Evan Schuman's StorefrontBacktalk

If mobile connectivity is limited, however, that app might not work at all. Or it might work just well enough for a customer to signal her position but not receive the message with the coupons while she’s still in the store.

WiFi faces a different set of problems as a basis for mobile applications. More channels are available for WiFi, and WiFi’s limited range might allow a retailer to use lots of WiFi access points to blanket a store with a WiFi network. But while taxpayers shell out for GPS and mobile users pay their own phone bills, it’s the retailer who pays for that blanket of WiFi: access points, network cable, switches and servers.

Meanwhile, WiFi just keeps getting more popular as an easy way to set up quick, ad hoc networks. That’s why Steve Jobs’ iPhone demo kept crashing. “There are 570 WiFi base stations operating in this room,” Jobs told the crowd after Apple engineers identified the problem. “We can’t deal with that.”

But WiFi also has security and, much more importantly, security perception issues. “Do you think your customers are ready to acquire, trust and provision your WiFi network on their smartphone device when they enter your store?” asked our cynical reader. “Are you going to offer generic Internet access in your store via WiFi (become a hotspot) or whitelist to only your offers?”

All of these details are part of the IT foodchain of control. Retailers have neither control nor influence over GPS. If it stops working, there’s little a retailer can do about it. One small step down are carriers’ cellular networks.

If an E-Commerce site is anticipating huge traffic and bandwidth demands, the IT department can do quite a bit to secure more bandwidth and prepare for the deluge. But if an upcoming event is likely to overload the Sprint, AT&T or Verizon networks in one part of town, there’s precious little that can be done. If it’s a big enough deal and there’s plenty of time, very expensive arrangements can—in theory—be made. But it’s unlikely.

Retailers can, however, have a huge amount of control over WiFi. But there’s still the hurdle of getting consumers comfortable with using your WiFi network.

Ultimately, the best way to deal with the M-Commerce paradox is via mobile moderation. If you’re testing a mobile payment method, you do not want huge audiences pouring in at once. Keep your marketing efforts to a low level, perhaps allowing some blog references and pamphlet distribution work their magic.

When you invariably have to go larger, make sure the marketing department uses all of its tricks to spread out the load. E-mail blast offers that are time-limited and stagger the invites. Perhaps do only one department and push only limited items. You don’t want 5,000 customers descending on your pilot store from 1 to 2 P.M. You want them spread out over days or even weeks.

Those same marketing tactics can also gently nudge customers into becoming more comfortable with WiFi, by potentially offering guarantees of security coupled with strong financial incentives to use it. Perhaps a 15-percent discount for WiFi purchases, compared with only 10-percent for direct? If you can nudge customers onto WiFi, you have the ability to build more infrastructure yourself—something that’s not an option if you depend on mobile networks.

None of this makes wireless retail apps impossible. It just makes it more challenging–as long as you keep your enthusiasm in check. Just don’t try ignoring physics.