Retail in the Digital City

Conventional high street retailers face a multitude of challenges if they are to survive and thrive. Some of these difficulties arise from structural and economic issues; others may be sociological and demographic. However, to thrive, retailers must be perceived as being competitive, and must adopt innovative and invigorating strategies to maximise the potential of their situations while offsetting the limitations. In this paper, it is proposed that a judicious combination of low-cost Information and Communication Technologies (ICTs) could enable small retailers to harness the benefits of the information society and provide services congruent with the digital city concept. As an illustration of the issues involved, pertinent results from a systematic end-user evaluation of EasiShop are discussed. DOI: 10.4018/jebr.2012070102 International Journal of E-Business Research, 8(3), 18-32, July-September 2012 19 Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. • Small stores are a hub for communities: As well as being a commercial concern, stores are frequently a place for social interaction due to their proximity to local residents. • Small stores are vital for the disadvantaged and socially excluded: Small stores, particularly grocery stores, help address the needs of disadvantaged groups including the elderly, the socially excluded and those with limited mobility. While it may be conjectured that the internet offers a solution for some members of those groups, it is interesting to note that, in the case of low-income Americans at least, such people are less likely to trust e-commerce environments, and thus not use them (Corrigan, 2008). • Small stores enhance consumer choice and access: While choice and access has improved for car owners, other groups have not been so fortunate. Thus a variety of local stores increases choice and access at a local level. • Small stores create consumer value: Though small stores cannot hope to compete directly with the many national and international companies, nevertheless, they can provide a service and product range more tailored to the needs of the local population. Thus a thriving small retail sector may be perceived as fundamental to maintaining a healthy social fabric, as well as fostering a degree of innovation and enterprise (Paddison & Calderwood, 2007; Smith & Sparks, 2000). Yet small independent retailers face many challenges, including meeting the continuously changing expectations of local consumers (Lee et al., 2008). Challenges for Independent Retailers Ultimately, the key challenge for small scale independent retailers is to identify strategies for obtaining new business while all the time maintaining their existing customer bases. In the UK, many independent retailers have failed in this task for a variety of reasons, resulting in some high streets being dominated by popular chain stores, and characterised by an extraordinary level of uniformity and poor consumer choice. The term Clone Towns has been used to describe areas where this has occurred (Conisbee et al., 2004). Indeed, it has been forecast that some kinds of retailers including groceries and newsagents amongst others may not survive beyond 2015 (APPSSG, 2005). To compete, retailers must build competitive advantages based on their close relationship with their customers, and develop a capacity to adapt quickly and flexibly in response to changing circumstances (Megicks & Warnaby, 2008). Furthermore, it is important that retailers are conscious at all times of what motivates shoppers. Such motivations include (Wagner, 2007): • Shopping pleasure; • Frictionless shopping; • Value seeking; • Quality seeking. Shopping may be perceived as a multidimensional construct. The term hedonic shopping is occasionally used to encapsulate additional concepts including window shopping, social interaction, aesthetic architecture and so on (Clulow & Reimers, 2009). Some discerning retailers will of course be acutely aware of this, and may have factored such issues into their retail strategy in so far as their situations allow. Nevertheless, retailers should not be immune to developments in Information and Communication Technologies (ICTS), including mobile technologies, in their various facets. However, the opportunities that mobile and other pervasive technologies offer have not been harnessed for reasons that may be speculated on. In parallel, developments on so called Digital Cites continue unabated. Digital cities (Calabrese et al., 2008; Van den Besselaar & Koizumi, 2005) represent a fusing of the physical and virtual cityscapes into a single seamless information space. The digital or smart city seeks to integrate the vari20 International Journal of E-Business Research, 8(3), 18-32, July-September 2012 Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. ous facets of an effective functioning city. Such facets might include: traffic monitoring, public transportation, utility distribution, health service management, leisure and tourism, entertainment, e-government, emergency response and of course commerce. These services need to be truly integrated into a holistic system, which is (part) accessible to the general public. The digital city should support its inhabitants in the conduct of their everyday tasks thereby delivering an enhanced quality of life making mundane and routine tasks easier and less invasive into their quality