Adam Shilton

2019 is the year that sees 5G go mainstream. So as mobile phone networks and manufacturers gear up for the next generation of mobile technology, I take a look at what opportunities 5G will offer for the retail industry and whether retailers are doing enough to prepare for its arrival.

But exactly what is 5G and how does it differ from its predecessors? In the early eighties as the first ‘brick’ mobile phones came onto the market so did 1G or ‘first generation’ cellular communication which supported voice calls allowing people to communicate on the move. In the nineties, 2G saw the first text messages being sent as the mobile spectrum was used more efficiently and by the early noughties 3G was facilitating mobile internet access, streaming video, mobile gaming and sophisticated mobile applications. By 2012, 4G was being rolled out which saw significantly improved upload and download speed, HD applications, video calls and the advent of cloud-based storage.

So, 5G is simply the next iterative step in the evolution of this technology right? Wrong.

Rather than simply a step on from previous cellular network generations, 5G’s is set to revolutionise wireless communication with super-fast connection speed, greater capacity and low latency (the lag time as data travels between two points) and the lower the latency, the better the user experience.

“In basic terms if 3G was a VHS tape and 4G a DVD then 5G is Netflix.”

Imagine you want to download a high definition film. On 4G this could take anything up to 8 minutes depending on network, with 5G the same film will download in less than 50 seconds. Simultaneously, 5G will also be able to connect 100 time as many devices as current 4G networks according to CTIA; so no more struggling for reception at music festivals or sports games. This seismic leap in potential has led 5G being pitched as ‘a new form of connectivity’ with the potential to make much hyped technologies such as augmented and virtual reality common place in our everyday lives.

In basic terms if 3G was a VHS tape and 4G a DVD then 5G is Netflix.

So how can bricks-and-mortar stores capitalise on the potential of this new technology and what opportunities will it offer retailers? Here are my top three takeouts.

NEW IN-STORE EXPERIENCES

With 5G’s increased speed, imagine walking into a department store and being able to use personalised wayfinding to guide you directly to the specific department and product you’re looking for, all through your phone. Now imagine you’re in a LEGO store and through augmented reality it’s LEGO Movie characters that ‘hold your hand’ and guide you directly to your destination, or indeed guide you to other linked products you may not have considered buying. Or take the new skis you’re considering for a hyper-real test run down the piste in St Moritz through a virtual reality headset. This type of realistic experience will be made possible by 5G’s ability to almost instantaneously transmit cloud-based information to mobile devices in a way that has not been feasible before.

SMART STORES & SUPER SERVICE

Connected ‘Internet of Everything’ (IoT) devices will provide insight into consumer behaviour in real time, such as smart shelves that instantaneously update stock replenishment systems. As inventory systems become more responsive, the way in which stores are designed can also be fundamentally reimagined as stock rooms become smaller allowing sales floors to be maximised. Furthermore, imbedded facial recognition technology will help facilitate hugely personalised interactions as customer’s details and previous shopping preferences are immediately pushed to sales assistants’ mobile devices. Facial recognition software company Facenote is already rolling out a version of this technology at retail locations throughout Chile, Brazil and the US allowing brands to recognise their most valued companies as soon as they enter the store.

Despite the opportunities afforded by 5G to create ever more personalised customer touchpoints, the misuse of personal consumer data and GDPR has implanted a degree of mistrust into the public consciousness around how our information is being used by big business. As such, retailers will have to be hugely sensitive to how customer’s data is protected in order to ensure these closer relationships do not lead to acrimonious separations.

OPTIMISE THE VALUE CHAIN

With smarter, connected stores will come smarter connected logistics. With IoT devices in constant communication, the location of goods in the supply chain can be known and tracked in real time. Not only will stores and customers be able to keep constant tabs on where products are, but shipments themselves will be able to communicate with one another to ensure seamless and perfectly timed delivery. This ‘just-in-time’ potential has the power to revolutionise logistics meaning items will arrive exactly when needed, requiring less warehouse capacity and streamlining the value chain for brands.

As 5G will be able to support countless devices communicating with one another exponentially, it will also be possible to monitor the transparency of the supply chain with greater scrutiny. It will be possible to confirm a product’s point of origin and provenance with greater ease in order to ensure item’s ethical credentials are bona fide. As such retailers will need to ensure their supply chain is in check as consumer’s focus increasingly shifts towards traceability and sustainability.

With the imminent arrival of 5G retail brands should therefore be asking themselves “are we ready?”. While previously hyped, in-store tech has often had something of a false start, now is the time for retailers to consider what the future could look like for their in-store experiences, logistics and most importantly customer service. More than ever, retailers and marketers need to explore how technology can improve their brand in order to bring both emotive and transactional value to the customer.