Next big thing: 5G’s impact on retail

Get ready, 5G is coming! But what’s in it for retailers?

Recent research from Barclays Corporate Banking suggests that 5G could supercharge the UK economy by up to £15.7 billion per year by 2025 in a ‘best case’ scenario. But there have also been warnings that the opportunity could be missed because industry leaders still do not know enough about the benefits of investing in the technology.

For retailers, better in-store connectivity for shoppers is to be welcomed. However, there is much more that 5G can deliver to retail businesses, says the Barclays research report entitled 5G: A Transformative Technology.

Ian Gilmartin, Head of Retail at Barclays Corporate Bank says 5G has the potential to provide a much-needed boost to the UK retail sector. “Not only can the technology improve the in-store customer experience, it is also set to transform warehouse management through the use of the internet of things, artificial intelligence and robots,” he says.

“In order for the UK retail sector to realise its full potential, the Government, mobile providers and partners such as financial institutions need to support businesses to make smart investments that enable 5G.”

5G will lead to innovative products and services

5G technology, enabling an international upgrade of global phone networks, will potentially revolutionise global communications and launch a wave of transformative consumer technologies. Retailers will want to stock the latest 5G smartphones, smart appliances, robots and connected cars.

The advent of 5G phone networks – promised to be rolled out across the UK from next year – could bring the mobile internet speed and stability required for retailers to really commit to innovative technology projects.

The government is supporting 5G by incorporating it into its Industrial Strategy, having pledged £1 billion towards digital infrastructure, while the bidding process for 5G licences opened to the telecoms industry last year, with testing underway in certain parts of the country.

New augmented reality and virtual reality (AR/VR) applications are likely to be adopted by retailers who are under pressure to deliver more immersive, engaging experiences for their customers, particularly in physical stores, aiding the crossover between online and offline. 5G capabilities can support things like real-time rendering for immersive video, shorter download and set-up times, and extension of shopping experiences beyond stores.

5G key to powering AR and VR in retail

A Gartner survey among retail business decision-makers reports that by next year, 46% of retailers across Europe, Asia and the US plan to deploy either AR or VR solutions “to meet customer service experience requirements”.

“The impact of AR or VR in retail can be transformative,” says Gartner principal research analyst Hanna Kark. “Retailers can use AR as an extension of the brand experience to engage customers in immersive environments and drive revenue. For example, IKEA’s Place app enables customers to virtually ‘place’ IKEA products in their space. Additionally, AR can be used outside the store after a sale to increase customer satisfaction and improve loyalty.”

Gartner’s report says that with VR’s immersive interfaces, retailers can create task efficiencies or reduce the costs associated with designing new products. They can also enhance the understanding of information through advanced graphical visualisation and simulation technologies.

Retailers are already exploring the possibilities of this technology. We need only look at Alibaba’s full VR shopping experience to get an idea of what’s possible. Other examples include virtual reality tours by Tesco, Adidas’ VR video to promote its outdoor clothing collection, and eBay Australia’s partnerships with Myer to create personalised stores.

Ultimately 5G mobile network technology presents an exciting opportunity to accelerate the adoption of AR and VR in stores.

A 5G future: It’s not just new phones

In other words, 5G promises to facilitate a whole new world of digital connectivity. By 2020 analysts estimate, there will be 10 billion so-called “Internet of Things” (IoT) devices, from internet-linked AI speakers to connected cars. By 2025, that number will be 22 billion. It may be that retailers specialising in these products will emerge.

Physical shopping spaces could look very different when 5G beds in. Here is a mall and a store that are both already making use of 5G to delight tech-obsessed shoppers in China and Spain.

China: The world’s first 5G shopping mall

In May 2019, Huawei, China Mobile and the China Real Estate Association partnered to launch the world’s first 5G-connected shopping mall, promising HD video calls, delivery and destination guidance offered by 5G smart robots, artificial intelligence-based face recognition, precise indoor navigation and people flow analysis.

The Shanghai Lujiazui L+ Mall (pictured above) uses the 5G digital indoor system (DIS), which provides next generation network connectivity across the 12 floors and over 140,000 sq m of floor area.

Spain: Huawei’s 5G-inspired Madrid flagship store

Huawei has followed the launch of its 5G-enabled Mate 20 X smartphone in Spain by opening a new flagship store on Madrid’s Gran Via.

The 1,100 sq m, two-storey space, which opened its doors on 5th July, is the company’s largest retail store outside China, selling speakers, tablets, trackers, watches and smart home devices as well as smartphones. “We have a global vocation but we also want to have a presence in the heart of the city… so that when someone walks along the Gran Via they’ll ask themselves ‘what are the Huawei people doing?’ and come in,” Huawei Spain retail director Mariana Cherubini told El Pais.

On the ground floor shoppers can enjoy practical demonstrations of the latest technologies such as AI and 5G while the second floor has the sales area and conference room. There’s also a device repair service and a customisation area where clients can design their own smartphone case plus a space for regulator photographic exhibitions.

5G network technology explained

​How will 5G work?

​The new network technology will supercede current 4G mobile networks in the next few years. In the UK 5G pilots are underway in London, the Midlands, Edinburgh and Belfast. 5G will add a huge number of new network access points closer to consumers. This will mean more base stations in towns and cities.

Why should retailers care?

5G is a progression from the 4G that billions of us use now to connect to the internet on our smartphones. While the addition of another G may not sound particularly exciting, this technology, which enables download speeds 10-20 times the current rate, permits many more devices to be connected, and improves the responsiveness of wireless technologies. This means it is likely to have a profound impact on how retail businesses use technology in their stores and operations, and how customers can behave in stores, and in terms of buying new kinds of ‘smart’ products.

What’s the UK government doing regarding 5G?

The government is supporting 5G by incorporating it into its Industrial Strategy, having pledged £1 billion towards digital infrastructure. The bidding process for 5G licences opened to the telecoms industry last year, with testing underway in certain parts of the country. Find more detail on regional testbeds and trials here.

Are there health concerns surrounding 5G?

Retailers should be aware that there have been calls for more research into the health effects of 5G’s use of high frequency radio waves. Levels of radiation have not been fully investigated, critics say. In 2017 180 scientists from 36 countries appealed for a moratorium on 5G adoption until the effects of increased does of low level radiation could be studied. However regulatory bodies including the EU and the Federal Communications Commission in the US have rejected pausing adoption of the technology.

Are there security issues with 5G in retail?

There has already been controversy over Huawei the Chinese telecoms giant playing a leading role in the development of 5G networks. It’s been said that by providing international countries with telecoms equipment for their roll-outs, Huawei will allow China to spy on its rivals or somehow control their communications networks. It’s felt also that in a totally connected world there will be increased scope for cyberattacks, allowing criminals or even rival governments to indulge in hacking, identity theft and data breaches. Another concern is that with the Internet of Things driven by 5G connectivity there will be a marked loss of anonymity – due to millions of sensors, geolocation elements and facial recognition technology in play, tracking movements and impinging on personal privacy. Some security experts say we should think very carefully before embracing this vision of the future.

Image courtesy of L+Mall

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