time. The twin developments of digital city infrastructures and mobile computing technologies have significant potential to enable small retailers contribute to and benefit from the information society. Yet many barriers remain to be overcome. Rather than waiting for digital cities to materialise, opportunities exist for retailers to avail of the current stateof-the art technologies technologies that may be mainstream within a short period of time. Mobile commerce (m-commerce) (Ngai & Gunasekaran, 2007) offers one key avenue through which such opportunities may be availed of. DEVELOPMENTS IN MOBILE COMMERCE Mobile computing is experiencing burgeoning growth -the first quarter of 2010 saw data traffic surpass that of voice on mobile networks around the world for the first time (Wortham, 2010). In addition, location based services appear to be attaining critical mass; revenue is expected to reach US$10.3 billion in 2015 (Pyramid Research, 2011). In spite of this, the corresponding development of mobile commerce has remained stubbornly sluggish. Various factors contributing to this state of affairs have been mooted, including quality and reliability of prevailing wireless infrastructures and a lack of suitable business models (Varshney, 2008); others include trust (or lack thereof), inadequate user interface features and lack of awareness -issues that are observed across all kinds of mobile applications. Many of these factors, for example, limited hardware capabilities, restricted user interface, and intermittent network coverage are perhaps becoming less salient as the technology matures. One strategy to counteract these restrictions is to adopt some level of intelligence into delivering effective mobile commerce services; specifically, the notion of agency has proven to be particularly attractive in realising services that are adaptive, personalised and context-aware (Shen et al., 2010). Furthermore agents have been expensively harnessed in standard e-commerce solutions (Lin, 2008; Fasli, 2007; Chen et al., 2008; Kowalczyk et al., 2002). In the case of m-commerce, one of the earliest (and most influential) research efforts of this kind was Impulse (Youll et al., 2000). A cornerstone of the Impulse vision was concerned with the notion of context. By deploying a suite of agents along with a centralised product and services database (termed the Wherehoo Server), the retrieval of products and services is enabled by garnering pseudo-English location-specific search terms from the user (for example, Breakfast, 0.2km) and matching those with the current location (enabled by GPS). One convenient means of delivering mobile commerce that is robust, scalable and inductive to competitive practice is that of auctioneering. A wide range of auction mechanisms have been incorporated into electronic commerce solutions over the years (Anthony, 2009). The mobile reverse auction agent system (MoRASS) (Shih et al., 2005) involves the utilisation of intermediate agents which mediate between the buyer and the sellers and execute bidding asynchronously and autonomously. Security is central to MoRASS and a novel double encryption key chain technique is included. Auctioneering is governed by a novel Reverse Vickrey Auction Protocol (RVAP), the goal of which is to achieve unconditional bid privacy. It is clear that much of the research has been technology driven. More recent efforts have strived to develop prototypes with a consumeroriented bias. The MAGICS vision (Chen et al., 2008) is one such example. Participating stores International Journal of E-Business Research, 8(3), 18-32, July-September 2012 21 Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. are encouraged to establish special servers to deploy mobile agents at their own websites. By using a mobile phone, the shopper can specify buying requirements to a proxy server that results in a set of mobile agents being generated to fulfill a particular shopping task. Other efforts have adopted a business-centric approach. Havana (Mahmoud & Yu, 2006) is an agent platform which permits the deployment of agents useful in an m-commerce context. A centralised facility permits the creation and management of shopper agents. Termed the Gateway, this server acts as a conduit between the user and the wider commercial environment. The user connects to the Gateway using a customized mobile application and the interface allows the user to verify current progress, location and whether certain tasks have been completed. The initiative encompasses a novel business model, whereby both sellers (i.e., stores) and buyers benefit. Each participating store agrees to install the necessary computer hardware and software systems which will allow mobile agents from the Gateway to run on that store’s website. In return, the Gateway operator agrees to let each store insert one relevant advertisement into each mobile agent’s search results. The user, meanwhile, is provided with a useful (and free) value-added service. Not all research in the field is dependent on agent-based technologies, for example, the Mobile Shopping Assistant as described by Wu and Natchetoi (2007). This mobile shopping assistant is centred around a mobile client and offers a novel approach in that the real-time compression and decompression of embedded XML data is used to deliver, it is intended, a more speedy and robust mobile shopping experience. Santangelo et al. (2007) describe