Retail

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WLANs have long had a place in the retail industry through back-office applications such as receiving, mark-downs, price verification, and inventory management. According to the twelfth annual RIS News/Gartner study, more than 40 percent of retail respondents have adopted wireless and an additional 29 percent plan to adopt it by the end of 2003.

If a facility already has wireless LANs in place, adding wireless access points and devices in the public area of the store is simple. Symbol Technologies, which has the majority of the wireless scanner market (at least two thirds), sees strong movement to wireless deployment in a few key areas:

• Better customer service. Mobile registers for better customer service during seasonal or sales-related traffic changes within a store's departments and sectors.

• Mobile customer service. WLANs can help provide mobile customer service for applications such as line-busting, assisted shopping, or checking inventory availability at another store.

• Self-service. WLANs provide kiosks connectivity, which are used to provide customer self-service options, such as bridal and gift registries, custom configuration, and can even be used for customer price checks, if scanners are attached.

• POS applications. Wireless registers can be employed for customer checkout. Of course, if the WLAN is to support POS applications, such as processing customer credit cards, robust security measures must also be in place.

Frank Riso, director of business development for retail at Symbol Technologies, estimates that about a quarter of midsize and large retailers have at least one pilot program in operation to test front-of-store wireless applications. For example, Macy's department store in New York's Herald Square places Wi-Fi-enabled registers on wheels, so it can add cashiers as needed during sales and other customer peak times. It also uses wireless kiosks for customer self-service price checks.

Riso says that supermarkets and discount stores use wireless register set-ups for sidewalk sales, and to equip springtime garden and December Christmas tree "departments" that are seasonally deployed in front of stores or in the parking lots. "The cost is small, about $300 to $500 to add the client bridge hardware to the register," Riso says.

"More and more, they're not building a store without building a wireless infrastructure," says Riso. In the U.S., Wal-Mart, Best Buy, and Home Depot all use wireless LANs in various aspects of their day-to-day operations. According to WLANA Magazine, the ROI for retail-based WLANs averages 9.7 months.

Case Studies

Home Depot

Home Depot, an early adopter of wireless LANs, uses proprietary two Mbps wireless LANs to access inventory applications in most of its 1400 or so stores. But Home Depot is installing 802.11b products made by Symbol Technologies in new stores, and has begun the process of upgrading other stores to 802.11b. Home Depot pays about half of what it paid five years ago for its proprietary wireless network. The fact that the new technology is much more efficient provides the incentive to upgrade. But the real takeaway for the home improvement retailer is that it's now much easier to scan products and then label merchandise as it sits on the shelf, rather than taking merchandise to a fixed terminal to do the same.

A notebook computer with a scanner connected to a wireless LAN enables employees to price and label products more efficiently, thus saving on labor costs. "It really did change our labor standards and the amount of labor hours set aside to do certain activities," says Dave Ellis, vice president of IS operations and networking at Home Depot.

But that is not the only way Home Depot utilizes its wireless infrastructure. Thanks to lower costs, new open standards, and a wealth of new applications, more and more retailers use wireless applications to improve customer services, e.g. to provide faster customer check out, to find relevant promotions, to locate products, and to print out coupons.

By capitalizing on its wireless technology, Home Depot keeps its customers happy, which of course, translates into more profits. The compelling reason for a sales associate to stay with a customer during a high-ticket sales event is higher profits. A PDA that can wirelessly access the company's inventory databases allows the sales associate to query inventory and product information without disconnecting from the customer.

Home Depot also extends its WLAN in other ways. How many times have you spent the better part of an afternoon wandering through a cavernous warehouse-style retail store, filling up your shopping cart-or worse, taking a quick dash through the aisles for a couple of quick items-only to find the lines so long at the check-out area that you can't even see the cash register. Not a scenario that results in a happy shopper.

