Hughes

Building a Robust In-store Mobile Network

It is abundantly evident that the digital revolution, which began on PCs and Macs in homes and offices, has migrated to mobile devices that can be used anywhere. For retailers, this development has ushered in nothing less than a sea change at their stores.

As they survey the shelves, consumers can now access a wide range of information on their smartphones, from prices to product information, all the while receiving offers tailored to their tastes or to their location in the store. Some are even using their phones to buy things or pay for them at the checkout.

Retailers’ initial concerns about showrooming have given way to the recog- nition that mobile shoppers need to be courted, not feared. The best way to do this is to offer free access to the Internet through Wi-Fi, affording shoppers an alternative to using their smartphone’s data plan. Free Wi-Fi can potentially engage a large portion of a retailer’s customer base — 56% of American adults are smartphone owners according to Pew Research’s “Smartphone Ownership 2013” report.

Powerful Wi-Fi signals Create a Competitive Advantage

Many retailers are now offering in-store Wi-Fi to shoppers, including Saks Fifth Avenue, Macy’s, Target, Home Depot and Lowe’s among many others, though not all stores actively promote Wi-Fi’s availability.

Of course, it’s not enough to just provide consumers wireless access — that access needs to be supported by a robust wireless network infra- structure. “The planning and implementation of a secure, reliable and high-speed mobile infrastructure is the foundation for mobile success,” according to the “Mobile Retailing Blueprint,” a document produced by the Association of Retail Technology Standards (ARTS), a division of the National Retail Federation. “No matter how enticing or innovative the ap- plication, consumers will not use if unless it is available on demand with reasonable response times.”

Some companies have already started carving out a competitive advantage based on the strength of their Wi-Fi local area networks (LANs). For example, Starbucks — perhaps the retailer best known for offering free Wi-Fi — last year replaced AT&T with Google as its Wi-Fi provider, with a rollout extend- ing through 2014. Google is reportedly promising that Starbucks customers will be able to surf the Internet at speeds up to 10 times faster than before. In 2011, Lowe’s revamped its wireless network infrastructure at more than 1,700 stores, accelerating Wi-Fi speeds by as much as eight times.

The benefits of the in-store mobility revolution are most fully felt by store as- sociates armed with mobile tablets and phones, who are able to assist shop- pers in a myriad of ways, from clienteling to inventory look-up to checkout, anywhere in the store.

Employees have long used wireless handheld scanners to receive and order inventory, validate shelf pricing and conduct cycle counts. Mobile devices free store managers from office duties and allow them to circu- late through the brick-and-mortar environment while maintaining access to store performance data.

For both associates and customers, mobility expands the store experience to areas that have traditionally been on the outside looking in such as the parking lot, fueling station and garden center.

Capitalizing on Mobile

Realizing that their stores are facing a tsunami of digitally empowered shoppers, many retailers are furiously moving to batten down the hatches with the necessary technology investments.

Seventy one percent of retailers believe that their current store technology is not capable of enabling the mobile shopping experience they envision for their customers and stores according to RSR Research’s “The Relevent Store in the Digital Age.” Retailers admit that a big part of the challenge has to do with the in-store Wi-Fi infrastructure and its inability to provide adequate load times to meet current digital media requirements.

In fact, 27% of retailers still have no Wi-Fi network in stores and rely on wired connectivity to support a digital shopping experience, and of those with Wi-Fi, 28% say they use it only for receiving and other inventory con- trol tasks, according to RSR.

Existing store networks are often unable to meet the growing demand of in-store WiFi usage. “That means retailers could be missing a valuable opportunity to interact with shoppers who are literally right under their noses,” says Allison Paul, vice chairman and U.S. retail and distribution leader, Deloitte.

Seventy seven percent of retailers believe store operations will benefit the most from mobility strategies, according to EKN’s “Mobility in Re- tail” report. Retailers’ current adoption rate is at odds with those sen- timents, with only one in 10 retailers reporting wide-ranging mobility adoption across the enterprise and only 25% of retailers providing smart devices to store associates.

