Mobile computing fever about to strike

Mobile computing, from hand-held scanners to wireless networks, is taking the retail industry by storm. Bill Goodwin reports from...

Mobile computing, from hand-held scanners to wireless networks, is taking the retail industry by storm. Bill Goodwin reports from last month's Retail Solutions show

If the buzz from the retail industry's biggest IT show is anything to go by, an outbreak of mobile computing fever is about to strike across the retailing sector. Stand after stand at the Retail Solutions show in Birmingham last month gave pride of place to the latest hand-held scanners, mobile terminals, and wireless networks. It goes without saying that IT suppliers would like all their customers to believe that mobile computing is the next must-have technology. Many, however, have already begun to reap the rewards.

A case in point is supermarket chain Safeway, which was one of the early pioneers for mobile computing in the retail industry. Its Shop and Go service, which allows customers to scan their own groceries with a hand-held scanner, has expanded rapidly since its introduction in 1995. Now available in more than 160 stores, the service has proved popular with time-pressed shoppers who would rather not wait in a long checkout queue.

Safeway is using its latest generation of scanners to target its Shop and Go customers with what it calls "stealth marketing". Although the supermarket has abandoned its general loyalty card scheme, it believes that Shop and Go is an ideal vehicle for delivering personalised special offers to its customers. The company uses its data warehouse in Hayes, Middlesex to analyse Shop and Go customers' shopping habits, and beams relevant offers by satellite to the hand-held scanner. For example, a customer with young children might be offered a discount on nappies.

Other retailers have followed Safeway's lead. Sainsbury's introduced its Self Scan three years ago. Tesco and Waitrose are also running trials. Meanwhile, department stores like Debenhams are using portable scanners to help couples put together a wedding list.

The most exciting self-scanning application, though, is probably in home shopping. Safeway is trialling its Easi-Order scanning system for home shopping at its Basingstoke, Hampshire store. Some 500 customers have been given special Palm Pilot personal digital assistants (PDAs) fitted with barcode scanner and modem, which they can use to order their groceries electronically. If they run out of a product, customers can reorder it by scanning in its barcode. When they arrive at their local store, the goods are ready and waiting for them.

Tesco is also trialling Palm Pilots for customers using its Internet shopping service. The palmtops, which cost about £300, double as a personal organiser, with an address book and a diary. Rather than requiring customers to trawl through 20,000 products on screen, the PDAs allow them to compile shopping lists by scanning in barcodes from groceries already in their kitchens.

New technology under development could do away with hand-scanning altogether. US supermarket giant Wal-Mart, owner of Asda, and Marks & Spencer are looking at ways to scan in a whole trolley of groceries in one go, without having to unload. The solution is a radio-based price tag, called an Intellitag, which transmits an identification number encoded in a radio signal to a checkout. The success or failure of this system will largely depend on whether economies of scale allow the cost of the radio tags to be brought down sufficiently.

Radio tags are finding more immediate applications in distribution, where they can be reused, and cost is less of an issue. Sainsbury's, for example, has successfully tested radio tags on crates of chilled meat and ready meals. The tags have allowed the company to keep more accurate control of its stocks. At a cost of about 50p a tag, however, they are still too expensive to be used in the store.

Wap is another growth area. Waitrose became the first supermarket to offer a Wap service for ordering goods in April. The service is limited to last-minute items like chocolates, flowers and champagne. But within a couple of years, the chain hopes to be able to allow customers to order their weekly shopping from phones equipped with a barcode scanner. "We have caught the crest of a wave," says Waitrose marketing director Mark Price. "There are supposed to be 10,000 Wap phones in the country but there will be anywhere from 500,000 to a million by the end of the year."

HMV and other record stores plan to use Wap to allow customers to order CDs. But this could be just the start - eventually customers could use their phones to download CDs as digital files.

Vicki Raport, mobile computing expert at IT supplier Retek, looks forward to the day when retailers will be able to direct customers to special offers through their Wap phones as they walk around the store. Wap technology may be limited now, she says, but it will develop rapidly and retailers need to act now if they want to stay ahead. "There is an opportunity for retailers to start training their customers to support this technology now. It's going to develop very fast," she says. "Wap is a foundation layer."

For others, though, the real benefits of mobile computing are much closer to home. Several retailers at the Retail Solutions show were showing more interest in radio-frequency PDAs for their staff than in Wap systems for their customers. These systems have radio links that allow staff to check what items are in stock and at what price, without having to disappear into the warehouse - a practice that irritates the customer, loses sales and wastes staff time. PDAs use radio links to communicate directly with the stock control systems. If the item is out of stock, the assistant can immediately offer to order it or will suggest an alternative.

It may not be sexy, but this simple technology can make a big difference to sales figures.

This was last published in July 2000

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