Perhaps more than any other sector, retail has borne the brunt of the changes wrought by the wrecking balls of new technology and, specifically, e-commerce. Yet the web is often unfairly used by some companies which are, in reality, just badly run. How often do you go into a store to be ignored by surly, unhelpful staff or see the most popular products sold out and not due back for weeks? Brands like John Lewis and Apple have prided themselves on service and, in the future, this will be the sole differentiator in an increasingly automated world.

A generation of people have grown up expecting “everything now” and this has fuelled major shifts in industries like fashion, where speed to market and marketing spend often trump quality and sustainability. It’s notable hearing Ted Baker distance themselves from this and indeed, they are one of the real success stories of the retail sphere over the last few years, successfully navigating a multi-channel shopping environment, while combining concessions and direct-to-consumer sales with distinctive styles, proven quality and a commitment to strong values. Although juice stores and barbers have stepped in to replace some vacant lots, the reality is we will need less physical retail going forward. Being able to understand just how much is the million-dollar question and one that no one has a definitive answer for. Where brands can use technology to monitor engagement and see how customers move between their digital and physical universes, this the challenges of navigating privacy laws and subjective views around what’s “too creepy” are evolving too. Many retail companies have grown organically over time, amassing warehouses and swallowing up other companies meaning there are many inherent inefficiencies in how they move stock around or serve customers. 5G won’t be a silver bullet for any of that, but what it will do is spur on a host of consumer innovations and back-office transformations that enable more companies to retrofit their businesses with some of the feats companies like Amazon pioneered. Principally, innovations around inventory management and logistics will have the greatest impact, although a host of companies are focused on combining all manner of functions such as customer loyalty (being pioneered by Coniq), footfall tracking and predictive analytics, designed to help companies preempt demand. While 5G is new, many of the technologies it will bring are continuations of 4G. As more products become connected to the web, tracking goods and reducing theft or waste will become easier and sharing information (so that people can Google search a physical store’s stock levels) could be really handy. However, network capacity will be key. Inevitably the future will continue to see more physical exhibition and entertainment space designed to promote goods that may be sold later online. Physical stores have long been living breathing billboards and that’s likely to be cemented further by 5G. The theatre of shopping is something we still enjoy and this is where AR and VR could play a role if the consumer tech arrives in the right form. “Our retail partners will obviously take control over everything inside their stores, but given the focus on fashion and luxury brands, we should expect to see a raft of innovation, whether it’s around virtual dressing rooms or AR-visualisation tech, so people can personalise products or the potential to alter in-store environments to suit the needs or moods of customers,” predicts Mark Nallen, head of technology and innovation, Canary Wharf Group. However, we first need to recognise that retailers are going to first ask one very simple question: “How much is it going to cost?”

Taking a punt on new technology can be risky, so it’s likely that more partnerships will be created between landlords and tech providers able to nimbly plug-in their new ideas in exchange for having hordes of shoppers to try them out with. Stores are unlikely to invest in new infrastructure themselves and landlords will thus have to find new ways to commercialise this. The old-style leasing model has been under pressure for years and the likelihood of mall owners moving fully towards revenue-sharing arrangements or concessions, as used at airports, is high. The question for landlords though will be, “What’s the cost of not investing?” The need for them to enable future innovations (whatever they may be) will be critical if they want to maintain relevance. Many indoor areas suffer with patchy mobile coverage or slow public Wi-Fi - both things 5G will alleviate. Jose Antonio Aranda, Innovation & Product Strategy Director at Cellnex, says he is seeing more and more landlords paying for coverage. We will certainly see a rise in infrastructure sharing, bringing the cost of installing new kit that can be used by different operators. For landlords, ensuring they have fibre and the right blend of other technology in place will put them in pole position as and when meaningful innovation occurs. However, right now there is a degree of friction between landlords and mobile operators. At the heart of the tension is the new Electronic Communications Code (ECC). In December 2017, a new ECC was introduced, which aimed to make it easier for network operators to deploy and maintain key infrastructure such as phone masts, exchanges and cabinets on both public and private land. According to BT Group, “The new Code embodies a wider philosophical shift on the part of Government that connectivity is of key social and economic importance, so operators need improved access rights. Increasingly, hosting a mobile site is not purely a revenue generating activity, and is instead a means to benefit indirectly from access to the technology that the new site enables.” Whether it’s holographic in-store gigs in the few remaining record stores or virtual supermarket assistants offering wine-pairing advice at the cheese counter, hopefully everyone will get what they want from future retail. Many people will just be content with having whatever they need in their preferred size.

Since the 1950s, physical retail has just focused on the sales – the future is going to be exhibitive, demonstrative, instructive and entertaining. This has massive implications for staff, who will have to become experts in demonstrating or fixing products (or explaining features no one understands), while the space in stores will be essentially be used for marketing, demonstrating virtual and augmented reality. In fact, spaces can be what retailers think works best - for events, testing, community, leisure, DIY assistance – to get people into stores and looking at items. On the organisational side: the burden of bureaucracy and organisation will be hugely reduced, along with the cost of physical installation of new hardware in stores, as most of it has the potential to be wireless and in the cloud.

