retail
CHAPTER 5:
DISCOVER MORE
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Retail is perhaps the sector that has been affected most by technology, with the rise of online shopping often blamed for much of the decline of the UK’s high street.
However, 5G promises to help stores create new experiences through the use of avatars, while reams of data collected from sensors can be used to provide greater insights into supply chain efficiencies and inform store layout.
executive summary
Main impacts of 5G on retail
Powering AR and VR in retail - augmented reality can make in-store marketing more engaging
Understanding the consumer - Data collected from 5G sensors will inform decision making about consumer habits, promoting more efficient store layouts
Automation - Payment automation is a real possibility, allowing customers to simply choose an item and pay while walking out
Supply chain - The internet of things will create efficiencies throughout the supply chain, allowing retailers to manage their stock better.
The biggest impact of 5G on retail will be: Improved data collection and analytics and better understanding of consumer habits
More efficient store layouts
Empowering vendors to become product experts and demonstrators
Augmented reality for marketing and virtual stock presentation Increased efficiency in supply chains through automation Improvements to town planning resulting in more footfall
Payment automation which lets customers purchase goods simply by walking out of the store

All in all, it is estimated 5G will lead to:  Almost half of all stores adopting AR solutions by 2020, with 100 million customers using this technology  A global impact of up to $1.2trn from the implementation of IoT in retail spaces
BIGGEST OPPORTUNITIES OF 5G
Failure to adopt 5G enabled solutions will see brick-and-mortar retailers continue to lose out to the e-commerce sector. which will reap the enormous benefits of 5G
Over 40% of retailers have cited security as a barrier towards full IoT and analytics integration, and more than a quarter aren’t confident in the ROI of investing in these technologies
These perceptions may see the sector lag behind projected value capture forecasts in the long term
CHALLENGES
Andrew-Martin
Andrew martin
partner - Addleshaw Goddard
Andrew is a partner in Addleshaw Goddard's Real Estate team and co-head of the Real Estate division's Retail sub-sector.
INTRODUCTION
HOW WILL 5G IMPACT RETAILERS AND LANDLORDS?
HOW WILL 5G AFFECT CONSUMERS?
WHO’S ALREADY OUT THERE?
The Investor's perspective
I am a tech-obsessed sceptic. I am keen to embrace the new but also deeply cynical of any technologies until they are genuinely useful. Just look at the huge investment in shopping centre apps over the last few years that have failed to deliver any real benefits. Because we at Ellandi are small and agile we have been known to trial and disregard a number of ideas. A good example was iBeacons. The promise was to be able to give you dynamic interaction with customers as they walk around your schemes, tracking them and using that information. We had a successful leisure scheme next to an older shopping centre, so we used iBeacons to encourage people to go to the other end for a reward which could be used in a restaurant. We were doing it through GPS originally and it worked well, then we tried to transfer it to iBeacons and the tech didn’t work. It even reputationally damaged the app we had. Augmented reality is another example. We installed a game – Spyquest – in our Falkirk and Romford centres to entertain children. In the end, while a nice idea, it hasn’t moved the dial.
For me 5G and better connectivity will be all about being in the background and making life more convenient - removing friction – for shoppers. It’s about improving the customer experience, but effortlessly, so a customer in a store can have immediate information about stock availability, or phones can automatically sort parking tickets. We also need to ensure the information we will harvest is used more productively. Wifi is a case in point. It has been rolled out across all centres, but is the information used effectively? Not really. Digital retailers have been good at customer and data acquisition to effect behaviour. Physical retailers and landlords less so. What we need is very accessible tech making life simpler, without all the massive investment. For instance, we are trialling some new technology which will do footfall counting, purely off a smartphone. While there are some estimates (not everyone has a smartphone) we can get the answer to within 1-2%, without the physical investment of counting footfall.
How it could work
Longer term there are bigger applications, but that will take time. For instance, if retail is going to cut down on the amount of people in shops, can we use 5G to empower staff? If there are no tills or need for stock control, staff could be empowered to be demonstrators and salesman. Furthermore, if we a have a digitally enabled and purposeful consumer – they have many options to buy it through the thing in their hand – we need digitally empowered sales staff that can negotiate with the customer. This is one of my frustrations with tech: its high margin, swanky, and destination oriented, aimed at occupiers and owners who have the bandwidth to invest in it. Potentially disruptive 5G will create something that makes a penny off 60 million people regularly, than £1 off 250,000. People wrongly think the internet is killing retail, and tech is the solution. 5G will not get rid of the problem that, in the end, too many town centres are the same. The secret of town centres is not to make them just about retail – it's about alternative complementary uses. 5G is a part of that and it can link in and engage the customer, but for me it is part of a far wider series of changes.
