Customer experience and convenience are at the forefront during the pandemic we take a look at what impact 5G can have on the retail industry as the hole world has been forced to go digital...
In February of 2020, Forbes magazine released a story titled “Retail Apocalypse or Revolution? How 5G Will Change How We Shop.” In the days before the COVID-19 pandemic shuttered shops and pushed commerce online, Forbes’ council of experts predicted that 5G would could precipitate a “retail revolution, and [could be] one of the technological keys that could assist retailers in developing new omnichannel customer relationships, building brand loyalty, enhancing the customer experience and, as a result, driving long-term revenue.” After a year of unprecedented societal change, let’s take a look at the ways in which 5G is already transforming retail, and what changes we can expect in 2021.
We used to view eCommerce as a fringe alternative to brick and mortar retail. Now, buying groceries, clothing, or even big ticket items online isn’t a novel experience but a fact of life for millions of consumers around the world. While the decline of brick and mortar stores has happened more gradually than tech-enthusiasts predicted, the pandemic might have delivered a fatal blow. KPMG has forecast that half of the U.K.’s retail sales will occur online by 2025, and that a quarter of physical retail outlets will be permanently closed by 2023.
Most analysts feel that 5G is going to push physical stores into a “support relationship” with online platforms. We’ve already seen a host of brands that facilitate most, if not all, of their sales online move to create physical pop-up stores, showrooms, and experiences, blending the limitless selection of eCommerce, with the tactile and personal connections customers love. Brands like Glossier, Bonobos, and Warby Parker have done an impressive job of leveraging the benefits of omnichannel retail to deliver first-rate experiences.
One way that 5G will impact stores is through the internet of things (IoT). The technology will likely make sensors omnipresent in retail spaces, allowing any retailer to offer personalized greetings, dynamic displays, and enable connections through smartphones and other devices. An intelligent display can offer deals, suggested products, greetings, and rewards based on a customer’s online shopping history, recent purchases, or searches on a company’s website. As technology erodes the barriers siloing brick and mortar away from eCommerce, brands will have the opportunity to create bespoke experiences for shoppers across all platforms. The key to taking advantage of this opportunity will lie in finding a strategy that walks the fine line between catering to each individual's desires and ensuring they don’t feel like they’re under surveillance. The good news is that you’ll be able to customize their experiences based on their stated choices and preferences.
Amazon’s Go! Stores made a splash when they were unveiled in 2016, but in spite of their revolutionary use of cameras, sensors, and app-based purchasing, three years later there were fewer than 25 locations around the globe that utilized the technology. The spread of 5G is about to change all of that: in February of 2020 Amazon launched its first “Go Grocery” supermarket, which incorporated the same system into a full-sized supermarket. The following month the Seattle-based behemoth began licensing the technology to other retailers, who could introduce their own app-based payment system or allow shoppers to register a credit card. As NBK Retail Consultancy founder Natalie Berg told the BBC, “It's far more lucrative for Amazon to license the technology to other retailers than to just use it in its own grocery stores.”
5G technology is up to 100 times faster than 4G. This is great news for retailers and brands that take advantage of eCommerce opportunities. For a start, it will make searching, placing orders, and checking out lightning quick, a change which will reduce friction and increase conversion rates.
But the most significant difference 5G will make is in revolutionizing customer experience. We’ve written before about the potential of VR and AR to replicate and improve upon the in-store shopping experience. IKEA’s new IKEA Place technology uses technology to allow smartphone users to “place” furniture from the Swedish mega-retailer in their living rooms, allowing you to see how realistically rendered and scaled pieces of furniture would look and fit in your home. While it might cut down on meatball sales, IKEA Place is a perfect illustration of how 5G technology can be used to make eCommerce even better than the real thing.
Brands selling clothing, make-up, and a host of other products are finding creative ways to let shoppers try out their products from the sofa. Adweek has already reported that “AR try-on technology is no longer an alternative in the beauty industry.” And brands like Sephora and L’Oreal have taken advantage of facial feature and finger tracking to create sophisticated apps that allow shoppers the ability to safely try out a wider variety of products than they ever could at the make-up counter.
Nike has already created a program that scans customers feet and recommends shoe models and sizes based on the dimensions of their toes, heels and arches. Similar technologies are on the way from leading fashion retailers. Many shoppers hesitant to purchase expensive suits or dresses online without knowing how they actually look will be able to try on outfits in a fraction of the time it would take in a dingy, fluorescent-lit changing room. The LiDAR scanners on new Apple phones will make it possible for shoppers to scan and imprint 3D images into online and real world spaces, allowing retailers and brands to communicate exact information on body dimensions which will unlock and unheard of degree of customization.
The changes 5G is enabling were on the way before the COVID pandemic upended societies and economies. But the virus has accelerated the shift towards eCommerce, and shown brands and retailers the need to improve their online platforms and create positive customer experiences. 2021 may go down in history as the year we finally unlocked the potential of technology to create better, safer, and more convenient ways to shop. If you aren’t in position to deliver outstanding eCommerce experiences, let Adimo guide you into the brave new world of 5G.