Benefits of Free Wi-Fi Outweigh Capital Investment

Cost remains a huge concern in the margin-challenged retail industry — de- veloping store mobility strategies requires a considerable infusion of capital investment. “Retailers will need to demonstrate ROI of pilot projects to develop a value justification framework for large-scale investments,” says the EKN report. Retailers need to explore areas where mobility can help save dollars, such as replacing full system POS units with mobile devices.

In addition to cost, there are a host of other challenges posed by mobilizing the enterprise from device management to data security to compliance. Smart devices require always-on Wi-Fi Internet, cloud-based storage and applications. Nonetheless, the business case for mobility is such that EKN sees “mobility adoption in retail an area of tremendous growth, with the focus in 2014 being on “establishing ROI and building an executional model to manage a larger scale deployment.”

Wi-Fi access is a difference maker — 50% of smartphone shoppers would feel more confident making a major purchase if there was Wi-Fi connec- tivity in the store, according to Acquity Group’s study “Desktop vs. Smart Phone: Technology’s Impact on Omnichannel Behavior.” The study reports that 30% of customers would be more likely to browse additional items not on their list and 20% would spend more time in the store. Moreover, 59% have been influenced to make an in-store purchase decision after browsing product images and information on a smartphone.

“In-store Wi-Fi not only allows retailers to keep consumers in-store longer, making them more likely to purchase, but also helps tie in the consis- tent user experience across channels that today’s consumers expect,” says Chip Knicker, vice president of eCommerce at Acquity Group.

Retailers with innovative mobile strategies are able to capitalize on the high level of correlation between using a mobile shopping app inside a store and purchases made on the same day. Savvy retailers can capture valuable business intelligence that can help fine-tune sales staffing, mer- chandising and inventory composition, while simultaneously creating a new revenue stream by delivering mobile ads to shopper smartphones and tablets.

Coverage and security

To achieve the multitude of customer-facing benefits — and to bring ad- vanced mobility options to employees — retailers need to ensure the net- work has comprehensive in-store coverage and unimpeachable security. “Retailers will need to reimagine the enterprise network as being a high- availability, high-bandwidth and primarily wireless network” according to the EKN study.

In addition, retailers need to ensure that their external networks, which are delivering data to the store networks, are extremely reliable. Merchants using DSL and other terrestrial wide area networks (WANs) are backing up these connections with satellite technology or the 4G cellular network.

While there is no one-size-fits-all model for in-store mobility, Wi-Fi, used by most in-store wireless networks, is a good starting point. Wi-Fi, which is supported by the Wi-Fi Alliance, a global nonprofit association, “enables secure, reliable wireless connectivity to a local network and to the Inter- net,” says ARTS’ “Mobile Retailing Blueprint.”

To ensure comprehensive coverage and avoid overlapping with nearby networks — such as in a mall setting — retailers should conduct pre-deployment site surveys before installing Wi-Fi access points. Site surveys can also identify challenging areas and potential sources of interference. Retailers can also invest in new antenna technology that can help miti- gate interference problems. Post-deployment surveys can be employed to ensure that the network meets the retailer’s coverage requirements.

Supporting an In-store Mobile network

An in-store mobile network should have the following capabilities: seam- less roaming without experiencing connection issues, Quality of Service (QoS) control over service quality for selected network traffic, and “self- healing” in the event of a malfunction in a piece of equipment in the wire- less infrastructure.

Merchants face the additional challenge of managing all of the wireless de- vices used by employees, especially consumer-oriented tablets and phones that are not generally “retail-hardened” and emphasize usability over se- curity and manageability.

Mobile devices should be integrated with existing IT systems that moni- tor, update and maintain desktops, laptops and servers. Retailers should employ centralized and remote management of mobile devices to ensure seamless operation, enabling remote staging and provisioning. In addition, savvy retailers are employing centralized monitoring for user and device authentication, the ability to remotely disable and re-provision software, and for security policies such as the ability to remote wipe and lock.

Many retailers use third-party managed services to monitor networks and devices for security, availability and performance. Some retailers are em- ploying cloud-based centralization of data, applications and security to manage all mobile devices.

Creating a safe and secure network

It is, of course, essential to design a mobile environment that prevents un- authorized access to data and devices, permitting only secure, encrypted, and authorized communications. Retailers need strong security standards and credential-based access to battle advanced malware and viruses.

