a product provides feedback and metrics on behavior before they leave the store, enabling the retailer to flexibly tailor its customer service or offer customized promotions. Stores also can gather feedback data and react more quickly, and replace poor sellers faster.

New applications are on the horizon, says Musselman. Mobile commerce, where a cell phone becomes a purchasing mechanism, will drive much of it. And eventually you may walk in, and via RFID the store knows you, and the database says the customer usually buys x bath tissue, then gives the individual a download of data thats relevant.


Click to Enlarge

While these may smack of Big Brother, high-bandwidth growth is making more multimedia applications available, too. TouchMedia, for instance, focuses on entertainment resellers, like music and video stores, including Tower Records. It provides wireless digital media stations that allow consumers to scan a CD, for instance, to receive a plethora of information. The company offers Wi-Fi-enabled standalone kiosks, along with smaller wall-mountable touch-screens and form factors that can be built into existing fixtures. The applications also can run on already installed hardware. Cellular compatibility is on the road map.

The stations will give users a list of songs and the musicians playing on them, along with the ability to listen to the songs, a list of other albums by the artist, side projects for all band members, music videos and other affinity information. And, shoppers can special-order any out-of-stock CD via the terminal. This increases the pull through on the product, says Fitts. People are 8 percent to 15 percent more likely to buy music when they can hear it first. Plus its a foot-traffic builder, and once you pull the customer to the device, you can sell advertising on it thats the long tail.

While applications are high-value and gaining interest from stores, the primary reason for connectivity remains the enablement of credit card transactions. If a wayward backhoe cuts a line or Mother Nature is in a bad mood, the ability to send and receive Visa, Mastercard and other credit facility information vanishes along with the days profits. Thus, Sprint Nextel Corp. and Cingular Wireless, which work with a number of VARs and dealers, both offer a mobile WAN connectivity service for wireless backup to the retailers wireline data feed.

Two years ago when Florida got hit hard by hurricanes, a major retail chain was trialing this and when all the other retail systems were knocked out, they were able to keep doing pointof- sale transactions, says Cingular spokesperson John Kampfe. Thats a big differentiator when these disasters happen.

Its also a customer service issue when a customer spends 45 minutes shopping, only to find that the credit card machines are down, frustration is inevitable. And customer dissatisfaction is something most retailers cant afford.


TouchMedias wireless kiosks give entertainment retail shoppers all the information at their fingertips.

Meanwhile, the confluence of wireless technology will spur more innovation for the sector. Sprint is in the process of determining its RFID strategy, for instance. Also, Wi-Fi is widely deployed in stores, and may contribute to converged fixed-mobile applications.

Making it easier for retailers to vet and implement wireless applications is considered a top priority for communications companies, many of which are turning to the channel.

TouchMedia for one will be looking for feet on the street to help it get the word out. We are certainly starting to look at channel marketing opportunities as we scale up, particularly since our next target is big box and mall stores, says Fitts.

Authorized dealers need to understand the business and the pain points, says Musselman. Retailers want to improve the customer experience, and distributors should keep that in mind, he says. Look at the project plan and engage well, and clearly define the requirements. Carriers often can help them engage.

For instance, one of the biggest challenges for chain outfits opening new stores is getting access to the corporate network to be able to launch the store and access inventory and other applications. Thus, Sprint Nextel offers a store in a box launch kit built around its high-speed EV-DO network.

Similarly, Cingular is supporting franchise models and home service companies (think door-to-door or friends-and-family businesses) through e-commerce. It works with the business to build standard solutions for mobile PoS, e-mail and other applications, then makes them available for purchase by the franchise owners.

Links
AccuCode Inc. www.accucode.com
Cingular Wireless www.cingular.com
In-Stat www.in-stat.com
Sprint Nextel Corp. www.sprintnextel.com
TouchMedia www.touchmedia.com

Leave a comment

Your email address will not be published. Required fields are marked *

The ID is: 70871