The impact of 5G on retail is all about automation and data insights

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The retail sector has been going through a transformation process triggered by digitalization for over two decades — long before the arrival of 5G.

Scale is no longer the single deciding factor for retail success and profitability. Rather than just selling products, leading retailers are expected to deliver services and experiences. Interactive and ongoing customer engagement during the pre-sales and post-sales stages is the new benchmark to match. From a retailer’s perspective, it’s all about automation and data insights.

5G promises to support this transformation at several layers — in addition to enhancing supply chain and back-office operations. 5G will speed up the transformation of the retail sector by delivering technology building blocks for frictionless end-to-end experiences.

In discussions with retailers, Forrester observed a broad range of benefits that 5G will support, including:

  • More cost-efficient store connectivity. Retailers are exploring 5G to connect their stores and to deploy more cloud-based solutions for mobile store workers.
  • Better supply-chain transparency. 5G can help reduce inventory distortion by improving supply-chain transparency thanks to its mass-communication capabilities for IoT sensors. The massive machine-type communications feature of 5G improves product tracking solutions.
  • Improved customer online experiences. 5G bandwidth and speed open the potential for improved customer experiences. At a very basic level, 5G will help improve conversion rates for online customers due to faster connection speed and page load times.
  • More detailed customer insights. By tracking many more sensors in shops, home environments, and outdoor environments, 5G can add value to insights generation and usage. These data-based insights open possibilities for mass-customized and relevant services for consumers.
  • New types of customer engagement. 5G facilitates new possibilities for retailers to interact with consumers via their smartphones. Retailers could “guide” consumers through the physical store via an augmented or mixed reality overlay on their smartphone screen to the exact location of their product of interest.
  • New forms of commerce. 5G will improve the connectivity infrastructure for emerging shopping methods. Virtual assistants open an additional channel for the consumer to communicate with a brand via virtual and voice commerce.
  • Improved product delivery to consumers. Naturally, the experience of purchasing digital products like eBooks, movies, music, or podcasts could be a lot better with 5G. In addition, 5G’s ultrareliable low-latency communications will enable retailers to explore new product delivery options.

Forrester believes that 5G has the potential to speed up the transformation of the retail sector by delivering important technology building blocks to frictionless end-to-end consumer experiences in the form of enhanced mobile broadband, massive machine-type communications, and ultra-reliable low-latency communications.

Yet the future of retail does not depend on 5G. Today, most digital retail strategies are based on connectivity technologies such as 4G, Wi-Fi, RFID, near field communication (NFC), and Bluetooth. 5G will become an additional connectivity option in the coming years.

Forrester’s report, “The CIO’s Guide To 5G In the Retail Sector,” provides examples of potential 5G use cases in retail and provides advice on how retailers can overcome the existing challenges when exploring the potential of 5G.

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