WIRELESS WARMING UP?

Byline: Valerie Seckler

NEW YORK — “It’s much like the Internet back in 1995 — it’s hard to say where it’s going to go in the U.S.,” observed Steven Skinner, partner in the retail strategy group at technology consulting giant Accenture.
The virtual enigma? The near-term future of wireless Internet use in America, a country founded on the independent spirit mobile devices themselves foster, but one where wireless ‘Net technologies have so far failed to spark much use by its consumers.
“I expect we’ll see a much stronger take-up of wireless applications here in the second half of the year,” Skinner projected in a phone interview with WWD. “A good portion of larger U.S. retailers are expressing interest in wireless technologies, trying to figure out when and where to deploy them.”
He was referring, in part, to conversations Chicago-based Accenture has had with some stores, but he did not identify those parties. “They are trying to include a focus on consumers, but they have not decided whether to keep their focus internal, on the supply chain, or to include consumers.”
Despite this murky picture, Skinner said one thing regarding wireless ‘Net use appears to be clear: the early spread of it here will be based largely on business-to-business applications aimed at better managing the supply chain, thus boosting operating efficiencies. That’s already happening at stores like Belk’s, Sears and Kmart because, as Skinner noted, “in those cases, a retailer controls its own infrastructure; it’s not dependent on anyone else. Also, the benefits can be more clearly articulated. As we are unsure which wireless applications will take hold with the American consumer, it is hard to get retailers as interested in them.”
Skinner offered his assessment during a review of Accenture’s new “Global Wireless Internet Survey,” which it took in the fourth quarter of 2000.
“In the U.S., we’ll probably take cues from Japan and Europe, on things like which applications will eventually migrate here,” Skinner said. Besides an absence of problems with land-based phone networks — a condition that has spurred mobile technology abroad — Skinner pointed out that the wireless sector’s growth in the U.S. has been stunted by a blind spot: the failure to anticipate hot demand from teens, now eager to “talk” via short-messaging features on mobile devices, such as cell phones or personal digital assistants, like the Palm Pilot.
“At the consumer level, particularly among teens, the pickup of wireless technology for short-messaging systems went through the roof — and was unforeseen in the U.S. Here, most teens are still relying on chat rather than short-message mobile technologies. Until we see teens adopt short-messaging in the U.S., I don’t expect the spread of consumer-based mobile applications,” he said of a scenario that appears to be a sort of chicken-and-egg conundrum.
“American teens are used to a 17-inch screen on their PC to see information,” Skinner added. “When we can get teens used to a PDA, or another handheld, we will see a tremendous surge [in wireless use].”
The big surprise for Skinner in Accenture’s study was the U.S.’s continuing status as a laggard, far behind Japan and Europe in wireless circles. Possible reasons, beyond purely technological factors, he said, include e-tailers’ sharp focus on executing operations — and preserving capital — during the last holiday season.
“If the financing climate during Christmas 2000 had been more like 1999,” Skinner postulated, “we probably would have seen a lot more wireless Internet applications here by now.”
For example, the Accenture survey of mobile device owners in Japan found 100 percent of people with two-way text pagers use them to go online; 86 percent do so via PDAs, and 72 percent via mobile phones. In the U.S., in contrast, only 13 percent of wireless users access the ‘Net via two-way text pagers; 15 percent through PDAs, and 6 percent on mobile phones. Across European regions canvassed — Finland, Germany and the U.K. — the PDA was the preferred mode of access, with 71 percent of Finns using them to go online, and 24 percent of those in both Germany and the U.K.
The most popular wireless activity among U.S. cybersurfers is using e-mail, where 47 percent of mobile device owners say they do so; it also tops the list among the wireless denizens in Japan (75 percent) and the U.K. (64 percent). Finding news online was a close second among users in the U.S., with 46 percent saying they do so via mobile technologies.
Curiously, although a distant third to the Japanese and Europeans in wireless use, the U.S. has nonetheless led the way in shopping from mobile platforms, the Accenture study showed. About 12 percent of the mobile crowd here has done so, versus 9 percent of Germans, 7 percent of Japanese, 6 percent of Brits and 5 percent of Finns. Early U.S. wireless shopping applications include one mounted by A|X Armani Exchange, which began offering mobile or m-commerce, in August. And in September, an application from wireless service provider GeePS, which sends real time location-sensitive ads, was deployed at Palisades Center in West Nyack, N.Y.
Skinner sees the big brands triumphing in the wireless arena as they have to date on the broader Internet. “In 1995, it was all about Amazon and eBay setting the trends for retail to follow,” Skinner recalled. “We know from new studies that 47 percent of U.S. consumers would not conduct e-commerce transactions with pure-plays. The brands’ supremacy will carry over to wireless,” Skinner forecast. “Among apparel retailers, those with sophisticated infrastructures will lead the way: J.C. Penney, with its catalog, Web site and stores; Sears; Gap would be another, plus they have a good demographic for attacking the wireless space, as do Abercrombie and J. Crew.”
While they are moving haltingly into the mobile arena, Skinner concluded, “U.S. retailers don’t want to miss out on wireless like they did in 1995 with the Internet. The smarter retailers see this as an opportunity to build more sophisticated customer relationships.”