As retailers look for new ways to drive revenue and improve the customer experience, mobile devices are migrating from the back office to the selling floor. Fueled by an expanded menu of devices and applications, leading retailers are now using mobility for much more than barcode scanning. Next generation mobile implementations are now delivering functionality such as real-time couponing, gift registry/wish listing and assisted shopping right into the hands of store associates.
However, in conjunction with the expansion of their wireless networks, retailers are also realizing the need to take measures to secure and service these devices. A new report from Aberdeen Group, “Mobile Field Workforce in Retail: Strategies to Reduce Total Cost of Ownership” found 73% of Best-In-Class Retailers have had a mobility initiative in place for one year or more. The report states that the mobile initiatives are enabling these Best-in-Class retailers to deliver: a stronger brand promise; a customer-intuitive process through improved focus on assisted and self service; and an agile retail process workflow in the field including stores.
Ed Weiser, Principal Consultant for Retail Solutions for Motorola’s Enterprise Mobility Solutions division, says he has seen a significant spike in interest and activity in four specific areas:
- Mobile POS: With the majority of rollouts focused on line busting and mobile payment.
- Store Manager Solutions: “Retailers want to get managers out of the office and onto the sales floor where they can interact with customers,” Weiser says. “In order to do that, they need to give them devices that enable them to access key applications such as checking email, making a phone call or even viewing a dashboard. The new generation of devices offer larger screen sizes and integrate all forms of communication onto a single device.”
- Task Management: There is an increased push to track and manage the wide variety of tasks and information which are channeled from a retailer’s headquarters down to each individual store location. By delivering task management applications on a mobile device, Weiser points out that management can not only streamline the flow to the store, but also “close the loop” by sending confirmations back to headquarters to show critical tasks were completed.
- Consolidating In-Store Communications: Innovative retailers are turning to their wireless networks to consolidate voice and data delivery to managers and associates within the store. Weider points out mobile devices can now be deployed for point to point communications to replace antiquated mediums-- such as overhead paging--which is often inefficient and can be disruptive to the customer experience.
The expansion of mobility is not limited to traditional retail outlets either, as recent research shows hospitality companies are also viewing mobility as a competitive differentiator. The new Motorola Enterprise Mobility Solutions Hospitality Barometer found that 82% of respondents reported an increasing importance of mobility within their organization in 2009 to help drive revenue and improve the customer experience. And more than 60% of hospitality decision makers believe these technologies are providing consistent service and competitive advantage.
Nearly half of the survey respondents reported a boost in customer satisfaction; 27% cited an increase in per-guest average spend; and one quarter identified a rise in inventory accuracy as a result of implementing a mobility strategy.
Security & Compliance
While most retailers see the benefits of integrating mobility into their stores, many have been hesitant to expand their use of wireless because of the security some major retailers have suffered in the past. The most visible example of potential security problems came in 2005 when criminals targeted wireless price-checking devices at TJX Companies’ stores to hijack nearly 50 million credit and debit card numbers of TJX’s customers.
Despite that high profile data breach, research shows that many retailers are failing to take the necessary measure to secure their wireless devices and networks. A survey conducted earlier this year by Motorola’s Enterprise Mobility Solutions division found 44% of the wireless devices used by retailers - such as laptops, mobile computers and barcode scanners - could be compromised. The good news from the 2nd Annual Motorola AirDefense Retail Shopping Wireless Security Survey, was that showed security vulnerabilities were reduced significantly from the year prior, when 85% of wireless devices were susceptible.
AirDefense's Wireless Security Survey monitored 7,940 access points and discovered 32% were unencrypted, compared to 26% in last year's survey. Using Motorola AirDefense technology, Motorola scanned the airwaves at major shopping centers for the presence of wireless networks and evaluated what wireless data security practices were currently in use. This evaluation took place during the third quarter and fourth quarter of 2008. The survey research included a review of wireless data security at more than 4,000 stores in some of the world's busiest shopping cities including Atlanta, Boston, Chicago, London, Los Angeles, New York City, San Francisco, Paris, Seoul and Sydney.
The report found that security vulnerabilities in wireless networks typically are the result of weak encryption, data leakage, mis-configured access points and outdated access point (AP) firmware. It also pointed out that by using the same technology, configuration, security and/or naming conventions at all retail locations, vulnerabilities repeat themselves across the entire store chain, rendering them susceptible to attacks as well as Payment Card Industry (PCI) non-compliance
Motorola’s Weiser says it is critical for retailers to have a wireless intrusion protection system, especially on any implementations that touch POS. However, once those intrusion protection and PCI compliance steps have been addressed, Weiser argues that “wireless solutions are more secure than wired” because they are top of mind from a security standpoint and the forensics tools now available.
New Service Points
In addition to taking steps to securing their wireless networks, the Aberdeen report on Strategies to Reduce Total Cost of Ownership also emphasized that successful retailers are also setting up service plans to support the new mobile devices they are deploying. According to the Aberdeen report, “Best-in-Class retailers are 1.8 times more likely than other retailers to create the necessary systems for help desk support, in the event that there is downtime related mobile computer malfunction or data transfer errors.”
As a result of that attention to service levels, Aberdeen found Best-in-Class retailers are realizing 99% up-time, compared to 95% for the Average retailers, and only 86% service-levels for merchants classified as Laggards. The research also found 44% of the wireless devices used by retailers – such as laptops, mobile computers and barcode scanners – could be compromised.
This was still significantly lower than the 85% of wireless devices that had security vulnerabilities in the same survey last year.
Overall, a quarter (25%) were still using Wired Equivalent Privacy (WEP), the weakest protocol for wireless data encryption.
But new WEP deployments are prohibited by version 1.2 of the Payment Card Industry (PCI) Data Security Standard (DSS) in any part of the cardholder data environment (CDE) beyond 31 March 2009 and must eliminated from the CDE by 30 June 2010.
The research pointed out that, by using the same technology, configuration, security and naming conventions at every retail location, merchants can essentially repeat vulnerabilities across the store chain, rendering them non-PCI compliant and susceptible to attack.
