One of the most popular buzzwords right now in the technology space is 5G. Technology companies around the world have been making rapid strides in 5G mobile technology, promising it to be the next big revolution.
But how will 5G redefine the retail industry?
Simply put, 5G is the 5th generation of mobile internet connectivity. It is a combination of various technologies as well as mechanisms expected to make its way into future networks to fulfill maximum capacity and performance demands. With 5G, retail companies can help drive new, innovative technologies with more speed and reliability, gather more data, and ultimately help build a long-lasting relationship with customers.
A decade ago, we witnessed SMAC technologies driving digital transformation with Social Media, Mobility, Analytics and Cloud providing the foundation. The new decade will take this to the next level of digital transformation, where the industrial revolution will be powered by both established and emerging technologies, including the Internet of Things, advanced data analytics integrated with artificial intelligence, robotic process automation, robotics, edge computing, virtual and augmented reality, 3D printing, digital twin and so on.
Statista 2020 provides information on retail e-commerce sales worldwide from 2014 to 2023. According to Statista 2020, in 2019, retail e-commerce sales worldwide amounted to 3.53 trillion US dollars and e-tail revenues are projected to grow to 6.54 trillion US dollars in 2022. This reflects the traffic coming through online and mobile channels and the ease in online shopping with offers. It also proves that consistent experience with interactivity has resulted in lower footfalls in mall visits, thus transforming the conventional shopping experience and enhancing the experience of purchasing online.
The retail industry has been witnessing a staggering rate of store closures in the last couple of years with more than 9,000+ stores closed. Retail spending is increasingly moving online. The declining footfall in stores, especially malls losing their popularity, and people preferring online shopping to ‘store’ shopping led to the closure of stores. There are several factors that contributed to the conventional retail apocalypse, like the rise of e-commerce and the continued trend of purchases online. Consumer behavior and purchase patterns have also been changing and customers now enjoy the freedom of shopping online.
As challenges and trends push retailers to reinvent and redefine their position and strategy to be relevant, the run up to 5G technology provides the necessary thrust to retailers with a new strategy in digital transformation. 5G brings value by rendering several channels and overcoming the connectivity challenges across the Stores, On Field and Warehouse:
Thus 5G will help overcome many of the challenges related to network and bandwidth but for the business, it is critical to understand what more 5G can offer that will be a game changer and justify the ROI with regard to the investment.
5G as catalyst for digital transformation in Retail
According to ‘2020-The future of retail technology’ report, 89% of retailers rely on technology to improve customer experience and 96% invest in technology to improve operational efficiencies. Thus, Customer Experience and Operational Efficiency continue to be a key focus for retailers in their digital transformation journey.
5G will catalyze the following use cases for Retailers.
To address the above IoT solutions, 5G can enable the IoT devices from the warehouse to the store shelf, including tracking shipments in the warehouse and provide a real-time view of the stocks. It improves the operations because every product is tracked and traced with the massive machine-type communication feature of 5G with status in terms of location, perishable goods or pharma products in real time. Thus, the ultra-reliable, low latency communications of 5G will enable retailers to explore new product delivery options like drones or with autonomous vehicles to deliver products to the consumer.
4. Integrated Advanced analytics with AI, IoT and 5G for real-time insights & recommendations. Retailers can improve consumer labeling, provide extreme personalization to consumers targeted with right products and experience that will ensure sale. This requires retail analytics technology to collect structured and unstructured information of a specific shopper and translate into an actionable insight to provide recommendations. The data-driven insights provide customized and relevant services to the consumers such as real-time shelf displays, predictive inventory, and real-time integration of external data sources.
5. Next generation digital commerce with 5G – 5G will facilitate shoppers with the right purchasing and satisfaction, enabling brands to engage in an automated fashion with the consumer after a sale and support them in using the product. The real time price and product feed with rich content needs bandwidth and responsiveness, further IoT can support different types of payment systems with wearables and eliminate point-of-sale (PoS) terminals.
Get started with run-up to 5G
Retailers will require a two-fold strategy as they embark on the digital transformation journey. This includes a strategy and roadmap in the run-up to 5G and further implementation with 5G connectivity. Retailers need to focus on the following aspects:
The retail industry is dynamic and with the advent of 5G, retailers will require a clear strategy in the run up to 5G. It will require a roadmap to get started to remain competitive and explore areas of business disruption with innovative products and services. 5G will provide retailers with uninterrupted business, a reliable network that handles peak time traffic, extreme personalization, AR/VR shopping experiences, fast access and real-time, streamlined operations, access to central systems and ease of tracking of product, price, inventory and customer information.
5G in Retail is a journey. Retailers should make investments in 5G and Gigabyte LTE technology, invest in PoCs that can create new revenue streams, closely align with carrier rollout plans, and above all, have a partner ecosystem comprising system integrators, network partners to test new technologies on the existing platform.
1. 2020-future-of-retail-technology-report sponsored by JABIL
2. The CIO’s Guide To 5G In The Retail Sector by Forrester
3. The Impact of 5G Report by WEF (www3.weforum.org)
L. Ganeshkumar is a Consulting Partner at Wipro leading 5G Industry Solutions. He has 25 years of work experience in Information Technology. His experience spans the areas of Communications and Consumer Business with a focus on digital transformation and customer experience.
Akhil Pratap leads the RDAT vertical Digital Solution Group. He is passionate about delivering the best-fit solution to our clients to make them successful in their respective marketplaces.