In addition, networks must be secure from unauthorized, unsecured or “rogue” wireless access points. Retailers should continuously monitor their networks for security threats, using enhanced security services such as a wireless LAN Intrusion Prevention System (IPS) and Intrusion Detec- tion System (IDS). Retailers offering both public Wi-Fi and internal Wi-Fi applications for associates should employ firewalls to separate public and private areas of the network.

A host of other security policies and controls are necessary to ensure device safety, including end-to-end encryption of data and tokenization. Retailers should employ “an automated system of alerts based on security breaches and user policy violations,” as well as “develop security breach and threat scenarios and codify responses to those,” recommends the EKN report. Compliance to the PCI Data Security Standard is necessary for any in-store mobility operation. The PCI Security Standards Council recommends the use of WIPS (wireless intrusion prevention system) to automate wireless scanning for large organizations.

Retailers using mobile POS need to integrate mobile POS security solu- tions that adhere to the PCI Data Security Standard, with software and hardware certified as compliant.

Wi-Fi Is not the Only tool in the Wireless toolbox

Wi-Fi is not the only in-store wireless platform available to retailers, and some merchants are beginning to explore alternatives that can supplement or even replace Wi-Fi.

For example, the latest mobile communication standard, 4G LTE, is begin- ning to be adopted by retailers as an alternative to Wi-Fi. 4G LTE offers higher bandwidth, faster response times and improved spectrum efficiency (increasing overall network capacity) according to a report by business con- sultancy Arthur D. Little, “The Business Benefits 0f 4G LTE.”

These advantages potentially allow more applications to be used on mo- bile devices, faster or real-time sharing of large files and streaming media, and near-immediate delivery of time-sensitive data, such as for real-time interactions or transactions, the Little report said. In addition, 4G LTE of- fers improved security — there is no need to authenticate onto another, possibly public, network.

In retail, 4G LTE is being used in new store formats, especially “pop-up” stores and retail kiosks. It facilitates targeting shoppers with “rich, engag- ing and often location-specific content,” says the report, and eliminates the need for customers to find and log into store Wi-Fi.

Another alternative wireless technology is near field communications (NFC), which employs short-range radio frequency identification (RFID) in such applications as payment and product identification. It will be used in chip-based credit and debit cards being rolled out in the U.S. market (and already used throughout the world).

A more promising alternative is beacon technology, such as the iBeacon developed by Apple. Each beacon is low-cost, easy-to-deploy and about the size of quarter that require very little power. iBeacons communicate with iPhones and many Android phones through the use of low-energy Bluetooth technology.

Beacons are regarded as having more granularity than Wi-Fi when it comes to identifying a smartphone. They can pinpoint locations within a few feet. Beacons can serve as tracking devices and facilitate messaging to smart- phones equipped with an app and Bluetooth. They can also enable pay- ments at the point of sale allowing shoppers to make a payment without having to take out their wallet or card.

A number of retailers on the cutting edge have already introduced iBeacon technology in-store. In December 2013, Apple launched the technology at its 254 retail stores. This year Safeway and Giant Eagle are rolling out iBeacons at their stores.

Wi-Fi sensors and beacons can anonymously track shoppers as well as offer targeted mobile offers to shoppers based on location and shopping history. At the most basic level, the technology detects and follows the movement of Wi-Fi enabled mobile devices throughout the store to ac- cumulate actionable data. At the advanced level customers that opt-in can be targeted with location-specific marketing messages in-store to help close a sale.

Data collected from Wi-Fi and beacons include trip timing, duration and dwell times at various store locations; overall traffic, by time of day, and by department; and whether customers are new, repeat or frequent shoppers. Retailers can use the data for display positioning, merchandising and labor scheduling, as well as the timing of promotions.

Conclusion

The widespread and increasing use of smart devices completely changes the nature of retailing and forces retailers to equip their stores to accom- modate the vast swath of the American public that will walk in armed with a smartphone.

In order to capitalize on the growing mobile opportunity, retailers have to invest in highly sophisticated wireless technology that supports a seamless and secure mobile experience. Anything less will leave their stores at risk of losing relevancy to the majority of their shoppers