Avoiding Potential Pitfalls in Retail Implementations
Avoiding Potential Pitfalls in Retail Implementations
By: Vernon Slack
Jan. 1, 2000 12:00 AM
Most executives already understand the benefits of going wireless. What they want to learn are the potential pitfalls surrounding a wireless implementation and how to avoid them.
The wireless world is expanding at a torrid pace as businesses and homes are becoming saturated with new wireless gadgets that marketers and analysts say will forever change the way people live, work, and play.The benefits of wireless networks and devices are innumerable, offering users increased mobility, flexible installation, and easy scalability. For the consumer, this means the ability to interact and obtain information anywhere at any time, while businesses reap increased productivity and reduced total cost of ownership.
The retail industry, specifically, is witnessing a wireless boom as retailers large and small are leveraging new handheld units that provide multiple store functions. Some can check inventory, verify prices, serve as a mobile point-of-sale (POS), provide phone/paging functions, and even view internal and external security cameras.
Wireless networks are an increasingly hot item as wireless local area network (WLAN) devices using the 802.11b standard, or Wi-Fi, have decreased in price and proliferated into home, school, and corporate environments.
High-tech market research firm In-Stat/MDR reports that in 2003 the number of WLAN chipsets forecast to be sold will reach more than 33 million, and by 2007, more than 94 million. And Natick, Massachusetts-based Venture Development Corp. forecasts that global wireless LAN revenues will grow by nearly 25% per year through 2005.
Most executives, though, already understand the benefits of going wireless. What they want to learn are the potential pitfalls surrounding a wireless implementation and how to overcome - or better - avoid them.
Problems such as hackers, poor wireless service, and slow data throughput can be problematic or even disastrous to a business. If companies consider several major factors before and during a wireless implementation, the risk of encountering these dilemmas will diminish.
To prevent this, attention needs to be given to securing every wireless network and device across the retailer's enterprise. Retailers moving to wireless networks should start with open-architecture hardware based on IEEE standards to avoid being locked into proprietary environments. This keeps the system flexible and allows users to mix and match devices. The IEEE's wireless 802.1x standard offers the security of 128-bit encryption capability and established authentication protocols.
Controlling access to the network is key to good security, so regular changing of spread-spectrum identification (SSID) codes for mobile devices and backbone access points is required to confuse unauthorized users. Access points should never broadcast their SSIDs because hackers need those codes to access the network.
Name servers should also be established to provide network access only to radio frequency (RF) devices with authorized MAC addresses. The MAC address typically serves as the username for each handheld unit or access point.
Encryption keys should be used, turned on, and rotated on a regular and random basis to properly encrypt data. When the encryption keys are rotated regularly, hackers see only garbage and can't break the codes.
Cost of Maintaining Security
For retailers with multiple store locations, remote management centralizes the supervision of all wireless devices in the enterprise. Without it, security maintenance would become a store-by-store task with unnecessarily high costs for training staff and a greater likelihood for errors. Good remote management consoles allow retailers to preschedule changes for security features such as encryption keys, SSIDs, and other identifying information to keep unauthorized users out of the system. In addition, they give retailers the ability to monitor all access points and distribute updates wirelessly to software and operating systems and to firmware.
Network Design and Installation
To avoid quality-of-service issues, networks should provide enough access points to allow excellent coverage. Anything less slows data throughput, thereby increasing wait-time for employees and customers, and ultimately cutting productivity. The optimal range for most access points is about 100 yards or less, so retailers need to ensure there are enough access points in the store to provide coverage for their wireless operations. Multistore retail chains should conduct site surveys of each store to test and ensure that the network is designed and installed properly.
To prepare for the future, a good firewall is recommended as some retailers will soon allow customers to use wireless personal digital assistants (PDAs) in the store for marketing information and other in-store communications. The firewall will control the customer's PDA access and prevent unauthorized users from obtaining proprietary information.
Hardware and Software Factors
Until recently, most mobile retail implementations have been focused on supply chain automation, including back-door receiving, inventory management, and shelf-label audits. These devices have primarily performed a single function, weighed more than one pound, and were suited only for barcode-scanning applications.
In this age of cost-saving, retailers are now turning to new platforms that are flexible, powerful, and have multifunction capabilities. A single device that can combine the functions of many will cut out costs for the extra hardware, software, and training needed for multiple single-function units.