Home Depot's enterprise mobility platform also underpins a rapid register program, known as "unleashed"-a wireless system empowering store associates to expedite the checkout process. Home Depot has deployed this "unleashed" application in all of its stores to enable Home Depot associates, using wireless handheld devices, to scan a customer's purchase while they're in line.

It works like this: when lines get too long, the associates go to the customers for checkout rather than vice versa. Store associates use wireless handheld personal digital assistants (PDAs), which are equipped with barcode scanners, magnetic strip readers, and printers for generating receipts. They scan a waiting customer's items while they wait in line, print out a receipt, and hand it to the customer. When the customer reaches the cashier, their purchase record is retrieved and transacted.

This process is called "line busting," and it's one of several wireless solutions that are debuting on the floors of major retailers around the world. The company's CIO, Ron Griffin, notes that the increases in staff efficiency that resulted from the "line busting" process allowed the system to pay for itself within the first year.

The unleashed application, developed by 360Commerce, was built upon Home Depot's existing wireless infrastructure and point-of-sale technology, demonstrating the power of modular architecture. While its primary role is to speed up the transaction process, 360Commerce's Sr. VP of marketing, Christine Lowry, notes other benefits that the unleased program yields "It is also convenient for customers who purchase products from outdoor areas, such as garden centers, and a great way for stores to stay in contact with a customer through a multi-item, big-ticket purchase, such as a kitchen remodeling project."

Longs Drug Stores

Each of Longs Drug Stores' nearly 450 western U.S. retail locations stock, on average, more than 100,000 items. Thus a lot of support staff, paperwork, and computing power is required to keep on top of inventory and pricing changes. All the necessary data including point-of-sale (POS) information must then be sent over high-speed data lines to the company's central inventory database in Walnut Creek, California, to keep the company's records current.

With the retail system far from the store floor, keeping up with changing prices meant that individual store managers had to fill a shopping cart with every product sold, wheel it into a back room, scan everything, then return the products back to the shelves. Then the system printed out problem lists, and the store employees addressed those issues, in the aisles.

For instance, any change in pricing (e.g. manufacturer price increases, temporary price reductions, promotions) required new labeling on the shelves, and sometimes even on the items themselves. Regular changes in stock (holidays, seasonal, and back-to-school promotions) meant a constant cycling of products on and off the shelves. "It's a very dynamic environment," says Carl Britto, Longs' director of store technology planning. "That's what's so exciting about retail."

Longs Drug Stores knew it had a problem and sought ways to eliminate some of the costly and time-consuming steps needed to keep abreast of inventory and pricing. The answer was a wireless LAN and a "mobile manager 1000," a pushcart with a built-in wireless laptop from Symbol Technologies. With the mobile manager, store employees could take the cart to the product, and scan and transmit the information to the store's retail information system. According to Britto, once the system was designed and tested, all of Longs more than 450 locations were up and running within seven months. He adds, "The rollout was one of the fastest we've ever done."

Britto pointed out several critical steps that the retailer used to help quicken the pace. The first was a five store pilot project. This gave the company data on what needed to be done for a smooth deployment, as well as a means to calculate an estimated return on investment (ROI). Next, the company developed a complete rollout plan. So, as Britto explained it, "you don't have to double back" and repeat any steps that might have been missed. Then, the company rolled out the new technology and application before the wireless hardware was up and running, giving local managers time to learn the software.

As for the ROI, according to the pilot figures, it's estimated that a WLAN will reduce labor costs by at least 10 to 15 hours per week, per store. Thus the WLAN and its supporting gear are estimated to provide complete payback within 12 to 18 months. And Britto brags the company is "pretty close" to being on track to delivering on that commitment.

Longs is planning for the future. According to Britto, the next step is to use smaller, handheld devices so that store personnel can process customer returns and perform store audits quickly. Furthermore, the company is experimenting with connecting other store equipment (e.g. photo lab processing and video rental machines) to the WLAN, and perhaps even converting some cash registers to wireless to enable stores to hold sidewalk sales more easily.

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