With their Future Stores, Alibaba and Walmart have shown us what "shopping" may look like in the future. Sensors and cameras capture in real time what happens in the store, allowing employees to determine how many items of a product are currently in stock. Or when shelves need to be stacked again. Artificial Intelligence prevents food from spoiling and allows the market to honor its freshness guarantee.
At Hema, Alibaba's new supermarket business model, customers can do their shopping entirely via smartphone (in German). The only thing that shoppers need to scan products, get product information, and pay at the checkout terminal is their smartphone. Online purchases are carried along overhead conveyor belts to the collection point. And customers in the supermarket's restaurant are served by robots.
So much for the highlights of the first future stores. Now let us go back to everyday life in today's world.
Digital shopping centers need a stable network
Retail has faced up to the challenges of digitalization long ago. There are many areas in which change is happening.
Consumers are becoming increasingly demanding and expect high connectivity for their smartphones throughout their shopping experience. So stores will continue to change. More and more devices and business processes are intelligently networked: to ensure greater freshness, better service, and greater margins.
"Multi-channel" is another buzzword. It refers to business models where online shops and brick-and-mortar stores are fully interconnected, as customers expect retailers to be present across all channels.
A unique shopping experience
Digitalization facilitates many new applications. This includes connecting stores with a large number of sensors and actuators as well as using image and pattern recognition, Augmented Reality and robotics.
Technologies such as Virtual Reality, the Internet of Things, or robots can contribute to a unique shopping experience and optimize the retailer's business processes. However, these solutions require high bandwidths (in German) combined with high transmission rates in order to realize their full potential. Without them, all these applications will only be able to use a fraction of their true potential.
Now for a brief look into the near future
With our existing LTE technology, we can already cover many areas of application. But what happens if the bandwidth requirements keep going up? What if 200 Mbit/s are no longer good enough and only Gbit/s will do – as is already the case with augmented reality applications, for example? What if networks no longer contain a mere 10,000 devices per km², but rather 100,000 or even 1 million? And what if the use of real-time applications continues to grow too? Let us see what the near future may look like.
The new 5G technology is what retailers can benefit from here. It provides the properties and functions in the network that are the basis for new generations of applications and digital innovations. 5G is more than just a new mobile network technology. It provides a high-quality link between information and telecommunications technology. 5G networks, and in particular 5G campus networks, are highly flexible and can be adapted to meet the requirements of applications. Do response times need to be short, but is only a small amount of data to be transmitted? With the 5G campus network technology, the network can be optimized to do just that. Combined with consistently great reliability, this will help retailers to continuously monitor cold chains using sensors, for example.
There is of course no such thing as the one 5G application that all by itself will push retailers to use 5G technology. However, looking at several related applications, makes us realize the enormous potential that 5G technology has to offer. Digital shopping centers are a case in point. Here, many application cases can be found all at once, from building technology to security or logistics and through to customer experience.
Examples of how 5G can help retail
For the textile industry, improving and personalizing the in-store experience is one of the ten most important topics in 2020. Augmented Reality (AR) offers with interconnected mirrors and cameras are to enhance the future shopping experience. These offers give customers an idea of how a piece of clothing is supposed to be worn. The networked mirror shows them which color looks best on them or what the next sofa could look like in their living room.
For 93 percent of retail CEOs personalized marketing is a priority. They are aware that leading retailers can improve their sales in this way. Increasingly, consumers are best reached via their smartphones.
All this cannot be achieved in shopping centers without fast and stable connections. And that is precisely what 5G can provide – both before and during the actual purchase.
Much is happening in the area of internal business process optimization too. With the pressure on margins and labor costs increasing, retailers can benefit from digital advertising, cleaning robots, and automated planning systems for goods. Automation can already save as much as 55-65 percent staff hours at a typical retail store, enabling new jobs to be filled instead. When an intelligent network is created in a retail store through digital solutions, there are usually many devices and sensors that communicate with each other. And they all rely on a stable network. 5G can meet these requirements for high bandwidth and low latency. The technology is said to be able to interconnect up to one million devices (in German) per square kilometer.
New opportunities for logistics
5G also opens up new opportunities for logistics. Retailers are increasingly interested in assessing the quality condition of their products at every step in the delivery process, which means full transport monitoring (in German) in real time and on-time arrival of the goods. This can already be achieved today with existing tracking solutions.
For transport on company premises, the use of autonomous guided vehicles (AGV) – both outside and inside of buildings – is becoming more and more widespread. This practice can be supported by company-owned 5G campus networks.
Trucks accessing the premises from the road are of particular interest. What is needed here are ways to determine an optimized route for the trucks to reach their final loading dock. Here, too, 5G networks can help in the future as they allow the position to be determined with centimeter precision. This greatly reduces waiting and loading times as the trucks are guided even before they enter the premises.