The future
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For me 5G and better connectivity will be all about being in the background and making life more convenient - removing friction – for shoppers.
Mark-Robinson
mark robinson
property director, Ellandi
The Brands’ Perspective - Ted Baker
Brand strategy and the 'omni-challenge'
Unsurprisingly at the heart of our business and strategy is our expertise and commitment to providing a quality experience - and we mean beyond our designs and products! From day 1 we have been committed to providing our customers with a shopping experience which is not only laced with Ted’s creativity and flair but which truly feels personal.
As we have grown, we have increased our retail and distribution channels; we have chosen to undertake a controlled expansion into new markets both through stores across our three channels and online. As a result, we have an enhanced omni-channel capabilities. With 560 points of sale globally and an increased spotlight on technology and our ecommerce offerings, maintaining our tailored approach is inevitably a growing challenge. This challenge is amplified by the fast paced change in consumer behaviour and demands which we have seen more starkly in recent times. It is fair to say that most of our mono channel customers, who traditionally only shopped in store have converted into multichannel customers, who not only make multiple purchases through our multiple retail channels but who also interact with us more regularly from a variety of mediums. The ever evolving digital consumer presents Ted with the following key 'omni-challenges': 1. How do we continue to engage customers with tailored shopping experiences that feel seamless across our channels? 2. How do we ensure we stay more connected to our brand than our customers? 3. How do we ensure that our brand offering remains relevant to the modern consumer’s habits? Will 5G offer an 'omni-solution'? The implementation of 5G isn't the only answer to the challenges retailers face. However it will certainly help alleviate some of the practical issues which relate to 'omni-challenges', such as the ability to capture the right data in the right place more quickly. We hope that 5G will also will enable us to better leverage our existing technology, such as our inventory management solutions and customer insights. If 5G can diminish delay times from our solutions allowing them to truly operate in real time, the value will be exponential. There is a lot of misnomers in the collation of big data owing to the conflation of causation and correlation. The easing of data touch points through faster server speeds, can help overcome this as we can identify nuanced information more easily. Not only will it allow instant communications and insights to be sent across multiple layers of the business it will also facilitate more efficient and accurate decision making. We also hope 5G will give us a more stable and robust framework to trial new technology as well as providing us with the tools to enable a streamlined and aligned implementation process. How is 5G and tech going to improve customer experience? As 5G enables intelligent platform services to advance their technology and ability to provide data insights we can build a very clear picture of our customers and we will have the opportunity to communicate something of real interest or relevance.
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Technology can help with the personalisation challenge improving customer experience by offering visual and immersive interactions based on specific insights and data. This could be in store and through advertising or social media etc.
As the customer base diversifies in how it interacts with the brand, our key technological developments will be focused on stitching these information sources together to create a confluent data stream. Where could fashion retail as a collective industry use tech over the next 4-5 years? Sustainability! The provenance of a product and its supply chain is important, if it is not transparent we will lose loyal customers. Ted's focus has always been to do the rights things in the right way and technology can only help us achieve this more efficiently by providing us with a closer look at our supply chain and solutions in relation to returns / unsold stock. One example is mapping our supply chain to become more transparent. We’re incredibly proud to now be publishing the first tier of our supply chain to allow customers to make an informed choice about shopping with Ted. This was a data-intensive process in an ever-changing environment. Tech assists in speeding up communications, making record keeping effortless and ultimately allowing us to have a more bilateral relationship with suppliers.
How property managers are taking a lead in improving connectivity
Nick-Jones
nick jones
Head of Property Management, Grosvenor Estates
Interview
On a new development it’s relatively simply to create the infrastructure you need. Grosvenor, however, has the challenge of upgrading heritage buildings in landmark locations that are occupied by world-leading occupiers and residents. As Nick Jones, head of property management at Grosvenor Britain & Ireland explains, the company recognised it needed to move the dial to get itself 5G ready and has been able to make a valuable impact in a short space of time. He says that solutions don’t have to be expensive but do require time, effort and a high level of collaboration.
Q. What was the impetus for signing your groundbreaking deal with Openreach?
A. We spent a lot of time directly engaging our customers, and the feedback was that they wanted better, faster, more reliable and more affordable broadband. We knew that in addition to tenants, visitor connectivity was also becoming key for experience and favourability towards retail and cultural destinations. We realised that taking a traditional landlord view that connectivity was “a tenant issue” was no longer valid. Understanding that we were in bottom 5% was not compatible with our long-term strategy to be landlord of choice, and so we set about collaborating with our customers to fix it. We actually now have two delivery and technology partners which provides choice for customers and enable us to manage the complexity of a large estate giving us flexibility as we move into the realms of 5G. As well as OpenReach, we also have Prime Fibre which offers a 1 gigabit (1,000 MBS) “symmetric” connection – which means you get the same upload and download speed – enabling you to upload data, such as video or music to the internet while also downloading large files. The take-up rate of 38% for Prime Fibre 18 months into our agreement was more than double the industry standard.
