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Retail Mobility: Securing the Entire Supply Chain

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Retail Mobility: Securing the Entire Supply Chain

Table of Contents

Early Days ............................................................................................................................. 4

Mobile Overlap ..................................................................................................................... 5

The Cloud Knows the Customer ........................................................................................... 5

Easy to Buy Apple ................................................................................................................. 6

Competing Online................................................................................................................. 6

Speed of Service ................................................................................................................... 7

No to BYOD? ......................................................................................................................... 7

The Cost of Security .............................................................................................................. 8

Rolling Out MDM .................................................................................................................. 9

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For many retailers, mobile devices are simply a call to boost their marketing and management programs. Others have embraced the tactical promise of mobility by enabling an untethered point of sale. Those who are further along have a clearer understanding that a complete mobile device management (MDM) program is necessary for enterprise-wide mobile success and security. Yet, in both cases, research shows that not even half have a roadmap in place before they start down the path of mobility.

Retailers are clear on the benefits they hope to reap by leveraging mobility as exhibited in a recent Aberdeen Group poll. When talking to retailers a clear majority expect mobility to improve the in-store experience through self-checkout to shorten lines and deepen loyalty to the brick-and-mortar store. So many retailers are enamored with this promise that 41% of respondents expect to add mobile POS capability in the next 24 months.

Along with all the benefits, there are many risks with mobility in retail. Centralized control over devices is critical to secure customer data and be compliant, update systems and install apps, track the unauthorized installation of apps, and wipe or recover the data from any lost or stolen devices.

Early DaysIn all industries, interest in mobility is growing. For many enterprises, the timing is right to create a next-generation mobile strategy. Although many CIOs have already implemented mobile technology, much of it has been tactical in nature. CIOs and their teams should now pursue a more strategic approach to mobile capabilities. If not, they risk making the wrong long-term investments, or, more importantly, they may miss emerging customer needs that are to become commonplace.

In retail, “We are still in the earliest days of implementation,” says Andrew Borg, Research Director, Enterprise Communications, Mobility Center of Excellence, Aberdeen Group. Aberdeen’s Mobile Retail study report, only 38% of retail respondents were at some stage of mobile retail technology or mobile channel adoption, but it’s a number that is constantly growing.

When it comes to creating a strategy, according to the RIS News and Mobile Enterprise report, “Mobility in Retail,” 47.8% of retail decision makers responding to a 2012 survey said they developed their mobile strategy/roadmap before implementing the technology; 39.1% reported that they are simultaneously building mobile initiatives and developing their guiding roadmaps; and 13% are moving forward without any formal strategy.

69.8% 49.1% 43.4% 35.8% 32.1% 30.2% 28.3%

Functionalities Retailers Plan for their Network-Enabled Tablets

Inventory/ProductLookup

POSAccessing

Store Website

Loyalty Program Access

Clienteling/Guided Selling

InventoryAudit

TaskManagement

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Topping the list of functionalities the retailers plan for their network-enabled tablets was inventory/product lookup (69.8%); POS was next (49.1%); then came accessing store website (43.4%); loyalty program access (35.8%); task management (32.1%); inventory audit (30.2%); and clienteling/guided selling (28.3%).

The study also showed retailers’ interest in more closely integrating their mobile deployments and enterprise systems. Among respondents who preferred rugged, network-enabled tablets, 72.8% said their top priority was that the tablet’s operating system be enterprise-friendly. Apple was first in this space, chosen by 71.7%. Windows OS gained ground, picked by 58.5%; followed by Android at 49.1%.

Mobile OverlapRetail stands apart from other industries in that the enterprise and consumer mobility needs can overlap. “They are not only focusing on the mobile workforce, but they are also considering how to deliver mobile apps to their customers to enhance the experience in the retail shop, or to support marketing campaigns,” says Monica Basso, research vice president, Gartner.

Starbucks and the Apple Stores illustrate just how retailers must use mobility management differently from other businesses to take advantage of the devices of customers and employees, Borg says.

The Cloud Knows the CustomerStarbucks recently acquired Square, which was started by one of Twitter’s founders, and enables anyone with a smartphone to make a credit card transaction. “This is a disruptive change for small business,” he notes. Square uses a small financial card magnetic strip reader that fits in the audio jack of the smartphone, with an app, and data services and ecommerce behind it.

At Starbucks, the plan is to integrate the Square retail transaction system with the Starbucks loyalty program and POS system. Customers who opt in and walk into a Starbucks with Wi-Fi on their smartphone enabled will have their photo and past preferences displayed on the POS monitor. The barista can greet them by name, ask if they want their usual Starbucks order. It will be charged to the Square account, and then a personal credit card.

