U.S. retailers expect surge in purchases through hand devices

Mobile telephones, data receivers lead portable commerce

January 16, 2001|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

NEW YORK - Hand-held wireless devices will play an increasingly important role in retail in the near future, giving consumers another way to shop besides in stores, through catalogs and on the Internet, experts predicted yesterday during a national retail trade show.

By 2004, the number of mobile phones, "personal data assistants," such as Palm Pilots, and combinations of the two are expected to surpass the number of computers with Internet access, consultants with Accenture, the former Andersen Consulting, said during a kickoff session at the National Retail Federation's 90th annual convention at the Jacob Javits Convention Center.

And more and more, consumers will rely on those devices to do their shopping. That could mean everything from ordering a new big-screen TV scanned from an advertisement to locating the right size sweater when it's out of stock in a store.

For now, "m-commerce," or mobile commerce, is largely experimental among U.S. retailers and their customers, said Steven G. Skinner, a partner with Chicago-based Accenture. But that will change rapidly, he predicted.

Already, consumers in Japan and Europe, which have the telecommunications infrastructure in place, are far ahead of Americans with m-commerce, Skinner said. Scores of consumers, mainly young people, use the devices to send e-mail, chat on the phone and buy compact discs and books, Skinner said.

Retailers such as Best Buy, Circle K convenience store chain and Sears Canada are either using or experimenting with wireless devices, hoping to save time and money by having their employees do everything from receiving merchandise to helping customers in the store find compatible products.

Another experiment is underway at the 200-store Palisades Center in New York, where retailers such as Gap Inc., Anne Taylor, Target, Home Depot and Victoria's Secret alert shoppers to promotions via cellular phone. Barnes & Noble booksellers is offering sample audio clips on hand-held devices.

In a test at nine of its restaurants, McDonald's is letting customers pay for Big Macs using mobile speed passwords, through cellular phones, without a phone call. Royal Ahold NV, the owner of Landover-based Giant Food Inc., allows similar payment of groceries through mobile phones at some of its international supermarkets.

The ability to interact and transact with the customer at the point of need will revolutionize the customer experience, said Jeff Luker, a managing partner for North America Retail East for Accenture.

"Here we have the phone replacing the need for a wallet," Luker said. Plus, "it's a sales assistant that never leaves their side."

But putting the technology to use won't happen over night, he said. It will take time for customers to feel comfortable with the technology and for prices to come down.

"Our experience with m-commerce has been challenging," said Brad Anderson, president and chief operating officer of Best Buy Co., which sells hand-held devices.

Some of the hand-held devices popular in Japan haven't worked as well in the United States, where there is greater penetration of computers, he said. The electronics chain is now testing hand-held devices in some stores, where employees use the devices to check stock, print out maps and complete sales.

Luker compared the current status of m-commerce to shopping on the Internet five years ago.

"When e-commerce was making its debut, there were a lot of skeptics," Luker said. "The technology was cumbersome. Computers were expensive. Consumers were understandably dubious. They didn't understand how the Internet worked and what to use it for."

Skinner predicted that traditional retailers won't let the purely Internet retailers get an edge in m-commerce the way some, such as Amazon.com did with e-commerce. "This will be more of a race," he said.

The expected growth in m-commerce is part of a new approach that retailers will need to take to deal with consumers who have less time and patience for shopping and more choices than ever, said Bruce Westbrook, a partner with Deloitte Consulting.

"It will require becoming all things to all people all the time," by creating a shopping experience that's virtual, interactive and personal, he said.

Deloitte expects that new technology - not necessarily through handheld devices - will allow retailers to keep track of products a consumer usually buys, and remind him if he inadvertently chooses the wrong one or needs to replenish something. For instance, a home improvement chain could lead a shopper through a virtual demonstration of a project, showing him the tools he'll need and where to get them at the store. Westbrook said.

"It is a different way to think about the shopping experience, and it can be applied to any type format, by understanding what people buy and why and taking action," he said.

Some of the ideas sounded good, but won't work in practice, said Cathy David, general manager for store brand sites for Target Corp.'s Internet arm.

"The concept of marketing to an individual is attractive," but doing so might prove too costly to keep a retailer viable and profitable and also violate a customer's privacy, David said.

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