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Exclusive: Is 5G a threat to brick & mortar retail?

Will stores disappear as 5G takes hold of our shopping habits?

71% of store shoppers already turn to their phone to navigate aisles, read product reviews, compare prices, and checkout with a cashier-less payment The Kingdom of Bahrain will be one of the first countries globally to provide commercial 5G services by June 2019 The VIP experience could one day be digitized such as when technology facially recognises valued patrons when they walk through the door

Brick and mortar retail is warily looking to take advantage of 5G to stay viable in the face of increasing pressure on physical buying in real stores.

“Although the phrase “bricks and clicks” may seem somewhat outdated in the digital age, this is exactly what consumers today are looking for. They want to be able to switch seamlessly between shopping on their devices and visiting a physical store,” Muetassem Raslan, Regional Sales Director for Ruckus Networks in the Middle East and Africa, told AMEinfo.

“As lines between online and in-store retail experiences continue to blur, free Wi-Fi provides a way to continue the digital experience in-store, or vice-versa,” he added.

For her part, Dolly Lakhani, Sr. Marketing Specialist, SMB & Networking Division at TP-Link  MEA FZE, told AMEinfo:

 “From a consumer prospective, indeed the introduction of 5G is going to be a greater threat as E-retailers are increasingly enticing shoppers to skip going to stores with faster and cheaper shipping policies”. 

Read more: Exclusive: 5G-powered software will disrupt retail and give it a complete makeover

Do we have a visible trend today?

According to Salesforce.com, 71% of store shoppers already turn to their phone to navigate aisles, read product reviews, compare prices, and checkout with a cashier-less payment.

Retailers need to be hyper-focused on conversions during the crucial in-store shopping window that spans, on average, 20 minutes per visit, according to estimates.

This will mean having access to advanced and real-time information about clients including shopping history and preferences, allowing retailers to influence consumer’s purchasing decisions, according to America Retail, a sector-focused media.

Personalised and targeted signage is also going to be increasingly important, as consumers crave a customised in-store experience, the media said.

“Tailored content tied to demographic data, dwell time, purchase history, social media engagement and seasonal specials can help increase how much the customer actually buys — delivering increased revenue to the retailer.” 

5G Challenges 

The Bahraini Minister of Transportation and Telecommunications, Kamal bin Ahmed Mohammed said the Kingdom of Bahrain will be one of the first countries globally to provide commercial 5G services by June 2019, one year after successful trials were completed.

With regional governments announcing their 5G intent, traditional retailers need to rise to the challenge and cater to the needs of the tech-savvy, mobile-focused legions of modern shoppers.

The opportunity is that, according to a recent Ericsson report, 5G networks can help solve the increasing cost of retail space driving a move away from significant in-store stock to storing in central warehouses. 

The GCC’s retail sector will grow by 25% to $313 billion by 2021, according to Alpen Capital, while Deloitte projects the Middle East e-commerce market will triple to $49 billion by 2021.

“I still feel Brick and Mortar will not face that big of a threat in the Middle East because visiting malls and shopping is embedded into our culture,” Narendra Menon, Managing Director at Nikon MEA FZE, told AMEinfo. 

“But yes, brands will need to get smarter and reinvent their retail spaces to give the consumers a holistic product experience and not just a billing station for sale.”  

The major hurdle facing brick and mortar retail is that with e-commerce expansion thanks to 5G, the convenience of shopping from home increases exponentially.

Read more: Exclusive – 5G-powered retail: 3 mind-blowing tech that will transform UX

 

What could offline shopping do? 

While 5G implementation is not set to be ready for commercial use until mid-2019 to early-2020, it is still imperative for retailers to begin now. 

Meeting the 5G challenge could happen if certain changes are embraced, leading to transformative experiences. 

Interactive fitting rooms:  Using touch-screen interfaces that allows shoppers to request different clothing.

Messages: non-intrusive and relevant messages to potential buyers while they’re in the store such as trends, tips, discounts, rebates, or in-store offers.

Interactive storefront windows: Replacing windows with Interactive touch-screens linked to motion-sensors to lure customers and invite them in.

Heat seeking data:  AI-driven algorithms based on body heat can help retailers understand consumer movements and engage with them.

Looking at improving the users’ experience will be crucial. 

Tailor-made shopping 

According to Diginomica, a digital transformation media, 5G will enable marketers to achieve real-time, radically personalized, and predictive engagement with customers. 

“For example, salespeople in a retail store can be armed with layers of information about your behavior and preferences, and can immediately create a rich, tailored shopping experience,” Diginomica said. 

That’s a far cry from a digital ad pushed to your email account. 

“The time of operating ‘goods’ is going to pass as the time of operating ‘customer personalities’ arrives,” Shawn Jin, International Marketing Specialist at Neffos, told AMEinfo.

The VIP experience could one day be digitized such as when technology facially recognises valued patrons when they walk through the door and transfers image via IoT systems to alert staffers to their presence so they can provide the catered experience these clients expect.

“However, for it to work in-store a reliable wireless connection, that can cope in even the busiest shopping periods, is essential. Customers need to see the in-store experience as being as seamless and simple as the online experience,” said Raslan.

Augmented shopping

According to ADWEEK, thanks to 5G, retailers need to guarantee via Augmented Reality assets and appliances, the ability to complete in-store purchases, order delivery anywhere at any time and offer regular digital updates from the retailer about where their packages are in the delivery scheme.

Majid Al Futtaim, one of the Middle East’s leading retailers, is leading the digital transformation of the region’s retail market.  

Dubai-based Majid Al Futtaim is digitally transforming its Carrefour brand experiences for over 750,000 daily customers with global technology company SAP. Carrefour now has one digital platform that integrates over 100,000 products on its website, in-store kiosks and tablets, and mobile app. 

“Our digital transformation with SAP enables our customers to order online or from our mobile app and have them delivered to their doorstep,” said Marco Antonio Urios, Senior Vice President, Omnichannel Solutions and Supply Chain at Majid Al Futtaim Retail.

Enhancing Omni-channel

Dr. Hichem Maya, Head of Industries, SAP MENA, told AMEinfo that In 2019, Middle East retailers are digital transforming to enhance omni-channel customer experiences with emerging technologies. 

“Middle East customers expect to interact with retailers as easily, quickly, and conveniently as any social network or digital company. Retailers can find the biggest benefit in combining AI, machine learning, blockchain, IoT, and AR and VR on one cloud-based platform,” he said.

“5G is the foundation for Middle East retail digitization, with ultra-fast network speeds enabling retailers to operate in real-time, to personalize offers based on customers’ shopping history, to optimize back-end manufacturing and supply chains, and to enable digital procurement platforms,” Maya added. 

SAP also co-innovates with Middle East retailers LuLu Hypermarket, Sharjah Cooperative Society, and SOUQ.com on transforming experiences.

Lakahni said “With 5G, the companies and retail stores will have access to highly advanced capabilities that go way beyond just the omni-channel approaches.” 

“The introduction of 5G may initially appear to be a threat for brick and mortar, but it actually has the potential to breathe new life into the paradigm around retailing…keeping the basic behavioural values in mind.”