How 5G is Expected to Impact Retail Customer Experience

August 28, 20208min

The retail industry has been upended in recent years. A hyper-competitive landscape, the transition to e-commerce, and rapidly changing consumer habits have changed what and how we buy things–as well as the places we buy them from. The bankruptcy of once-ubiquitous retailers, such as Victoria’s Secret, lays bare how the mighty have fallen. 

Retailers have had to totally transform their business–or see their profits fall in a world dominated by a select few mega-retailers such as Amazon.

The challenges for small businesses are many; 5G offers opportunities to meet these challenges, for those retailers willing and able to change along with the times. One example could be the food product niche in the UK. 96 percent of the UK’s 7,400 food and drink manufacturing businesses are SMEs so now, more than ever, 5G can make a huge impact over small businesses & retails. 

The fifth generation of wireless technology–more frequently known as 5G–has the potential to change the retail industry. 5G enables real-time video downloads, and even, the extension of the retail experience outside the store. An increase in the speed of mobile devices and better location-tracking data are among the advances that retailers can seize for competitive advantage–or, just to stay afloat among a rapidly changing retail and consumer landscape. 

For some, 5G will enable them to apply automation in order to improve customer experience, enhance customer retention, and thus maximize market share and profits.

For others, the inability to understand and use the technology will lay bare that their businesses are increasingly obsolete. It’s not surprising, therefore, that excitement around 5G–and investment in it–have been considerable. Barclays has projected that implementation of 5G will increase aggregate UK business revenue by as much as £15.7bn by 2025. As such, Westminster is backing the transition to 5G with full force; 5G pilots are underway in London, Edinburgh, the Midlands, and Belfast. In the United States, Verizon plans to invest $17 billion this year in 5G and other research-and-development priorities and projects that the 5G network will begin yielding profits in 2021.

While 5G offers myriad benefits over its 4G predecessor, the heart of the excitement around 5G remains its astonishing speed. Some claim that 5G will be ten times faster than current LTE technology; this will open the floodgates of opportunity in the IoT sphere, in that it will enable IoT devices to share data faster than ever before. And 5G holds the potential for retailers to utilise data that are relevant to retail businesses.

First, the data available to retailers will be accumulated faster. This will enable brick-and-mortar stores to gain valuable insight into their customers’ preferences and habits. Imagine browsing your favourite purveyor of clothing, and receiving a text suggesting in-stock items that may interest you. And, having the ability to use augmented reality to virtually try on the items you’re considering. Such an interactive experience will prove invaluable–particularly, in the wake of the recent pandemic, when customers may be wary of entering crowded dressing rooms where social distancing is difficult to maintain.

While you’re browsing, questions and answers about each item you take off the rack can be forwarded to your phone–thus absolving store employees from answering questions in the context of face-to-face interaction. IKEA’s Place App puts 5G to work in allowing shoppers to virtually model a piece of furniture in their homes before purchasing. All of this saves time and fits the moment from a public health lens.

As a general proposition, 5G enables retailers to keep in touch with their customers more effectively by disseminating more personalised, customised information. Outside the store, passersby can walk past the storefront and receive text messages informing them of discounts–not on the store inventory in general but rather on products that data shows will be relevant to them. 5G can also increase the efficacy of digital signage. 

Retailers can utilise 5G to streamline their back-office operations: Inventory can be tracked and catalogued in real-time, warehouse operations streamlined, store analytics enhanced. Automated checkout will be faster and more practical, thus reducing lines and eliminating the need to interact with employees. In fact, 65 percent of UK retailers hope that 5G will enable them to downsize their cash desk staff.

In the post-pandemic world, customers will be more mindful of limiting interactions with employees who may be crossing paths with thousands of people per day. And while it is unfortunate to furlough employees, retailers will need to operate with fewer costs if they are to compete with giants such as Amazon and Asda.

What we see in the retail industry is a consolidation–a truly Darwinian market–separating those who can efficiently cater to their customers’ most particularised needs, from those who cannot.

If retailers can capture the potential intrinsic to 5G, there will be a clear symbiotic benefit: efficiency for the retailer, and a more interactive experience–as well as faster service–for the consumer.

Alon Ghelber

Alon Ghelber

Alon Ghelber is CMO at Revuze, an AI-enabled technology analyzing millions of customer reviews, online opinions, and offline pieces delivering experience-related insights and intelligence for companies to optimise decision-making.

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