Data on Aisle Six!

As retailers plunge headlong into wireless workplace solutions, early adopters show dramatic returns.

Before deploying a wireless logistics and distribution tracking system called OD STAR, Office Depot lost seven figures annually on unresolved delivery disputes with customers. In retail, the customer's always right, but this mantra was costing the merchant dearly (www.officedepot.com).

“Prior to the OD STAR system, all we could tell a customer was their order was out for delivery,” says Dennis Andruskiewicz, Office Depot senior vice president of distribution. “Today, the hand-held has the entire manifest downloaded onto it and enables the driver to work paperlessly.”

If a customer's order is scheduled to be the 17^th stop, and 12 stops are completed, Office Depot can give the customer that information and estimate arrival time.

Office Depot, working with Aether (www.aethersystems.com) and Symbol (www.symbol.com), developed the custom app that runs on Symbol's SPT 1700 Palm OS portable device and mobile gateway. The tracking system will be fully operational in Office Depot's fleet of 2,200 trucks in 20 markets by the end of the fiscal year. Aether's transportation and logistics division helped develop, test and implement the system. It tracks up to 100,000 shipments daily.

Drivers, dispatchers and managers can access electronic signatures collected at delivery. A Web interface linking customers with that information will be deployed in the near future.

Wireless technology plays a big role in today's retail environment. That role will be in the spotlight as apps, networks and hardware improve. Big-box retailers, small stores, gas stations and movie theaters are using wireless apps to operate inventory, sales, customer data, proof-of-delivery and other everyday functions. Beyond this, many are dovetailing these apps with existing or new management solutions for managers and executives who need to keep track of operations while on the road or in the warehouse. Links from data used by employees to m-commerce opportunities are the next evolutionary step.

“As devices and bar-code scanning and wireless all get thrown into the pot and mixed around, we think consumers themselves will see enough value that they'll go out and buy a device with wireless ability for communications, bar-code scanning for ordering retail or information,” says Frank Riso, Symbol director of marketing for retail and logistics groups. “Believe it or not, we think this is only about a year away.”

From ruggedized hand-helds and wireless LANs to middleware and apps, the retail sector is an immense market for carriers, systems integrators, software developers and hardware manufacturers. The latter category gets much of the “glory” in the aisles of Office Depot, Target and other stores today. Symbol and Fujitsu (www.fujitsu.com) control the lion's share of the ruggedized portable market, with Symbol the clear leader domestically (after a recent acquisition of Telxon). Fujitsu has a larger share of the international hand-held computer market.

Riso says his company concentrates on developing “best-in-class devices that are ruggedized and app-specific, computing and using both LAN and WAN communications capability and also incorporating other types of data transmission such as Blue-tooth and RFID.”

Most apps running on a device in a retail environment will access bar-coded information.

“The bar code, in retail, is a de facto standard,” Riso says. “Whether it's clothing or a can of peas, it's bar-coded. In retail, you keep track of money, merchandise and people. We haven't bar-coded people yet, but through consumer loyalty clubs and programs we keep track of customers, to an extent.”

The Unwired Clerk

Apps such as OD STAR share the market with others that perform inventory audit, mobile point-of-sale (POS) and wireless personal-shopping functions.

SofTechnics (www.softechnics.com) a software company with connections to Telxon and Symbol, provides a system that enables auditors to inventory convenience stores and to create reports on shrinkage, sales trends and other information.

“We have an equivalent product for the general retail market, called GEM 2020,” says Mike Holman, SofTechnics CTO. “It's also a store mobile application that does the same type of inventory control — ordering, receiving — for the general retail market.

“The important thing about these apps is … that the critical reason to use portable terminals is to allow the worker to access information at the point the work is being done,” Holman says. “Say you're doing receiving, then you need access to item information at the point of receiving or shelf.”

GEM 2020 provides in-store inventory control for the general retail market. Although apps like these are somewhat simple to install on regular data networks, extending that network wirelessly can be a high-tech tango.

Holman explains that a typical retail deployment might include a Symbol wireless access point hard-wired to the in-store wireless LAN. The retailer then can bridge over to the wireless LAN with 802.11b-compliant access points. This system can support portable terminals for POS service, real-time inventory and voice over IP (VoIP). Holman says replacing landlines with VoIP is not happening fast, but the technology is available.

Radiant Systems has a significant (www.radiantsystems.com) cross-marketing agreement with Symbol to sell each other's products into existing customer channels.

Carlyle Taylor, Radiant Systems executive vice president, says the company focuses on convenience stores, gas stations, movie theaters and restaurants.

Radiant, which sells computer solutions to retailers, converted to an ASP business model last year. Some clients still work with Radiant on a traditional licensing-fee basis. However, new customers automatically are channeled into paying a monthly fee and hosting costs.

“We are using Symbol's wireless products on the front end in table service,” Taylor says. “We provide wireless ordering, so they can go to a table, take an order, and it goes directly to the kitchen.”

On the R&D front, Radiant is studying 802.11-enabled devices, compact flash for wireless POS terminals and other scenarios.

Cost-Benefit Analysis

Security and cost top the list for retailers considering wireless solutions. Enterprise data can be compromised by DHCP — a protocol that allows a wired or wireless LAN node to be registered automatically and assigned an IP address. Potentially, an unauthorized RF device could be registered to access confidential data, but a locked steel door usually holds would-be eavesdroppers at bay, Holman says.

