5G Is Getting Real at Retail
The 5G retail era has arrived and, with it, an exciting array of opportunities for businesses looking to gain a competitive advantage. The pace of adoption will be staggering, with predictions from Bankr suggesting that over half the global population will enjoy access by 2025.
As more consumers opt for fifth-generation wireless devices, retailers are beginning to follow suit. Many regard this revolutionary technology as the key to surviving what Forbes refers to as the “retail apocalypse” — a time marked by the “battle for the hearts, minds, and wallets of retail shoppers.”
The potential benefits for retailers are built into the very foundation of 5G. As an eMarketer analysis points out, each network generation broke new ground in different ways: 3G introduced the app economy, 4G strengthened streaming, and now 5G will deliver the immersive experience needed to take retail to the next level.
Companies that embrace 5G early will see a myriad of benefits, ranging from improved inventory management to increases in customer engagement and satisfaction. Top areas of opportunity include the following:
Smart Shelves for Stocking and Inventory Management
Out-of-stock merchandise has long been a source of frustration for customers and businesses alike. Retailers are charged with the tough task of keeping a wide array of products in stock without wasting valuable resources on items that consumers may not purchase. If a particular item is unavailable when a potential buyer needs it, this leads not only to an immediate loss of revenue but also reduced customer satisfaction.
Smart shelving provides a viable solution to this conundrum. Powered by radio frequency identification (RFID) technology, smart shelves can determine when displayed items have been purchased and when they need to be replaced. These systems also alert employees if items are placed on the wrong shelves.
Whether products are misplaced or out of stock, smart shelving systems can instantly alert employees by sending notifications to their mobile devices. Employees can then spend more of their time on the sales floor and waste less effort performing physical counts or completing other tedious manual tasks.
Although smart shelving systems hold a lot of promise in the retail environment, they call for an increased level of connectivity and analysis. Only 5G technology can meet these elevated demands without compromising the performance of other crucial systems and devices.
With a strong 5G network, employees can access critical data in real-time. Increased bandwidth and reduced latency allow modern networks to handle the constant flow of data and produce instant updates. This, in turn, ensures accurate insight into inventory and equips employees or automated systems to make rapid adjustments and keep shelves consistently stocked.
Today’s top retailers are increasingly aware of how many customers are physically present within stores at any given time. Known as counting footfall, this close monitoring of retail traffic facilitates more accurate metrics, such as conversion rates or average transaction value. Accurately measured footfall can influence strategies for scheduling employees, planning marketing initiatives, and dealing with underperforming locations.
As 5G networks become more common in retail, it will be easier and less costly for businesses to deploy the myriad of sensors needed to accurately track how many customers are present at a given time. These sensors can also determine where customers congregate and whether they convert.
Insights gained through 5G-supported analytic systems foster swift adjustments concerning where products are displayed and how many sales associates are on hand to interact with customers.
Personalized Product Recommendations
Smartphone usage is nearly ubiquitous within the modern retail environment. Data from PYMNTS reveals that around half of shoppers who own smartphones use them while visiting brick-and-mortar locations.
Retailers once worried about the potential for in-store shoppers to opt for e-commerce competitors, but many businesses now regard device-aided in-store shopping habits as an opportunity to increase engagement and produce larger purchases.
One key option for accomplishing these goals? Personalized product recommendations delivered to customers while they’re physically browsing. AI-driven tools draw on purchase and browsing history to determine which types of products customers are most likely to purchase while visiting stores in person. This requires extensive data analysis that could be cumbersome without the backing of 5G.
Personalized recommendations can also be targeted according to the individual’s current location within a particular store. Recommendations may be accompanied by discounts to prompt purchases that might not occur otherwise. This refined take on the concept of the sale allows retailers to be more strategic about where and how they mark down products.
Self-service kiosks streamline everything from checkouts to returns, facilitating a swifter flow of customers with fewer resources. While these kiosks have succeeded in a world of 3G and 4G, they will take on a greater role in the modern retail environment as they enter the 5G era.
The main benefit? As mentioned previously, 5G eliminates the need for fiber-optic connections. Self-service kiosks can be placed exactly where they’re needed — no need to worry about interference from wired connections. This delivers a new level of flexibility, enabling store layouts that drive additional spending via strategic flows of customer traffic.
Flexible kiosk placement can even drive online sales. For apparel companies, for example, kiosks situated within changing room areas allow customers to view cart totals or email relevant information to potential gift-givers.
Automated Shopping Carts
Customers appreciate the convenience of self-service solutions, yet an even more impressive option is poised to take over: automated carts and baskets.
Pioneered by Amazon, this approach allows customers to simply place the items they want within their cart or basket before exiting through a designated store lane — without the cumbersome process of scanning barcodes or submitting payment information.
A concept known as sensor fusion makes automated checkout possible. Here, input from several sources (such as cameras or radar) come together to provide detailed information as to which products customers remove from shelves or displays and what items ultimately leave with them.
Given the extensive need for real-time data, it’s easy to see why this approach was largely out of reach when 3G and 4G dominated. Soon, however, 5G could transform automated checkout from science fiction to status quo.
Virtual and Augmented Reality
The most exciting technological developments in retail integrate digital and real-life elements to great effect. Virtual reality (VR) and augmented reality (AR) enhance the consumer experience both online and in-store. Creative solutions allow customers to interact with brands and products in meaningful ways that drive not only short-term spending but also long-term relationships.