“That transaction is the future of retail. The whole notion is frictionless commerce. You don’t have to bring out a credit card. You don’t have to sign anything. You don’t have to prove your identity,” Borg says. There is a two-factor authentication. “You’ve already been authenticated by Square and you’ve been recognized on premises by Starbucks. As long as the customers look like they do in the photo, the two systems come together, and they are authenticated for financial card transactions. “They’ve taken that whole messy process and they’ve made it seamless for the customer,” he notes.

Aberdeen has coined a word for this: “SoMoClo,” for social-mobile-cloud. The Starbucks example fits because all the data involved comes from the cloud. It wouldn’t be possible at all without mobile, and the social component derives from the loyalty program, which is about the customers’ likes, dislikes, purchase history and transactions. “It’s you as a person. That’s an aspect of social,” Borg says.

That transaction is the future

of retail. The whole notion

is frictionless commerce.

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Easy to Buy AppleThe Apple Store shows how mobility management can facilitate employees’ use of mobile to better serve customers and improve the efficiency of the retail shop. They are using iPhones and iPads instead of fixed POS terminals. “You can now buy products online at Apple.com, and go to your Apple store and pick them up.” And anywhere in the store, any employee can accept a credit card for a purchase, Borg notes.

“This melding of offline, online; off premises, on premises—mobile makes that possible. Without mobile, retail would be like was it in the late ‘90s,” he adds.

The Aberdeen Mobile Retail 2011 report also shows Home Depot as an example where the consumer and enterprise overlap. The mobile program is both customer and employee facing. It includes a downloadable mobile app, mobile web and pull-text messaging.

For customers, the mobile app allows them to interact with the retailer in whatever manner they prefer. They can call the contact center, search FAQs, email forms, and participate in a live chat from within the mobile app, according to Aberdeen.

For the enterprise, the mobile chat function will help increase mobile conversion rates, and positively impact customer satisfaction. Mobile chat staffing will be part of the existing contact center, and training is planned for how to best interact with a live chat customer who is using a mobile device, according to the report.

Competing OnlineInternet competition is a challenge facing retailers that many other businesses don’t encounter. “What has changed with retailers over the last few years is the embrace of mobile as a technology that can help them compete against online retailing, which overall is the retailers’ biggest threat,” says Dan Shey, Practice Director, Mobile Services, ABI Research, New York. “The two big initiatives by retailers are development of a mobile website and retailer branded mobile apps, and equipping sales people with mobile devices,” he adds.

The creation and launch of digital properties—the mobile web and apps— is driven by retailers accepting that customers will use their smartphones to shop and perform price checks on sites like ShopSavvy while in the store. “With an optimized website, but more importantly a mobile app, retailers can extend their presence to mobile and build stickier relationships,” he says.

Retailer mobile apps can understand the shopper’s location to send the customer targeted alerts for products and promotions, and even allow payment using the mobile phone. Other features include storing couponing and affinity program rewards, store location and shopping list data. “For the retailer, the data can be used to craft better offers for mobile app customers as well as understand customer buying patterns by location,” Shey notes.

Two big initiatives by retailers are

development of a mobile website and

retailer branded mobile apps, and

equipping sales people with

mobile devices.

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Shey confirms reports that tablets are becoming the preferred mobile device for retailers to give their employees. “We are seeing a lot of activity with retailers deploying to their store employees media tablets. For some retailers it projects to customers they are digitally savvy, but it also equips salespeople with information to better serve customers. If a customer cannot find a product in a store, a store associate can look it up online, order it for the customer and have it delivered to their home the next day which avoids the customer buying the product from a competitor,” he says.

Some retailers also use smart mobile devices to keep store associates up on the latest chatter on social media about their products and brand. “The other benefit of equipping store associates with mobile devices is for line busting so customers can pay without waiting in the checkout line,” Shey points out.

Speed of ServiceImproved speed of service is a large benefit of mobility, and also relates to tracking real-time inventory and employee efficiency. “When employees have information at their fingertips about individual customer loyalty or transactions—their past buying behavior or preferences, for example—and when they have access to all of the back office information, such as inventory, inbound orders, out-of-stock items, it makes the speed of information almost instantaneous. Whenever the employee needs to address or resolve a question, problem, concern or any need of a customer, that speed of information transforms the relationship. An employee becomes an extension of customer service,” Borg notes.

And there is a correlation between speed of information and customer satisfaction. “When shoppers have so many options to conduct retail transactions, be it online, on their mobile device, on premise in the brick-and-mortar store, improving the customer experience becomes almost a matter of survival for the retailer who is depending on the brink-and-mortar store. So speed of information is directly related to quality of customer experience, and that has an indirect relationship to the profitability of the overall business,” he says. “That’s not a nice-to-have, it’s a must-have. It becomes a competitive differentiator.”

No to BYOD?The debate over BYOD has been a short one thus far for retailers, with many deciding against it. However, in a consumer-driven industry, the argument against the consumerization of IT will be a longer-term discussion. Largely because of data security concerns, retailers are currently providing corporate devices; most are tablets, and some are ruggedized.