Q. What progress have you made in the two years since launching?
A. We are half way into our investment programme and have rolled out super-fast broadband to the majority of our estate, which covers much of Mayfair and Belgravia in London, including public access to WiFi, to support our retail destinations and public spaces. The next half will see us continue to overlay this with ultra-fast broadband – at gigabit speeds – cementing our shift from the bottom to the top 5%. We’ll be continuing rolling out fibre broadband to premises as we recognise that just as companies want to enjoy the heritage and history of the West End, they are competing on a global stage where connectivity is king.
Q. What could landlords be doing now to prepare for 5G?
A. Whether it’s 5G or any other future tech solution, landlords will need great digital connectivity to the building. The opportunities are only just starting to be understood but landlords first need to understand the connectivity of their buildings and then take proactive steps to address any issues - in conjunction with their occupiers.
Q. How can the property sector meet some of the challenges of older buildings?
A. Landlords and telecoms providers must work in collaboration to realise the enormous benefits that 5G a can bring. Communications providers deal in cables boxes and antennae – not easy things to incorporate into heritage buildings – and there has to be consideration and coordination. We believe that traditional landlord view of communications providers is no longer relevant. Connectivity and new tech are important to occupiers and landlords need to recognise this. The ability to benchmark performance will make it easier for occupiers to pick a property based on its connectivity and we as an industry, need to be ready for that.
Q. What should be done to better support improved connectivity?
A. The Code Powers are designed to make it easier for operators to roll out infrastructure and remove blockers from landlords or planning committees to benefit consumers and businesses. These have been controversial in some areas. Some proponents state that it gave a lot of power to the infrastructure providers so that where landlords and telecoms firms were already collaborating, more harmonious relationships were slightly destabilised. Had they all been working together in the first place, there wouldn’t have been need for the power switch.
Q. What lessons have you learnt so far in the project that others can benefit from?
A. As a customer-centric landlord, we could no longer turn blind eye to connectivity issues. The West End is a major economic centre in the UK and our role as stewards for the district is to ensure that we can always stay one step ahead. We have had invest to ensure future proofing. It’s still surprising how many landlords – institutional, large-scale and private – still treat this as a tenant issue. But it is the landlords’ responsibility and the whole sector needs to make this shift as part of improving our reputation. As part of the roll out of fibre we have future proofed the estate for the arrival of 5G. Crucially, there is no need to dig roads outside our properties – 5G boxes and antennae can just be added for a swift and painless roll out.
Having gone through this process, we are now in a great position when 5G comes and are hugely excited that so many of our occupiers are so satisfied with the results.
Q. What’s been some of the feedback?
A. Lucy Attwood, Director at Studio Pottery London, started her business two years ago. “We’ve been running as a mobile studio throughout the UK. As the business grew, we wanted a permanent home where we could run our classes and gallery,” she said.
“In Eccleston Yards we found not only the space we wanted, but also an inspiring hub of creative independent businesses to learn from. Through careful planning and the right introductions, we were able to fit out and set up in just four weeks. We are also connected to the estate’s ultrafast broadband which has the highest internet speeds I have worked with in London.”
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©2019 Addleshaw Goddard LLP
How is technology affecting retailers
Avishai_Moor_03
Avishai Moor
Founder and CEO, Distinctive
Interview
Q. How will technologies like smart shelving going to affect retailers? Is this really a game-changer?
A. Changes in technology are already having an impact on the customer journey. Grocers are currently trialling "no checkout" stores through mobile apps, handheld devices or shelf sensors. The cost pressures of running physical shops aren't going anywhere so I expect that we will continue to see technology being integrated more and more into store operations to create efficiencies that could be then invested in lowering prices. In that respect, technology is a game changer, as the ones that do not transform their operating models will find it harder to stay competitive in the future.
Q. Obviously there's a cost element. Is technology just for high-end retail, or can it be applied to lower-margin sectors?