Early examples of VR and AR (known together as mixed reality or MR) in the retail sector include:
Magic mirrors: These allow consumers to sample makeup and other products while alleviating hygiene concerns. Beauty brands were among the first companies to experiment with AR. The technology is already viewed as a must-have for top makeup lines.
Gamification options: In-store AR activities such as those offered by Burberry and Snapchat bring a gamification experience to shopping. Participants who scan codes within pop-ups can see a variety of creatures from Burberry’s Animal Kingdom come to life.
Geo-targeting: Foot Locker keeps sneakerheads engaged with an experience known as The Hunt, which places geo-targeted AR clues that lead to limited-edition products.
Despite the enormous potential associated with MR, this technology has yet to produce the radical transformation that enthusiasts predicted years ago.
A key concern? Headsets such as the Oculus Rift are costly and cumbersome but, when limited to tablets or smartphones, MR experiences simply aren’t immersive enough to satisfy today’s demanding customers. Combined with lag from slow 3G or 4G networks, it’s easy to see why consumers find existing MR solutions rather underwhelming.
Enter 5G. Its minimal latency will facilitate higher resolution and improved cloud connectivity. With 5G, location-specific details can be instantly integrated to make MR experiences more compelling.
Early solutions such as Qualcomm’s XR Viewers will rely on USB-C cables to connect headsets to specific 5G smartphones. Qualcomm will also deliver seamless integration of various headsets and devices with its XR Optimized Program. Similar options such as Microsoft’s HoloLens 2 MR headset could also hold huge implications for the exciting new integration of MR and 5G.
Brands are increasingly bringing experiential opportunities such as VR and AR to pop-up locations. These scalable retail solutions provide targeted exposure to new products or concepts. With 5G, pop-ups have a greater impact, providing a range of try-before-you-buy opportunities and attention-grabbing digital signage.
When powered by 5G, brands can even unveil all-digital, unmanned pop-ups such as the store that won Outstanding Store Design at the 2020 World Retail Awards.
Fitness and Wearables
Major fitness and athletic retailers have recently signaled their intention to dive into cutting-edge technology. Lululemon, for example, acquired the startup Mirror, which is known for its home fitness solution. Lululemon has also experimented with in-store touch screens that display both products and community events.
Meanwhile, Puma has taken the effort a step further by allowing customers to view various products with in-store mirror displays. Visitors to the Puma flagship store can enjoy the thrill of virtual F1 races or test products with a Skill Cube simulator that feels remarkably like Milan’s San Siro Stadium.
The next big trend in fitness retail may be the wearable. Devices such as the Apple Watch and the Samsung Galaxy Fit already track everything from movement to sleep patterns and even caffeine consumption — all in the interest of helping users improve their personal health. Soon, however, these products will become an integral component of the shopping experience.
A wearable boom was predicted several years ago, but the concept has since stagnated and is now poised for another step forward. That is exactly what 5G will deliver, allowing devices to handle a greater volume of data while requiring less frequent charging.
Real-time execution will become a reality with the introduction of edge computing, which, as Verizon explains, “allows complex functions to be performed closer to the user” and “goes hand-in-hand with 5G.”
As fitness retailers become more service- and community-oriented, wearables will help customers gain better insight into their exercise routines. Ultimately, this may drive them to invest in innovative products that can help them reach their fitness goals.
Cableless Connections to Power the Supply Chain
Developments such as AR may attract the bulk of customer attention but, behind the scenes, 5G will streamline workflows to ensure that products move smoothly through every aspect of the supply chain. This means optimizing routes for drivers, tracking autonomous delivery vehicles, and managing order-picking machines.
The benefits will be particularly notable in rural areas, which previously experienced only limited gains amid huge costs for fiber-optic connections.
Reduced Power Consumption
Internet of Things (IoT) solutions such as smart thermostats and smart lights allow retailers to limit consumption, leading to considerable reductions in energy costs. Unfortunately, as the number and scope of connected devices expand, customers and employees alike may suffer degraded performance. Hence, while IoT devices appear to have taken over, they are not yet being used to their full potential.
With 5G, the ability to implement IoT technology will expand considerably. Alongside that expansion will be new opportunities for streamlining operations and minimizing power consumption. This will occur not only in retail settings but also in warehousing and across the entire supply chain.
Carnegie Mellon’s Metro21: Smart Cities Institute executive director Karen Lightman informed Forbes that 5G will make it easier to leverage existing technological concepts by taking “things out of the experimental stage and [moving] them into the deployment stage.”
Already, solutions such as temperature and humidity sensors enhance communication for building management systems. Low latency is crucial to saving energy. As Lightman explains, “If you’re wanting to improve the efficiency of your building, you need to know what’s happening in real-time.”
Many future developments prompted by 5G are impossible to predict. Steve Szabo of Verizon Business expects that 5G will “significantly accelerate the process of sensorization to drive digital transformation in industries,” given that its potential “to transform business operations is immense, enabling use cases that don’t exist today.”
It’s difficult to know exactly what retail will look like in a world dominated by 5G, but innovations will likely be more abundant and faster to implement. Roadblocks that previously limited the pace of change will no longer exist, so technological concepts that once seemed out of reach will now be realistic.
As 5G takes over, retailers enjoy a unique opportunity to drive greater engagement and loyalty among in-store customers. Faster connections have the potential to create a more cohesive digital and physical shopping experience tailored to each consumer’s unique needs and preferences.
MarketSource helps retailers with adopting cutting-edge virtual services such as on-shelf QR codes. To learn more about our tech-oriented solutions, contact us today.