“For systems used to run the business, we expect that enterprise liable devices—enterprise provisioned, owned, managed, operated, depreciated—will remain the norm in a retail environment for quite some time,” says Craig Mathias, a principal with the Farpoint Group. “The devices are specialized enough that trying to implement a full BYOD capability, and yet do all the internal things that need to be done, would be difficult,” he adds.

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Christian Kane, analyst, Forrester Research, tends to agree. “For retail floor staff, realistically, we often see that those devices are typically company-owned and managed,” she states. For retail in general, “We see tablets used much more frequently than smartphones for the specific floor staff.”

Nonetheless, employees will still carry their phones, and with consumers trying to connect in stores, employees are sure to as well. This presents a unique dilemma as many retailers, in order to make it easier for consumers to connect, are offering free in-store Wi-Fi access. “MDM can help companies understand how BYOD devices are being used to ensure use does not impact corporate networks or security,” Shey says.

“These days, if a shopper cannot get a wireless signal on your premises, they may be less likely to shop there,” Borg says. Having onsite Wi-Fi for customers is becoming a business requirement. “What that means from a BYOD perspective is those transactions on that guest network need to be entirely shielded or firewalled, or on a virtually separate network from the rest of the retail transactions.”

The Cost of SecurityKeeping track of usage and transactions, along with securing private data, are in fact what’s greatly driving MDM in retail says Borg. Retailers must be compliant to Payment Card Industry (PCI) credit card protection regulations or risk penalties. The financial damage from a lost or stolen device ranges from $10,600 to $461,000 per lapse. That is, if there were 1,000 customer credit card numbers stored on a lost or stolen device, the risk could be hundreds of millions of dollars. “That’s why security is paramount,” he notes.

A log is required that provides an ongoing record of the retailer’s mobile devices and any changes that occur to them. “In part because of PCI regulations, there needs to be a record of compliance. So if something goes out of compliance, one can go back and determine when it happened, and perhaps why it happened, and fix it as quickly as possible,” Borg says.

SOX (Sarbanes-Oxley Act) and FRCP (Federal Rules of Civil Procedure) also require companies to keep records of all employee transactions over any communication media, including voice, text, IM, etc., via mobile devices.

As more controls to ensure compliance are locked down through MDM, more retail-store-level mobility will be possible. “Starbucks was the first major shift in the notion of the retail process that impacts the end customer, but you are going to see more of that coming now,” Borg predicts.

The financial damage from a lost or stolen device ranges from

$10,600 to $461,000 per lapse.

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Rolling Out MDMBorg notes that in 2012, many retailers, especially the “big box” chains experimented with mobility management. He says, “Now they are in the roll-out phase and I expect that to accelerate into the next few years.”

So what does an end-to-end MDM solution look like? MaaS360 from Fiberlink, an IBM company enables retailers to provision, secure and manage mobile devices, apps, and documents—all from a single portal—while minimizing risk to the enterprise. Serving as a comprehensive MDM platform, it enables control of all store and office devices to provide a full view of the state of mobility in an organization. Continuous monitoring, device tracking geo-fencing, and automated actions ensure security and compliance with policies.

MaaS360 also allows retailers to manage any or all of its mobile initiatives including business-critical mobile apps, such as POS, stockroom management, barcode, QR code, supply chain management, inter-store communications and service tickets. This enables a retailer to fill in any mobility gaps, ensure compliance and up the competitive ante.

Through a document catalog, MaaS360 empowers retail operations by providing secure access to business documents such as store promotions, financials, and training material on mobile devices while providing total visibility and control. Each document can have its own security policy and can be distributed to all users, groups, or individual devices.

MaaS360 reports on specific details about mobile device and identifies ones that are out of compliance with enterprise policies. As the BYOD debate continues in retail, it also provides the flexibility to embrace employee-owned devices such as iPhones, iPads and Androids through security policy management should the conversation change.

MaaS360’s cloud infrastructure integrates MDM into overall organization and IT governance programs as there are no servers to install, no complex configurations or infrastructure changes, and no investment in expensive business software.

This will be important as Joe Skorupa, Editor in Chief of RIS News blogs, “Make no mistake about it: in-store mobile devices are a game changer. The impact on business processes and IT systems will be profound, and stores will never be the same.”

The case for MDM is apparent to enable this game change. Skorupa writes, “Obstacles still need to be overcome to enable the mobile device rollout through retailing. Issues like wireless network management, security and breakage/loss need to be resolved. And these are just the tips of the iceberg…But there is no doubt retail is entering a new era where virtually every employee … will use a smart device as a normal part of their jobs.”

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MaaS360 allows retailers to manage all

of their mobile initiatives including

business-critical mobile apps