Next-Gen In-Store Network: Dream or Nightmare?

Opinion: As mobile computing devices invade in-store operations—both what customers bring into stores and what the stores hand to those customers—the nature of in-store networking is likely to change dramatically.

Consider this scenario: A customer walks into a favorite retail outlet and grabs a handheld shopping helper from a rack near the entrance. The customer signs the unit out with a loyalty card and the unit accesses shopping lists from what the customer downloaded onto a Web site and uses in-store directional signals to navigate the customer aisle-to-aisle, displaying context-relevant video ads.

So far, thats nothing unusual, as this has been discussed extensively. But with the next wave of in-store networking, this scenario takes a science fiction-like turn. The handheld unit can communicate with RFID-enabled smart-shelves and their tagged item-level cousins, as well as signal digital signage to change based on the CRM (customer relationship management) profile of the approaching customer.

As the handheld device scans pricing, the smartcart acknowledges when an item is dropping into (or below) it. At the end of the shopping trip, the consumer quickly moves to the self-checkout area and barely slows the carts velocity. Think of a car approaching an EZPass booth, chuckling at the idea that he needs to slow down to 10 mph.

The smartcart confirms the prices with the handheld device and wirelessly reports this confirmation to the self-checkout system, which greenlights the customer through as it charges the credit card associated with that loyalty card. A receipt is printed as the cart zooms by.

The IT question: Is this scenario a dream come true or a nightmare? (As a parent, I would add a further choice. If a nightmare, is it the regular kind or one of those night terrors? To put this into context, in the world of retail tech, RFID deployment is a nightmare. PCI compliance is a night terror.)

Are the potential CRM and customer service advantages offered by such an approach going to make up for the mountains of glitches when a store has more than 100 of these wireless devices simultaneously talking back and forth?

Theres no question that the tablet to smartcart to smart shelf to item-level to digital signage to self-checkout reality is still years away, if it ever happens at all. And when it does, retailers in Asia will likely be far ahead of the United States, with European retailers somewhere in the middle.

But regardless of geography, were seeing product rollouts starting to go in that direction with a vengeance. Perhaps unexpectedly, the initial rollouts of such devices will likely force the acceleration of other rollouts, as they start to become dependent on each other.

For example, one major vendor is preparing to introduce a series of new customer PDAs that will do pricechecks and other basic functions, but its initial ability to communicate with other devices will be nil. One of the advantages it will be marketed for will be accelerated checkout because the items will already have been scanned.

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But that checkout acceleration only happens if the customer uses a staffed lane. If the customer does what the store wants and uses a self-checkout lane, either the attendant has to stop and verify the carts contents or the customer must take everything out and lay it on the conveyor belt so the self-checkout system can weigh it, thus defeating much if not all of the convenience.

I was talking the other day with Sheldon Safir, a director of product marketing at Motorola and an unusually insightful person on issues of in-store operations. (This is not to suggest that most Motorola managers are not insightful. They simply do a much better job at hiding any brain stem activity. Safir slipped up and revealed that he has the ability to think extensively. Hell learn to fit it in eventually.)

Safir argued that the kinds of customer-issued devices—which Motorola of course makes—in this scenario can have extensive return on investment if retail IT execs are flexible. He envisions the next-generation of devices, which will likely be sold to retailers in bulk at about $700 each, to be used by customers during peak shopping hours and then will be used by store employees (who will switch to a different application) on the store floor and in the backroom or loading dock for stock lookups and pricing changes.

Next Page: The trouble with kiosks.