From the everyday quest for groceries to the thrilling pursuit of the latest designer dresses, countless customers embark on a journey to fulfill their needs and indulge their desires. In this retail adventure, Customers majorly opt for two distinct channels: Conventional Brick and Mortar stores for customers looking for exceeding personal experience and e-commerce for customers who are always looking for more options and convenience. However, the line between the two sales channels is becoming increasingly fine. Customers are looking for more homogenous offerings with a mix of two channels in an already volatile retail landscape. The recent retail trends also suggest a relatively normal distribution of revenue contribution from both channels, with worldwide e-commerce sales expected to reach nearly $7.4 Trillion by 2025. If only Retailers had a reality stone, meeting customer expectations might have been more manageable, but worry not the 5G network has come to the rescue. In this blog, we will discuss in detail how 5G for Retail enhances our shopping experience.
Challenges in Retail
Lack of Customer Insights-
Limited access to data is a crucial challenge faced by retailers. According to a recent study by Mapp, 54% of marketers surveyed identified insufficient customer insights as the biggest obstacle to a successful customer experience strategy. This lack of customer insights results in ineffective marketing campaigns, underwhelmingly designed products, and unsatisfactory customer experiences. Customers want all the options today, and brand loyalty is rather cumbersome to achieve and maintain. Therefore, it has become essential for Retailers to gather and analyze data and generate insights from it constantly. There now exists a 'race' for which retailers analyze and leverage new information the earliest, and 5G for Retail can help retailers win every time.
Unexciting Retail Experience:
In a highly competitive retail environment, the store's ambiance has a significant dollar impact on retail enterprises. A recent study by PWC found that nearly 75% of surveyed shoppers stated that in-store experience is a key factor influencing their final purchase. Savvy e-commerce customers prefer more options and avoid waiting in long queues for billing. At the same time, they want a unique personalized experience and friendly staff facilitating their purchasing decision. Fostering an engaging shopping experience whilst meeting customers' expectations is quite a challenge faced by a majority of retailers today. The result is reduced sales, lesser footfall, and lower customer loyalty, in other words, a retailer's worst nightmare come true.
Inventory Mismanagement-
This is a significant challenge faced by retailers. Inaccurate forecasting and inventory monitoring often lead to overstocking or understocking of inventory, which results in substantial financial losses, negative brand association, and customer dissatisfaction. Overstocking binds valuable resources such as space and capital, which the business could have used better. Also, these excess products are often marked down in clearance sales leading to lost profit margins. Understocking, on the contrary, leads to lost revenue and potential long-term customers. Retailers also have to monitor the quality of stocks. Expired or defective goods can negatively impact the brand image of enterprises.
High Operational Cost:
Operational Costs for retailers become excessively high due to indiscreet and inefficient use of resources such as lighting, heating, and air conditioning. This can become incredibly challenging for retailers with stores in multiple locations, accumulating more OpEx and cutting the profit margins for the enterprise. For instance, keeping the lights or A/C switched on when not required, using outdated appliances, and not utilizing energy-saving practices impact the business's 'bottom line' and adversely affect the environment.
Inefficient Supply Chain
A slow and ineffective Supply chain contributes to higher transportation, warehousing, and inventory costs, eating out of Retailers' profit margin. Furthermore, lack of visibility and control over the movement of material in a supply chain cause damaged and delayed delivery, higher lead times, and unnecessary bottlenecks, inducing order cancellation and customer dissatisfaction. It is inherently essential for retailers to deliver products timely and accurately, and therefore retailers must invest in efficient supply chain management.
Use of 5G for Smart Retail
New Product Development-
In the context of Retail, new product development is very challenging. It requires identifying the needs and preferences of a heterogeneous set of customers and designing products that satisfy those requirements. Enterprises can collect and analyze customers' data using new-age IoT sensors generating valuable insights on customer profiling and behavior patterns.
However, such systems require significantly lower latency between devices for faster transfer of data and analysis. Reliable and ultra-low latency 5G networks facilitate real-time, enhanced connectivity across several IoT devices for capturing customer insights optimally. One such use case is 5G-enabled cameras and sensors to track the customer's movements inside the store, identify the products they are interested in, and analyze their buying behavior and new shopping trends. AI algorithms can scrutinize this data and give suggestions for developing new products. 5G for Retail gives the ability to analyze data in real-time, and businesses can respond quickly to changes in customer demand and develop new products that are more likely to succeed in the market.
Immersive In-Store Experience with 5G Technology-
In the world of Retail stores, experience is everything. Retailers must provide an immersive in-store experience to attract new customers and build customer loyalty. For instance, Retailers can use AR/VR technology to make a more engaging shopping experience for customers. Customers can truly visualize how the new shoes will look on them or which curtains will go with the sofa and have a more personalized shopping experience. However, to support this AR/VR technology, retailers require high bandwidth and low latency 5G networks for a truly immersive and interactive customer experience.
5G networks enable real-time interaction allowing customers to change the color of virtual try-on and even get suggestions for complementary accessories.
5G can also solve the problem of long queues at the billing counter. Using 5 G-enabled e-pos, customers get the flexibility to check out from anywhere, ultimately enhancing customer satisfaction and loyalty.
Efficient Inventory Management-
Retailers must ensure the right product in the optimum quantity and excellent condition is available for customers when they need them. 5G for Retail can help retailers avoid overstocking and understocking inventory, ensuring businesses appropriately utilize resources such as capital and space. 5G-enabled IoT devices and RFID tags facilitate Product life tracking for replenishment and discontinuity of products in real-time, avoiding lost sales and building long-term reliable customer relationships. The data from IoT devices can also be fed to an AI engine for analyzing and forecasting demands accurately.
5G Smart Retail Store
A smart Retail store helps retailers cut operational expenses using smart infrastructure and judicious use of resources. For instance, smart lights can be used to adjust the lighting levels in the store based on the time of day, the number of customers present, and the amount of natural light available. This reduces energy consumption and creates a more comfortable shopping environment for customers. To achieve this, smart retail stores leverage the high bandwidth and low latency 5G connectivity to support multiple IoT devices, which collect and process vast amounts of data in real-time. This data is used to make informed decisions and optimize the store's operations, resulting in improved efficiency and reduced costs.
Cognitive supply chain-
Leveraging cutting-edge technology to monitor and manage assets and resources in real-time using computer vision and sensors will allow retailers to deliver products timely and accurately. For instance, 5G enabled Computer vision technology to use cameras and sensors to capture and analyze visual data, such as videos and images, in real time. This information can be used in Retail to track the location and condition of assets at products, shelves, and equipment. Retailers can now have complete visibility and control over the supply chain, getting instant information such as the temperature and humidity of perishable products.
Conclusion
5G for Retail is revolutionizing the shopping experience by overcoming significant challenges faced by retailers, such as inventory mismanagement, high operational costs, inefficient supply chain management, and an unexciting retail experience. The technology facilitates efficient inventory management, enhances customer insights, provides immersive in-store experiences, and enables faster and more reliable connectivity across several IoT devices for capturing valuable customer insights optimally. Retailers can now analyze data in real-time, respond quickly to changes in customer demand, and develop new products that are more likely to succeed in the market. 5G networks enable retailers to provide a personalized and interactive shopping experience, resulting in higher customer satisfaction and loyalty. The next-generation technology is indeed a game-changer for the retail industry, and retailers that adopt and integrate it effectively will reap significant benefits in the future.