Older devices were usually bulky and heavy, making it undesirable for employees to carry them for an extended period. Retailers should choose new mobile devices that are smaller, lightweight (one pound or less), and wearable, so they are easy to carry without fatigue. These handhelds should also be ruggedized to adapt to any environment, and have the durability to withstand a five-foot drop to concrete.
As more intuitive graphical user interfaces (GUIs) associated with operating systems such as Windows CE .NET become more widespread, retailers should look for mobile solutions that have bright color screens to display the enhanced graphics.
Two must-haves for retailers are barcode-scanning capability and magnetic stripe readers. Barcode scanning has multiple uses from shelf audits to inventory management. Magnetic stripe readers are used for customer-facing applications such as customer-loyalty programs and mobile point-of-sale.
Mobile units should also support 802.11b or 802.11g standards and optional Bluetooth capability. Fixed flash storage is needed for applications in store-and-forward data environments.
Support for browser clients such as Internet Explorer or remote desktop protocol clients is needed to give retailers mobile intranet and Internet access. The mobile devices should support legacy applications that typically are based on terminal emulations of VT100-200, IBM5250, and IBM3270 environments. Voice over Internet protocol (VoIP) support may also be necessary as more voice and video applications are becoming available for handhelds.
In retailing, stores continue to evolve into more customer-facing environments as demand for the number of customer touch points throughout each store increases.
Several point-of-service trends have emerged that retailers should consider when choosing the right mobile device to meet their current and projected goals. Those trends include mobile point-of-sale, gift registry systems, customer loyalty systems, and sales assistance.
Space for fixed point-of-sale terminals is limited inside each store, so wireless devices equipped with a scanner, magnetic stripe reader, and printer can serve as a mobile point-of-sale terminal or can help break up long lines during peak periods, to speed shoppers on their way.
Take, for example, a chocolatier chain that has room for only one point-of-sale terminal in each store. On most days, that one terminal is sufficient, but huge spikes in business around seasonal holidays such as Valentine's Day and Mother's Day demand extra service. With the proper handheld unit, employees using the inventory function can quickly switch to POS mode to reduce long lines and keep busy customers happy.
Retailers can also apply wireless devices to customer loyalty programs to quickly obtain a customer's shopping history from CRM databases. This is helpful if a customer needs to return an item but lost his or her receipt. In this instance, a store associate can verify the purchase through the database using the customer's loyalty card and provide a receiptless return, keeping the customer happy and preventing a loss for the retailer.
This similarly benefits a retailer's gift registry system, providing employees with mobile access and editing of lists, and giving customers a lightweight and user-friendly handheld to use while creating the list.
Mobile solutions can also provide sales assistance for big-ticket items such as televisions, cars, and homes. This makes your worst salesman almost as good as your best by providing each associate with the proper information on every make and model while reducing the need to memorize specifics.
In the retail environment, wireless devices can aid in loss prevention, store security, and sales campaigns.
Mobile units can prevent losses by alerting managers with proactive and reactive information. For example, if an employee receives a questionable check, the POS terminal can wirelessly alert the manager's handheld, thus proactively preventing a loss. On the other hand, if an employee has been ringing a lot of "no-sales," a typical sign of stealing, the POS terminal will send a reactive message to the manager's handheld computer.
With VoIP, mobile units can provide added store security by accessing the closed circuit television system monitoring chosen areas. The wireless device with VoIP also lets managers and employees access phone lines or each other for better communication.
Wireless devices can help management better prepare and manage sales campaigns. For instance, if a grocery chain wanted to run a sales campaign on a certain soft drink, management could run a store survey from a mobile unit to determine if the store was properly prepared. During the campaign, the manager could run an electronic planogram application to manage the campaign in real time.
Any wireless device should also have the ability to use terminal emulation to access legacy interfaces. This adds a level of flexibility should a retailer want to add a wireless network but not overhaul an old system.
Wireless technology will continue to advance and expand, and more people will benefit from its numerous applications and conveniences. However, despite what some might say, no technology is perfect and there are always potential pitfalls to any wireless implementation. With a bit of knowledge and a well-conceived IT strategy, companies can overcome those pitfalls and gain maximum benefit from the wizardry of wireless.
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