With fast mobile broadband, low latency, edge computing and the Internet of Things about to become a reality thanks to 5G, what this mean for the retail sector?
The retail landscape has been rapidly evolving for the past decade thanks to e-commerce and more recently, m-commerce. As retail channels have diversified and as retailers have moved increasingly to providing omnichannel experiences, how will 5G impact on this sector?
What is clear is that data – much of it highly personalised to groups or even individual shoppers – will become a critical component of what retail success looks like in the medium term. Consumers are also looking for new experiences from retailers to engage them in new relationships and conversations. Here, 5G will be a crucial enabler of these new experiences, which will invariably be delivered by the mobile digital devices all shoppers now carry.
All of the technologies that 5G will enable, including AR and VR, will be joined by more subtle communications which will include interactive mobile apps, personalised signage across the physical retail space. Here, IoT will have the most impact. Shoppers, when entering a store, for instance, will see personalised communications that will connect them to highly individualised recommendations.
The value of 5G to retailers could also be substantial: According to research from Barclays Corporate Banking, 5G could boost the UK’s economy by up to £15 billion annually. Sean Duffy, Head of TMT at Barclays, explains: “The rollout of 5G offers a huge opportunity for the UK. We see massive potential for business growth, which ultimately delivers a positive knock-on effect for the whole economy. While the government and network providers are already working hard to introduce 5G in the UK, we found that businesses do not yet have enough clarity about how they will benefit in the long run. What’s more, nearly four in ten business leaders still aren’t entirely sure what 5G is.”
Retailers can see that their customers want to use more advanced technologies to enhance their shopping experiences. 5G will have the performance and versatility to enable retailers to create and deploy these innovations.
Says Jason Wells, Vice President and General Manager EMEA at Cradlepoint: “Facial recognition technology with video analytics can recognise a customer’s face and provide truly personal offers through connected digital signage based on that individual’s preferences and shopping history. Soon, we’ll see even more data points combined and analysed using artificial intelligence to further personalise each shopper’s experience. Factors such as dwell time, interest in specific products and even the customer’s mood when they enter the store will all be analysed to deliver a better, more personalised customer experience.”
The rollout of 5G could unlock several transformative possibilities right across the retail landscape. Products are no longer passive objects on a shelf but become dynamic, able to connect with passing customers, who can use their phones to gain detailed information about the product before they buy. Building on the success of 4G LTE, retailers will not be limited by broadband speed or latency when delivering these innovative services to their customers.
In their report, Deloitte outline what could be a technology-dominated retail future – one that 5G will be instrumental in delivering: “5G may open the door for drone delivery, VR dressing rooms, and AR experiences at home or in‐store. A faster connection will facilitate the use of VR or AR in online and physical retail as well as in direct marketing. Imagine walking into a store guided by AR to the exact location of your purchase or walking through a virtual store to make your purchase.”
Retail has been evolving thanks to the massive success of e-commerce and now m-commerce. As technologies like bots, voice control, geo-location services and AI become a practical possibility for retailers, 5G will underpin all these developments. Gartner, for instance, predicts that by, 2020, 100 million consumers will shop in AR online and in-store.
“The impact of AR or VR in retail can be transformative,” said Hanna Karki, Principal Research analyst at Gartner. “Retailers can use AR as an extension of the brand experience to engage customers in immersive environments and drive revenue. For example, IKEA’s Place app enables customers to virtually ‘place’ IKEA products in their space. Additionally, AR can be used outside the store after a sale to increase customer satisfaction and improve loyalty.”
With Sylvain Fabre, Senior Research Director at Gartner also commenting: “Gartner expects that the implementation of 5G and AR/VR in stores will transform not only customer engagement but also the entire product management cycle of brands. 5G can optimise warehouse resources, enhance store traffic analytics and enable beacons that communicate with shoppers’ smartphones.”