A. Technology is used across the retail price spectrum with different use cases for high-end vs. low margin retail sectors. In high-end fashion, you would use technology to improve your stock availability and enhance customer fulfilment options (e.g. Click & Collect or buy in store and get it delivered to your home later), to ensure you do not lose a sale just because the item is not available at that specific store at that moment. Technologies such as RFID (radio-frequency identification) tagging can provide that stock visibility but due to costs, it is still difficult to implement them in the lower margin sectors. In these cases, you see a focus on technologies that are more financially viable for larger estates.  Use of mobile shopping apps in store, as an example, is scalable across the estate and in city centre convenience stores as an example, can increase a store’s selling space by up to 20%. Use of cameras and sensors in Amazon Go stores also requires less labour cost to operate checkouts and also helps to run a more efficient supply chain through real-time on-shelf availability information.
Q. Is this just about practical things like supply chain management? Can it be used to affect the customer experience?
A. It is definitely about both as retailers still need to attract customers to their physical shops. A better supply chain supports a better customer experience through better product availability, more fulfilment options and also through more flexibility in sourcing options. The last point is not discussed as often but is important as it means that your supply chain can support products reaching stores and even end customers through different routes and not only through the traditional retail distribution centre. There are many developments outside the supply chain. Customers’ in-store route planners and mobile scan & shop applications are already being trialled and used as retailers look to become more ‘channel-neutral’ and offer customers a seamless experience across different touch points.   AI will also play a greater role in making the shopping experience more relevant. Customers would spend more of their shopping time on ‘value added’ activities, such as reviewing personalised product recommendations, helpful information and real or digital product usage demonstrations. The other elements of the shopping journey will be automated by connecting smart devices at the customer’s home to the retailers system, enabling automatic fulfilment through subscription services.
Q. Is this all in the future? What are people doing now?
A. The retail industry is going through a massive structural change so this means that changes have to take place now. You can already see some of them in stores; supermarkets used to have a big customer service desk but now you can see roaming customer service colleagues equipped with tablets, while the free floor space being used as selling space. Sainsbury’s just relaunched its Nectar app, enabling mobile phone scanning at the till, instead of physical card wiping. This is important as it allows Sainsbury’s to offer a more integrated and personalised shopping experience in-store and online. Tesco is also relaunching Clubcard and will link more of its services together, such as clothing and Tesco Mobile to offer its loyal customers more value. These are just recent examples of how technology is already impacting the customer experience and is much more to come.
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Go Instore
Andre-Hordagoda---GoInStore
ANDRE HORDAGODA
GO INSTORE
Q. Can you describe what Go Instore does?
A. Go Instore, founded in 2014 by Andre Hordagoda and Aman Khurana, is a leading provider of immersive retail experiences. We work with brands such as Dyson, HP, Currys PC World, Porsche, MADE and others to bridge the gap in customer experience, lifting conversion rates in the digital channel, by engaging the physical store. By combining HD one-way video with two-way audio, online customers can now connect with live in-store staff and receive an expert guide on products and services, tour showrooms, ask questions and more. Our technology uses smart filters such as affinity rooting to humanise the customer journey, breaking the barriers between online and in-store experiences, delivering improved engagement and propensity to buy.
Q. How does it currently use 4G? How will it use 5G? Can it aid your product?
A. Each year more and more of our clients' customers are using their mobile devices to communicate, whether that be with friends and family or businesses. Our service is connecting online consumers to in-store staff using HD live video; naturally, we're reliant on network coverage and speeds to provide the best possible service. Although 4G has been great, 5G will bring significant improvements in speed and video rendering quality; additionally 5G would mean we don't need to get onto, often locked down, corporate networks meaning we can deploy our service quicker on the instore installation side.
Q. How could it potentially allow new directions of expansion in the retail sector?
A. The disparity in conversion rates between online and in-store can be partially attributed to the one-dimensional nature of online shopping. Brands like HP are using our live one-way-video, two-way-audio technology to immerse online consumers and expand their digital offering. 5G's improved bandwidth will deliver higher resolution and reduced lag with almost instant connection capabilities, allowing us to roll out innovative features such as 180/360 streams, the ability for customers to purchase products directly from within the live Go Instore session - and more.
Q. What are your biggest concerns for Go Instore and its development?
A. 5G will allow companies to take the next step in consumer communication, evolving from traditional text bots to live video/audio chat. With that in mind, demand is likely to multiply, so we need to be in a position to take advantage of this and remain at the forefront of the omni-channel transformation.
Q. What do you want to see coming from 5G?
A. Unlike modern cellular networks which focused on providing the best network coverage to popular cities, we'd like to see 5G rolled out to include as many locations as possible. We want to bring the most immersive retail experience to customers no matter where they are in the world, humanising relationships between brands and consumers; we're hoping 5G will help us deliver these experiences to people in rural areas who can't typically visit their favourite brand stores.
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