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Ubiquitous computing (also called pervasive computing) encourages the seamless integration of technology in the environment, allowing users to...

  • From the consumer's perspective, what are the pros and cons of using ubiquitous retailing?
Ubiquitous computing (also called pervasive computing) encourages the seamless integration of technology in the environment, allowing users to interact with it naturally. Ubiquitous retailing is an application of ubiquitous computing. The pervasive nature of the interaction allows users to radically alter the mechanisms of ordering goods. As everything could potentially be transformed into a point of sale, the consumer would constantly be surrounded by spending opportunities that are accessible without having to visit a website, login, add the products to the shopping cart and then checkout. Established relationships, coupled with semi-automated ordering mechanisms, could significantly alter the shopping experience. The convenience factor could easily be further strengthened, if one allows the environment itself to assume some control of the shopping. For example, if a light bulb is burnt out, then the chandelier could order one by itself. To some extent, we are already looking at this phenomenon: mobile commerce and location-based services. In scenarios like the above, the customer is still largely in charge of the transaction and purchasing decision. In the future, this may change, as pervasive computing gradually finds its way in the environment and a wider-range of purchasing opportunities become a reality. At that point, rule-based purchasing may become an attractive proposition for consumers, who could program the points-of-sale to automate purchasing based on certain conditions (e.g. the chandelier would order light bulbs only when a third of them were burnt out). Grocery shopping is ideal for this kind of purchasing. Most items can be restocked with minimum associate risk: not much is lost if you end up ordering a bit more milk and bread than you needed. Such automated purchasing, based on rules, will have a number of significant implications for both the consumers and the retailers. Goods may be classified as commodity items whose purchasing could be delegated to the technology and items that the consumer feels require personal attention when purchasing. For the first type of items impulse buying may suddenly become a thing of the past, as the consumer does not need to worry about having enough milk in the fridge again. Which products end up in these two categories will depend on the consumer and his special needs and requirements. This will probably result in consumers being positioned between the two emerging extremes: those who would not mind automating as many of their purchases as possible and those who would prefer the ‘traditional shopping’ and engage in every step. From the retailers’ point of view, ubiquitous retailing may spark a chain reaction of changes, as it will not get to engage with the customer in the same way. Data mining techniques could potentially generate very detailed customer profiles. In order to take advantage of these, retailers would need to rethink their customer relationship management strategies and how they market their products to the consumer. Whether
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convenience justifies such extreme profiling, at least with today’s standards, and whether balance between privacy and ease of purchasing can be achieved, is something that is yet to be seen. Ubiquitous retailing, by definition, will aim to seamlessly integrate the point of sale with the environment; ease of use will have to be an intrinsic characteristic of the new systems. The specialization of point of sales to perform well-defined purchasing would also allow for speedier transactions, enhancing the convenience factor. In fact, transacting models themselves may be significantly affected. Instead of performing one-off transactions for many items, goods may be purchased one at a time or placed on temporary shopping carts, either on the consumer’s or the retailer’s side. An example of such an approach can be seen in the ‘Intelligent shelves’ case (Metro, 2006), which guarantees that customers no longer face empty shelves. The products placed in the system are equipped with Smart Chips that contain information relevant to the product itself or its logistic processes. A RFID reader integrated into the shelf automatically recognizes when an item is removed by reading the product information. Should stocks diminish, the system can take the necessary action. The following discusses Metro Group’s RFID-based Intelligent Store Project. METRO GROUP METRO GROUP is one of the largest and most international retailing companies. In 2007, the Group reached sales of around €64 billion. The company has a headcount of some 280,000 employees and operates over 2,200 stores in 31 countries. The METRO GROUP's performance is based on the strength of its sales divisions which operate independently in their respective market segment: Metro/Makro Cash & Carry - the international leader in self-service wholesale, Real Hypermarkets, Media Market, and Saturn – European market leader in consumer electronics retailing, and Galeria Kaufhof department stores. Intelligent Applications to Inform and Advise Since 2004, the METRO GROUP has used RFID throughout its entire supply chain and in its warehouse management. Within the context of its Future Store Initiative, the retailing company has been testing innovative applications for its front stores for years. Thanks to the pilot project at Galeria Kaufhof in Essen, customers can now enjoy the extensive benefits and possibilities of RFID technology. In the Gardeur Shop at the Essen outlet, Smart Dressing Rooms, Shelves and Mirrors provide a
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Ubiquitous Computing assignment.docx

Running head: UBIQUITOUS COMPUTING Ubiquitous Computing
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Institution UBIQUITOUS COMPUTING 2 Consumer perspective is a term used by organizations to assess whether they meet the...

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