Mobile Devices Spark A Retail Revolution

Mobile devices are poised to be the major technological change driver of the first decade of the 21st century. This revolution is taking place today, but it is in its infancy.

When complete, the technology will affect numerous facets of everyday life for just about everyone in retail — how manufacturers and retailers go to market and get things done; how consumers interact with manufacturers, retailers and each other; and, to a lesser extent, how consumers shop for and purchase products and services.

Over the next five years, mobile devices will fundamentally alter how companies get things done and interact with partners in their supply chains, how companies communicate and market to consumers, and how consumers develop relationships with companies. The devices will produce tremendous opportunities coupled with challenges for manufacturers and retailers alike.

Mobile devices, as stand-alone pieces of technology, will be capable of generating large benefits for manufacturers and retailers as well as consumers. But when mobile devices are connected with other developing technologies that will make it feasible for individual products and other devices to communicate remotely, the potential benefits increase exponentially. It is the coming together of numerous technologies, including mobile devices, Auto-ID, Bluetooth and 802.11, that will transform supply-chain processes at manufacturers and retailers as well as affect how consumers function.

The mobile device of the future will look and feel very different from today’s. It will be equipped with additional standard features and functionality, including an Internet gateway, a personal information manager, e-identification tools, multimedia functionality and telephony. Furthermore, Internet access via the mobile device of the future will always be on.

Auto-ID is currently in development, with the end goal being the embodiment of a cheap microchip in every product to make products “smart” and capable of “talking” with other products and devices. The technology will eventually make it plausible for every item to be uniquely identified and tracked as it is manufactured, transported, purchased and used. The chip will include information and commands that make inanimate objects intelligent and capable of communicating with devices as they travel through a company’s supply chain and into consumers’ homes.

Bluetooth will make it possible for individual devices to communicate with one another and, potentially, will link every device on the planet. Bluetooth is a short-range wireless technology that works by embedding tiny, inexpensive, short-range transceivers into devices. Bluetooth permits data as well as voice connections of up to 30 feet. While the Internet has connected the world’s PCs, Bluetooth could extend that network to nearly every device in consumers’ homes.

While Bluetooth will become more widespread in homes, another technology — 802.11 will permeate offices and distribution centers. 802.11 is basically a wireless local area network, capable of transmitting data to devices hundreds of feet away at faster speeds than Bluetooth. The technology will make it possible for retailers and manufacturers to optimize supply-chain processes, providing access to critical information in real time to facilitate the decision-making process and automating select tasks.

How will mobile devices impact shopping? As a general guideline, retailers and manufacturers should think supply-chain enhancements first, shopping process augmentation second. With regard to the shopping process, companies should focus on mobile advertising and customer service initiatives before the selling of products and services.

The ubiquitous nature of mobile devices, coupled with the ability of consumers to communicate where they are physically located and the need or problem they are attempting to address, will facilitate the delivery of personalized marketing messages. Potential marketing activities will focus on attracting users to a store in the vicinity via alerts that feature special promotions. The marketing possibilities will be almost endless, limited only by creativity on the part of marketers and the willingness of mobile users to make their location and needs known.

Besides a focus on advertising and marketing initiatives, mobile devices will ultimately exert their influence on other aspects of the shopping process. They will expedite the basic shopping process for consumers, helping users find the closest store that has a particular product in stock at a good price. Furthermore, mobile devices will raise the customer service bar, making it easier to locate products in a store, “call” a customer service representative and access detailed product information.

Certain product categories will transition to mobile devices more fluidly than others will, similar to the recent migration on the Web. Furthermore, certain people will be more likely to employ the technology in a retail setting. Technology enthusiasts, business users and the younger generation will be more likely to embrace mobile device applications.

Ultimately, mobile devices will flip the rules of the game upside down. Shopping will never be the same. For retailers, customer acquisition and retention strategies must transmute, new customer service programs will become plausible and eventually expected, and anytime, anywhere shopping will become a reality. Mobile devices will raise the bar, and companies that do not adapt will be left behind.

So, what should companies do today? Most importantly, recognize that mobile is definitely coming. The question manufacturers and retailers should be asking themselves is, “When?” not “if.” However, as companies develop their plans for the mobile future, keep several thoughts close at hand – not the least of which is that mobile business-to-business enhancements will be bigger than the mobile business-to-consumer opportunity.

While it would not make sense for every manufacturer and retailer to advertise and sell products via mobile devices, the opposite is true regarding supply-chain enhancements. Mobile devices will provide critical information in real time (inventory levels and sales, for example) to retailers, manufacturers and their partners. Furthermore, price changes on the sales floor and the ordering process at stores will become more automated. The major benefits will be lower costs as well as better inventory management and decision-making capabilities throughout the supply chain.

Once the mobile ball starts picking up speed in the United States, nothing will stop it. E-commerce companies need to start planning today so they can react quickly to the coming mobile revolution.

• Geoff Wissman is principal consultant at PricewaterhouseCoopers, Columbus, OH. Reach him at [email protected]

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