BELK’S WIRELESS ENDEAVOR
Byline: Valerie Seckler
NEW YORK — Belk Inc. might have arrived late to the e-tail party, but the chain of 230 department stores east of the Mississippi has suddenly burst to the forefront of wireless shopping in the U.S.
The $2 billion retailer has done so by harnessing bar-code scanners to drive real-time construction of online bridal registries for its betrothed customers. Now, if a bride or groom wants to add an item they see in any Belk’s store to their online bridal registry, at belk.com, they can simply point a hand-held Telxon scanner, provided by the store, at the item’s bar code, enter the desired quantity, and the product would be added to the couple’s e-registry in real time.
As a result, cybershoppers seeking access to a bridal couple’s online registry at Belk’s will be able to view up-to-date gift information, whether visiting the Belk Web site from home, work, or one of the Internet enabled Great Gifts kiosks at 156 of Belk’s stores in the Southeast and mid-Atlantic. Roughly 186,000 items are currently available via Belk’s e-registry. Plans call for the store’s entire assortment to be made available online, with the early focus on mounting boutique-like ranges of merchandise, based on special events in people’s lives, such as birthdays, anniversaries and holidays.
“What we’re seeing at Belk’s is sort of a first-generation effort in wireless shopping,” observed Tom Rubel, a partner in PricewaterhouseCoopers’ global retail practice, who, along with Geoff Wissman, a principal consultant at the professional services firm, published research in October entitled “Mobile Devices — An Evolution and a Revolution.” Rubel and Wissman are advising e-tailers aiming to launch mobile-commerce in the U.S. to focus first on customer-service plays — like the Belk’s initiative — then on mobile marketing messages, and finally on what they term true m-commerce, or transacting purchases for consumers via wireless devices.
The consultants are offering this counsel, Rubel explained, because of the numerous impediments to m-commerce in the U.S. that are expected to keep “true” m-sales south of $100 million here until 2008. Merrill Lynch, for one, is estimating consumer purchases transacted via mobile devices will reach around $122 million in 2008. It’s not a huge dollar figure, but still implies a relatively rapid ramp-up, according to the Merrill Lynch estimates, from sales of $240,000 last year to a projected $1.2 million this year, $23 million in 2004, and $67 million by yearend 2006.
By comparison, overall revenue — including online advertising, entertainment and commerce sites that charge user fees, financial services and business applications — emanating from m-commerce in Europe is expected to reach $21 billion by yearend 2003, with true wireless commerce accounting for approximately $3.2 billion, or 15 percent, of that volume, according to Durlacher, a U.K. researcher of emerging technologies.
Europeans access the Web via mobile devices the way Americans go onto their personal computers.
Of Belk’s mobile setup, Rubel noted: “It’s not an application running on a consumer-owned device, but it is still an example of how wireless can make a meaningful contribution to shopping. When people get married, they need to communicate lots of information. This is a way to do so.
“It won’t be long before we see cell phones with bar-code scanners in them,” he forecast. “You’ll be able to scan, say, the bar code on a Spode dish you’re looking at, and get information not only on that item, but on other colors, similar patterns, care of products and more. A great example of an early wireless shopping application can be found at Best Buy.”
There, he related, salespeople carry scanners running on the 802.11 protocol that capture data off merchandise bar codes and relay that data to a server in the store; the server, in turn, transmits over a small-area wireless network in the store various information about the merchandise and related items to those salespeople, who then can use the input to assist customers on the selling floor.
At Belk, the wireless application’s front-end emphasis is clearly on convenience: When weddings are being planned, couples need to communicate, quickly and efficiently, with many people who are scattered geographically and might otherwise duplicate one another’s wedding gifts. At the same time, Belk has integrated the wireless technology with such back-end operations as customer service and returns-tracking systems — moves that seem obvious, and perhaps even rudimentary, on paper, but represent significant steps integrating the Internet throughout the store, let alone the supply chain.
And in a stroke of creativity, Belk’s retrofitted its wireless shopping system to the chain’s existing mobile inventory control technology, down to the Telxon scanners, a network Belk’s installed during the summer of 1999.
“Belk had already made a significant investment in the infrastructure to support our legacy wireless inventory system,” said Jay Carothers, president of Belk’s e-commerce unit, in a statement provided to WWD. “It didn’t make sense to duplicate this or start over. Blue Martini software was easily adapted [to belk.com] to integrate with our legacy scanners.” Carothers declined comment beyond the joint statement, which came from San Mateo, Calif.-based Blue Martini and the Charlotte, N.C.-based retailer.