“You do have password controls, but inherently you have a physical control over a wireless LAN,” he says. “If you simply do not permit access to the hub connection by placing it behind a locked door, then you can't gain access.”

Cost is hard to pin down, due to variations in square-footage, staff size, inventory-tracking requirements and other factors. However, industry experts peg the average in-store wireless-system cost around $5,000. Of course, maintenance, upgrades and other costs are tacked on later. Cost is relative to bandwidth needs — just as it is in the public wireless world.

“These wireless devices have a certain range,” Holman says. “When you move up in frequency, you get about 11Mb/s. The more throughput a wireless network supports, the smaller the coverage area you have with a given access point. Of course, bandwidth and throughput are the priorities. Typically, a large store would have two or three access points in it and a number of portable terminal devices.”

Productivity gains outweigh initial costs, and data integrity is another benefit from wireless systems, say retailers that have deployed such systems.

“Within retail, there's a direction toward inventory control via perpetual inventory or computer-assisted ordering initiatives,” Holman says. “Those all are based on data administration. By allowing the user direct access to information while they're conducting their inventory, more accurate data is recorded.”

Customers also will experience positive changes as a result of wireless systems in stores.

Mobile POS terminals, especially in a crowded store, will defuse many tense situations stemming from huge lines and long waits at the cash register.

SofTechnics sells an app that mimics an IBM cash register on POS terminals. Employees scan the item, get to the point where they're ready to process the actual transaction, and then put the device into a docking station with a card reader, till and receipt printer. Thus, employees can roam the store freely, assisting customers with questions and selection. When the customer is ready to finalize his transaction, the employee places the portable into a docking station to complete the transaction.

Eerie sci-fi commercials depict people grabbing food from grocery shelves without paying. There are no clerks. Payment is automatic (and surely wireless). Some day soon, when this future catches up to us, you and your shopping cart will slip quietly, painlessly and wirelessly in and out of stores without a care in the world. Of course, your personal IP address will be watching. Like Riso says: “We haven't bar-coded people — yet.”

By the Numbers

As new apps help cut through the network fog, a number of network-access protocols — outside the WCDMA vs. cdma2000 debate — are gaining ground:

• Frost & Sullivan (www.frostandsullivan.com) recently (July, 2001) released a positive report regarding the future viability of wireless LAN solutions for mobile work applications in the retail, hospitality, healthcare and manufacturing sectors. The report noted that any business with highly mobile workers benefits from using wireless LAN-enabled apps. Two obstacles to widespread adoption remain: low awareness by end users and comparable wireline costs that are lower (roughly $300 per user) than wireless connection costs (roughly $1,000 per user).

• Bolstering the future of wireless LAN technology is a separate study released by Sage Research (www.sageresearch.com), which surveyed IT professionals in more than 125 organizations with 100 employees or more. The survey found an increase in adoption of wireless LANs, leading its authors to conclude that the technology had moved into the mainstream.

• In July, The Wireless Ethernet Compatibility Alliance (www.weca.net), which promotes global acceptance of 802.11b HR as a standard, announced it had added 22 new member companies, bringing overall membership to 103.

  In less than two years, we have seen a transition from a few companies delivering wireless LAN products to a broad range of companies delivering technologies and services aimed at enabling the Wi-Fi market.” says David Cohen, WECA chairman.

• The Yankee Group (www.yankeegroup.com) predicts that the number of consumers making retail and financial transactions over wireless devices will reach 225 million by 2005.

• According to a recent study from Ovum (www.ovum.com), 100% of respondents from the retail industry in England said they were using wireless apps now (50%) or would be in the next six months. Retail respondents stated that they disagreed strongly with the statement that U.K. enterprises are waiting for 3G before adopting wireless enterprise solutions.

• Overall, IT service spending is not suffering much from the economic slowdown in the United States, according to IDC (www.idc.com). The research firm says the worldwide market for information technology services grew 11% in 2000, reaching a total of $395 billion. Through 2005, another $305 billion will be added to this figure, bringing the overall market to nearly three-quarters of a trillion dollars. Worldwide IT Services Industry Forecast and Analysis, 2000-2005 predicts a compound annual growth rate of 12%.

Specifically, through 2005, IDC says infrastructure services such as third-party app development, network consulting, integration and network infrastructure management will grow most rapidly. Systems integration will be the big winner, with a $142-billion-chunk of worldwide IT spending in 2005.

Network Nightmares

Retail employees using wireless technology probably would be hard-pressed to say exactly what type of networks they use. With the proliferation of alternative wireless networks today, a blank stare would be an understandable response.

Switching back-and-forth between wireless LAN and wireless WAN access is fairly common today. Car rental agencies, for example, have been doing just that for quite some time, using the ARDIS network. Other apps, particularly those for transportation and logistics functions, take advantage of the ability to switch from in-store wireless LAN access to an alternative transport mode automatically.

“It's fairly common in our industry for an employee at a store to be able to access their corporate systems via a wireless device,” says Mike Holman, SofTechnics (www.softechnics.com) CTO.

Many future products will remedy the network-selection headaches of today's retail systems integrator. For example, SofTechnics is developing a product that provides retailers custom-rendered portal views into their computer systems and enterprise information.

Store directors, managers and sales personnel all can connect to the network. Through their profiles, they would each view the appropriate information, Holman says. And each of these employees may be using a different device operating on a different type of wireless network.

“All of this follows the general trend of presenting information to the user in a format that is in context of their needs,” he says.