Magazine Article | January 1, 2005

Wireless, Mobility Are '05 Retail Priorities

Source: Innovative Retail Technologies

With automated POS firmly in place, retailers will cut wires and go mobile.

Integrated Solutions For Retailers, January 2005
Matt Pillar

VDC (Venture Development Corporation) recently conducted a survey of retailers on their technology buying plans to support the consulting company's upcoming 2004 retail automation study. The majority of respondents were specialty, grocery, and general merchandise retailers with fewer than 50 stores. It wasn't shocking that the market - even the small guys - has generally adopted automated POS systems. Seventy-five percent of the respondents indicated they're up to speed at the POS, while another 15.6% are planning to use or are evaluating the technology. So what's next for an industry that's well outfitted at the POS? To find out, I flipped straight to what I consider the most telling indicators of what will sell in 2005 - the statistics focusing on which technologies you're either evaluating or planning to implement.

The VDC study reveals that the next big step in retail is mobility, particularly at the POS. The study indicates that wireless networks are the third most sought after tech initiative by retailers, with 21.3% of respondents considering a WLAN (wireless LAN). Twenty-two percent of the market is evaluating mobile terminals or making plans to use them. And here's music to the ears of mobile device manufacturers - of those retailers already using mobile terminals, nearly 80% are going to be replacing their hardware in the next five years. Judging solely by the number of respondents who are planning to use or are evaluating mobile terminals, they are the second most important technology on retailers' minds this year.

The combination of store layout flexibility gained by mobile terminals and an elimination of the need to wire and rewire stores leads the rationale for their adoption, while labor cost savings is also cited as a primary driver. But before you jump on the mobile cash cart and begin an evaluation process of your own, consider the potential barriers to adoption identified by those hesitant to delve into mobility. While the business case for adoption might seem logical (more than 37% of respondents call labor/cost savings the primary driver of mobile technology adoption), pinning an exact ROI to a mobile terminal implementation is a bit more difficult. This, combined with the fact that the initial deployment cost of mobile terminals is considerably more than that of their stationary counterparts, makes their adoption a tough sell to the powers that be. The lesson here is to do your homework before pitching the project to the budget committee. Don't forget that mobility enables real-time applications. Tie a return to real-time data sharing, and you've just bolstered your business case for mobility.

Wireless Networks Ride Mobility's Coattails
That 21.3% of respondents are considering a WLAN comes as no surprise, as these are central to the optimization of mobile devices, and mobile POS is the application driving most (55%) wireless network purchases. While the wireless infrastructure necessary to create a WLAN can run as high as $20,000 per store for the latest bandwidth-intensive technologies, established solutions like 802.11b are considerably less expensive. They're also more than adequate for the transmission of data generated by bar code scanners and mobile terminals.

So, what's number one on the evaluating/planning to implement list represented by your peers? Whether it's the media's coverage of RFID (radio frequency identification) or Wal-Mart's technology trickle-down effect that's the cause, the technology that looms large on the horizon of tier-one retail appears to be on the minds of 23.4% of our survey sampling, as well. While only 2.4% are currently planning to use RFID, 21% report they are actively evaluating the technology.