5G and the next retail revolution

More than two decades after e-commerce began disrupting traditional retail businesses, we find ourselves at the cusp of another retail revolution. This time, the driver will be 5G, the fifth generation of wireless technology that promises higher data speeds, ultra-low latency and massive network capacity – all of which will come together to transform the shopping experience for both brick-and-mortar and online stores.

According to the Ericsson Mobility Report¹, 5G population coverage is forecast to reach 45% in 2024. The technology’s ability to reduce latency - from 60 milliseconds for its predecessor 4G to less than a millisecond - will be a game changer. Retailers will be able to gather data more quickly to power capabilities such as computer vision, artificial intelligence (AI) and augmented reality (AR), and integrate new digital possibilities into physical stores to create an omnichannel experience.

With 5G, stores will be able to deliver personalised hybrid shopping experiences in real time. For example, facial recognition technologies, operating with the immediacy enabled by 5G, will enable stores to welcome regular or VIP customers by name as they walk in through the door. Information about the customer’s previous visits and purchase patterns can be retrieved and analysed, and cross referenced with online searches, demographic data and other relevant information to recommend specific products or deals.

Smart mirrors in changing rooms can be transformed into virtual shopping assistants who will be able to give advice in real time. For example, if a customer finds that a dress does not fit well, the mirror will be able to recommend another size or suggest alternatives.

Some retailers are experimenting² with smart window displays enabled by kinetic technology and 5G, that allow passers-by to see themselves in the store’s featured clothing items even before they enter. There are also cosmetics brands using “magic mirrors” that show how different make-up options will look like on a shopper’s face.

In grocery stores, customers are being guided to the exact location of an item that they are looking for, with directions displayed using AR on their phone. As customers browse the shelves, an AR app allows them to provide additional information on any product simply by pointing their phones at it, and alert them to potential ingredients that they should avoid due to an allergy or medical condition.

5G is also set to boost online shopping with much faster download speeds and smoother video streaming. According to Google, 53%³ of mobile users leave a site if one of its pages takes more than three seconds to load. 5G will reduce the wait time, leading to significant growth in the online retail sector. An Adobe Digital Insights report estimates that 5G could boost ecommerce revenues by $12 billion by 2021⁴ if network rollouts go as planned.

But the more interesting impact will be the way 5G transforms the online shopping experience, similar to what it is poised to do for brick-and-mortar stores.

5G enables online retailers to up the ante in offering immersive experiences such as AR, VR and mixed reality. Customers will be able to “try” before they buy. For example, they can do up their walls in a certain colour to see what it looks like without having to open a can of paint. Or they can “see” how a new table will fit into their dining area before buying it, which is what IKEA has been allowing customers to do with its app IKEA Place.

Using the IKEA app, customers can place 3D models of furniture in their homes or workspaces before deciding whether to buy. The company has also launched an online VR store which allows customers to browse through its products from the comfort of their home using a mobile VR headset.

By reducing latency and increasing bandwidth, 5G will enable these immersive experiences to really take off by removing lag and improving the quality of the content.

5G also enables retailers to introduce new and more flexible retailing models such as autonomous pop-up stores, without having to set up a wired telecommunications infrastructure.

According to Retail Touchpoints⁵, the pop-up store has become a go-to marketing strategy for retailers looking to extend the brand and introduce new products. With 5G, the full omnichannel experience – from marketing to sales fulfilment - can be replicated in a pop-up model which connects digital and physical experiences.

The low latency and fast speeds will enable everything from payment transactions to AR and streaming video, allowing brands to reach out to customers at any location. It also powers the Internet of Things (IoT) and AI for real-time intelligent connectivity and analytics in-store.

UNBOXED by Singtel is an example of an unmanned 24/7 pop-up store that integrates online and offline customer touchpoints. The store utilises Singtel’s 5G NSA network to deliver 5G speeds of more than 1Gbps. This powers UNBOXED’s connected self-serve kiosks, delivering a seamless experience for customers as they sign up for mobile plans, get instant SIM card replacements, make prepaid card purchases and collect their devices from in-store POPstations (Pick Own Parcel stations).

Even more exciting capabilities are being demonstrated by Stella and Stanley. 5G enables Stella, the virtual assistant at the UNBOXED kiosks, to make use of facial recognition technology, analytics and AI to deliver personalised recommendations to customers in real time. It also allows UNBOXED's roving smart robot Stanley to operate effectively as a safe distancing ambassador. Stanley is integrated with IoT sensors and the store’s security system to detect customers who are running a temperature and ensure that customers adhere to safe distancing measures.

Whether online or offline, pop-up or permanent, 5G will be an important enabler for retailers looking to develop new omnichannel customer relationships. The technology promises unprecedented capacity, speed and reduction in latency. But its benefits lie far beyond these individual gains. It lies in the potential to transform an entire industry as retailers re-imagine the shopping experience and redefine customer engagement to build brand loyalty and drive long-term revenue.

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¹ Ericsson, Mobility Report, November 2020

² Data Center Dynamics, How the Edge and 5G technology will redefine the retail experience, September 2019.

³ Think with Google, Find out how you stack up to new industry benchmarks for mobile page speed, February 2018.

⁴ Marketing Land, 5G will drive $12 billion in new mobile commerce revenue by 2021, March 2018.

⁵ Retail TouchPoints, Pop-Up stores become more than just a trend.