The arrival of 5G looks set to shake up the way customers shop online - but is it for the better?
In February of this year, analysts were discussing the possibility of a “retail apocalypse.” With thousands of store closures taking place in 2019, things looked bleak for the retail sector even before the COVID crisis struck and dramatically reduced foot traffic and non-essential shopping. But retail has defied the experts and futurists numerous times in the past decade, and it has proved remarkably successful at adapting to and taking advantage of new technologies. With businesses around the world poised to unlock the potential of 5G networks, will the new technology be the final nail in the coffin for brick and mortar shopping, or will it help traditional stores get back on their feet?
Singapore telecom giant Singtel recently launched its 5G network, and that rollout has been accompanied by a shift from the traditional phone store to unmanned kiosks. With the pandemic pushing shoppers to embrace contactless payment, Singtel’s innovative new model will offer SIM card replacement, device collection, and real-time analytics. The new kiosks will be staffed by AI equipped robots named Stanley and Stella, who will answer customer queries, while also monitoring to ensure that customers don’t exhibit high temperatures and adhere to social distancing regulations.
“COVID-19 has ushered in a new, digital way of life for many people, accelerating a fundamental shift in the retail industry toward a hybrid online and offline retail model,” said Yuen Kuan Moon, CEO, Consumer Singapore at Singtel. While many shops were already experimenting with a hybrid model that integrated shops with eCommerce, the shift to 5G and the pandemic are likely to significantly accelerate this shift.
With many customers wary of crowded stores and close contact with other shoppers, AI enabled robots could be the salespeople of the future. 5G will dramatically reduce latency (the lag between when data is sent and when it is received), which will make communication with AI much smoother and more natural. Meanwhile, the advances in augmented reality (AR) and virtual reality (VR) will allow for hologram style assistants who can pop up when they’re needed and disappear when they’re not.
Pop-up stores are already big business, with estimated revenues of $80 billion last year. Brands, and particularly brands with a heavy online presence, love them because they offer a low-cost, low-commitment path to raising a retailer’s profile and generating revenue. They offer a chance to take advantage of optimal shopping seasons, and reduce the square footage of locations. For instance, in 2019 high-end retailer Lord & Taylor closed its 700,000 square foot Fifth Avenue location in New York City, then opened a much smaller pop-up location in SoHo during the month of December. This enabled them to dramatically lower operating costs while taking advantage of the holiday shopping season.
5G will be a huge boon to businesses attempting to cut costs while still providing a pleasurable shopping experience. The VR and AR capabilities that new, more powerful networks will unlock allow businesses to display a full range of products in a small space. Meanwhile real-time data and increased delivery capabilities will allow businesses to keep their stock in automated warehouses rather than expensive storefronts. Pop-ups also have the advantage of seeming like a fun break from traditional retail and online experiences, an advantage that can create buzz and increased customer loyalty.
Immersive technologies like AR, VR, and mixed reality will also shake up eCommerce. New apps like Ikea Place from the Swedish retailer are already making good use of Apple’s new ARKit technology to allow shoppers to place a 3D model of a piece of furniture in their living rooms, removing the guesswork and the tedious measuring and trips to showrooms that make sofa shopping such a chore. The app scales products to room dimensions with 98% accuracy, offering customers the ability to see how a chair or table will actually look in their home. Ikea Place, which allows consumers to purchase products directly from the website, is just one example of how 5G can offer better, more convenient, and more cost effective retail solutions.
Augmented reality is already starting to offer us the possibility of trying on clothes or make-up from our couches, and we expect it to be a hit. Creating a profile in an app might allow retailers to suggest shirts that look good on certain body types, or make-up options that perfectly match your skin-tone. Personalizing your eCommerce platforms and building up detailed customer profiles is going to be essential for building loyalty in the 5G world, and it will also make it easier and cheaper than ever before for marketers to nudge consumers towards a purchase. If you aren’t already putting data to work for you, you’d better get started.
Real-time communication with consumers will create the ability to customize products and services, offering bespoke experiences in areas where that luxury hasn’t existed before. As New York tech website AlleyWatch notes: “Personalization via AR is already happening for big-ticket purchases like cars… Yet that innovation is only part of the story when it comes to personalization. With face-tracking software, customers will be able to tweak the shape, design, and colors of eyewear, jewelry, and more… When customers place an order, it will be for a tailor-made product via a 3D printer. At last, customers will be able to create their own products.”
Amazon has already invested in this trend. They recently acquired 3D body scanning company Body Labs for somewhere between 50 and 70 million dollars. Face scanning and body scanning technologies are likely to become an important part of the consumer experience as 5G networks take off. It’s time to get to know your customers really, really well.
With 5G adoption right around the corner, traditional retail paradigms are on their way out. If you’re looking to profit in this brave new world, it’s time to get on board. If you’re looking for ways to capture real-time marketing data and create seamless customer experiences, get in touch with Adimo today!