a PDA-based shopping assistant which incorporates a spoken natural language interface delivered over a Bluetooth link. The structured voice ontology format VoiceXML is used in conjunction with CYC (Lenat, 1995), the knowledge base which attempts to embody everyday common sense knowledge. The objective is that the shopper specifies in their natural language those products which are sought. The shopper assistant then attempts to decipher the request and to find a suitable product match using a database of products specified in an XML structure. Towards Pervasive Retail Enabling retailers and potential customers to communicate and trade does not demand the use of sophisticated technologies; rather, a select combination of inexpensive and common devices will enable retailers to rapidly deploy a hardware/software configuration that enables them to market a range of digital products and services to shoppers. Cellular networking systems such as 3G are ubiquitous, but come at a price. This must be paid for, but by whom? Shoppers are unlikely to sign up for services that come with a price tag, unless they are well motivated. Wi-Fi is a valid technology choice as retailers can setup their own hotspots quite cheaply, and the running costs are not excessive. A key limitation of this approach concerns the lack of support for Wi-Fi on all phones. As many phones currently on the market increasingly support Wi-Fi, it can be realistically envisaged that this limitation will be overcome in the near future. To determine geographic location electronically, a common approach is to harness either a satellite based technology, of which GPS is the exemplar, or a mechanism that uses the features of a cellular network topology. Though valid solutions, the accuracy of each is unpredictable. Furthermore, the applicability of such systems in narrow streets and high-rise neighbourhoods is questionable, as Line-ofSight (LoS) conditions are essential to their operation. An alternative is to use a short range communications technology for positioning and data communications. Though it does not give an explicit position, the very fact that a shopper can see the signal indicates that they are within 10 to 100 meters or so of any shop that is scanning for potential shoppers. The ubiquity of sophisticated mobile devices with integrated communications and positioning mechanisms, or Smart Mobile Media Devices (SM-MDs) (O’Reilly & Duane, 22 International Journal of E-Business Research, 8(3), 18-32, July-September 2012 Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 2010), has inevitably led researchers to explore their potential in the retail sector. Likewise, other pervasive computing technologies show significant promise. Harnessing these technologies to augment the shopping experience has led to the term pervasive retail being coined, and a number of prototype solutions have been documented in the research literature, see for example (Strohbach & Martin, 2011; Kourouthanassis & Roussos, 2003; Yih et al., 2005; Sellitto et al., 2007; Quercia et al., 2011). However, many major retailers have released mobile applications so as to connect better with their customers; likewise, the number of retail applications for iPhones and Android continues to grow. But for the small retailer, how to avail of this shopping paradigm shift remains an open question as many remain unprepared (Bennett & Savani, 2011). THE EASISHOP EXPERIENCE EasiShop demonstrates how a judicious selection of technologies can enable retailers to reach potential customers at a pivotal moment -when they are physically near their premises and desire to acquire some merchandise that is in stock. It offers a mechanism of connecting to potential customers in an ad-hoc fashion. Furthermore, it enables competition between retailers in an open and transparent fashion. Potential shoppers must be prepared to share their shopping requirements, and retailers must be prepared to participate in an EasiShop hotspot network. A detailed description of EasiShop may be found elsewhere (Keegan et al., 2008); however a short summary of its features and modus operandi is provided here. In summary: EasiShop is a mobile shopping system. It allows a prospective shopper to select browse a list of products using their mobile handheld device and to indicate products of interest. Participating retailers are incentivised to integrate EasiShop requirements with existing store stock control infrastructure. Details pertaining to current stock held by a particular retailer are exposed to the shopper through a Bluetooth communications array, intended to be installed at the entrance of the retailer’s premises. Should the shopper come within Bluetooth operational proximity of a particular retailer’s radio array (called a hotspot), communication may occur between the user’s mobile device and the retailer’s hotspot controller. This communication occurs without the user’s intervention. As a result, the retailer may offer the shopper a deal for any items in stock that match those on the shopper’s list. In other cases, a time-limited auction ensues, during which other interested participants (retailers) vie for the shopper’s business. This occurs at the EasiShop host on the internet, conventionally referred to as the MarketPlace. To illustrate the EasiShop construct further, three key components to the EasiShop architecture, as outlined in Figure 1, are now considered.