While it’s hardly the killer application e-tailers have been awaiting to unleash the potential of mobile-commerce in this country, it nonetheless puts Belk’s among the few purveyors of apparel on the Web that have even flirted with mobile shopping applications. Belk’s early version doesn’t facilitate sales transactions, but observers noted the chain would be able to add it to the existing technology’s offer. Others wading into wireless waters from U.S. shores include A|X Armani Exchange, which began offering m-commerce in August, at armaniexchange.com, via any mobile Web browser — like a cell phone or personal digital assistant — that is based on a wireless application protocol, or WAP, which is the platform employed by many mobile devices in the U.S. Initially, visitors of armaniexchange.com could shop, track orders, locate the nearest A|X store and access Armani’s corporate magazine, ‘Zine, using WAP-enabled browsers. Beginning last October, they also were able to receive targeted, location-based marketing messages, through an arrangement with Internova, an m-business software developer.
Additional mobile shopping applications include that of wireless application services provider GeePS, which sends m-ads to shoppers in an effort to boost customer traffic at traditional stores. Much like the A|X arrangement, this service sends the ads to people using location-sensitive mobile devices in the vicinity of specific malls and stores. The GeePS service was tested last April, here and in San Francisco, and in September it was selected for deployment at Palisades Center, a mall with more than 200 stores.
To use the service, people register on the mall’s Web site or at kiosks in shopping center. Users indicate the stores and types of merchandise categories from which they’re interested in receiving promotional information through their wireless devices.
While wireless applications have yet to proliferate in the U.S., in Rubel’s view, we’re “a lot closer than people think” to seeing mobile-commerce take hold here, even to the extent it’s currently caught on in Europe and Japan. The retailing consultant is projecting this will probably happen in 2004, but that’s a virtual eternity in the dimension of Internet time. How far had all of e-tail evolved, for example, a scant three years ago?
But in Rubel’s estimate, it’s simply going to take some time before enough consumers own Net-enabled devices, equipped with scanners, to spur wireless shopping, and, m-purchasing in particular. Also key, he said, will be a couple of other catalysts that still need to be developed: bigger screens on Net-enabled wireless hardware, including cell phones, pagers and PDAs, and faster Web download times for those users.
“Certainly, the small size of most screens is a problem,” Rubel said of the current generation of wireless devices in the U.S. “It’s tough to be impressed by viewing something on a five-line screen on a cell phone. Late this year, we’re expecting to get wireless devices on the U.S. market with twice the speed of regular modems [114 kilobytes/second]. Third-generation technology, which transmits data at speeds comparable to current DSL technologies, will probably not be widely available here until 2004.”
When wireless shopping starts to become a part of everyday life, though, users may feel at first like they’ve jumped into something like an old “Dick Tracy” comic strip: The mobile devices may call to mind those two-way wrist radios used by Tracy and his lieutenants, if they shape up the way Rubel’s expecting.
“They won’t just have bigger screens, or get you to the Web quicker,” he predicted. “They will function as e-wallets. Users will be able to scan an item they want to buy, point to a cash register with their wireless device and have their e-wallet debited.”
In addition, Rubel said, the devices will function as keys, locking and unlocking a range of objects from a home to a car.
For all of those developments to unfold, however, will also take some sort of application Americans are clamoring to carry around with them so that they can connect to the Net without wires. And Americans are yet to be convinced. Fully 45 percent of mobile phone users in this country have “no interest” in mobile phones that can convey data services, from news and weather, to shopping and e-mail.
For now, as Rubel acknowledged, “The U.S. is way behind Europe and Japan in mobile Internet technology. In Japan, [applications for] the online entertainment/game sector sprung it. In the U.S., it could be the same application that spurred the PC market: e-mail.
“As we replace the first-generation cell phones here,” he added, “short-messaging systems, like AOL’s Instant Messenger, could do it. We still don’t have the killer ‘app.’ ”
Digital Snapshot: Mobile Commerce
100 million: Americans who carry a mobile device, such as a cell phone, pager or PDA.
475 million: Users of mobile devices worldwide.
15 million: People who access the Internet via mobile devices worldwide.
44%: Share of Net-enabled mobile phones purchased in U.S. during second quarter of 2000.
5%: Share of Net-enabled mobile phones purchased in U.S. during second quarter of 1999.
31%: Portion of m-phone users in U.S. interested in receiving e-mail services via mobile phones.
27%: Portion of m-phone users in U.S. who would use them to access business applications.
23%: Portion of m-phone users in U.S. who would access Web sites via mobile phones.
13%: Portion of m-phone users in U.S. who would use mobile phones to shop online.
$122 million: Projected revenue from purchases transacted in U.S. via m-commerce by 2008.
$1.2 million: Projected revenue from purchases transacted in U.S. via m-commerce this year.