Any retail worker will tell you that inventory management can be one of the most tedious and time-consuming elements of retail, from stock-taking to storage to logistics. However, using the same technologies will revolutionise warehousing (see logistics chapter), in-store inventory can be tagged using electronic ID devices which provide instant inventory figures, sparing retail staff from having to work late to check stock. The systems that oversee stock figures will be able to use AI to analyse data on the rate of sales which allow them to order inventory from the warehouse and inform production. This human-proofs the supply chain and ensures the shop floor always has enough hot ticket items to go around. It’s also possible to dynamically connect inventory data directly to the customer, says start-up NearSt, a software start-up. Their platform enables people to Google a product and see stock levels in physical stores nearby. The company wants to make it easier for small retailers to help themselves as consumers will happily make a trip on foot if they have certainty they can get what they want. As NearSt co-founder Nick Brackenbury says: “There are so many amazing things you can do in a physical shop that simply aren’t possible on a five inch smartphone screen. We just need to make it super-easy for a customer to discover that the product is, in fact, there.” For workers, wearable devices may also help. Products such as the Nreal Light smart glasses allowing store staff to view the stock room with information overlaid, turning every clerk into the Terminator or Robocop of inventory management. Assuring the security of stock also doesn’t end in the back-room. Shop floors see breakage through employee and customer error (as well as theft), which cost in the year up to March 2018. Rather than displaying physical goods where they can be broken or stolen, AR adoption might soon allow retailers to display virtual representations of their goods in-store instead of the physical thing. This allows customers to view and interact with products without the retailer risking losses.

avatars

James Cameron’s hit 2009 movie Avatar was box office gold, becoming the highest-grossing movie of all time, a title it kept for 10 years. The concept of using an avatar is not new however. First used to describe the physical forms of Hindu gods, and more recently used to describe the virtual forms of video-game players, avatars are being eyed by retailers as the virtual form they will use to interact with customers. More than just a company mascot, 5G enabled company avatars will be expressive, full of personality, and are growing in popularity. 5G brings avatars to customers by removing the limitations that companies currently have in requiring downloads for digital content. After 5G, the moment they arrive at a store or shopping centre. This avatar might offer recommendations, list discounted items, and will be able to converse and interact through advanced AI. These avatars will be able to replicate the success of virtual celebrities, characters that have been taking social media by storm. Virtual Youtubers, or VTubers, saw their views , and the benefit of virtual celebrities over the real deal is that their content can be perfectly curated to drive engagement without limit. Avatars marry several ideas together. In appearance, they reflect the stylings of virtual musicians such as the Gorillaz and Japan’s Hatsune Miku, giving them attractive looks which engage well with younger audiences. On top of this, they exhibit the hyper-expressive personalities that have been trialed on corporate social media accounts for years. An example of this is the infamous twitter account of snack-cake brand MoonPie which advertising firm The Tombras Group used to . As the presentation of these characters becomes more lifelike, there will be increased consumer demand to interact with avatars over employees, leading them to become not only spokespeople and mascots, but the preferred point of interaction between companies and their customers.

changing car-parking

Despite everything, car parking remains one of the most contested issues around local retail. Many people agree that road use and parking, like any commodity, need to be properly priced as in many parts of the UK and USA, demand is not properly managed. The City of Vancouver has proposed a raft of new fees and strategies for ride-hailing firms in a bid to moderate demand and generate income. Drop off spaces for autonomous vehicles and shared transport will need to be properly monitored as pressure grows on roads and pavements.

customer data

Technically, all this will permit a complete understanding of the customer and shifting shopping habits, but only provided retailers understand what they can do with the data, and that there are no catastrophes with security. Video and pattern recognition of shoppers, interactive mobile apps, in centre tracking of smart phones, smart shelves – each piece of tech can provide a huge amount of data – but its knowing how to use that.

“The future will be around the kind of real time data you can get from that type of connectivity: how consumers are using your schemes, what shops people are going to and how they are engaging with them.” And this data will not just be about specific customers – it can be used to monitor competitors and other offers online, with AI potentially picking up much of the legwork. The first indications of displeasure with an item can be picked up by AI algorithms almost immediately. Likewise, if a competitor is offering it cheaper (think supermarkets), this can be flagged automatically and the price lowered across smart shelves across the store. If there are too many apricots for the season and stock is at risk of being wasted, prices can be dropped automatically. The difficulty will be in analysing it and using it effectively. The key is having the right knowledge chain and the right algorithms in place to pick up and act on changes. Security of data will also become an issue, as numerous high profile data breaches over the last five years have shown. And this will affect each company that collects personal data, not just the internet giants. From a property company’s perspective, there are two layers - ensuring legal compliance with people’s data, but then also being a responsible user and collector of data, and ensuring that is appropriately marketed to customers. Property companies will not just collect data, but also buy it, and the brokerage market can often be opaque about where that information has come from. They must be 100 percent sure of the origin or they can risk reputational damage. Assigning true business value to data will be essential. Each use must ask, is it mission critical, and how much am I willing to pay for it to ensure its validity? Bill Schmarzo, chief technology officer ITO & analytics, Hitachi Vantara, speaking at Hitachi Next 2018, said industry has suffered a long time trying to work out what data is worth. He said the classic practices of valuing data were based on accounting techniques, rather that the economic value of that data – or how much is can be sold for. He says businesses should not attack it from a data perspective, but rather from a business value perspective, figuring out what data they need. “If you are trying to attribute the value back of data, you need to use the value of the use cases to do that,” he said. “If customer retention is a problem for me, and reducing that by 5% is worth $50m, the five data sources I could use to do that, I could start attributing value back down to. “The real “ah ha” though was this: when you think about data as an asset, there is no asset out there like data. It never depletes, it never wears out, and the same data set can be used across an infinite number of use cases.”

supply chain

Behind the scenes, and perhaps most importantly for the bottom line for retailers, 5G will enable the smooth interaction between instore and online sales and all aspects of the delivery and supply chain. While the convenience retail offering will have less to gain from the immediate customer facing offers of 5G, it will still be able to profit better from improvement to supply chain management. All the supply chain will be micro-managed and monitored, from inventory to RFID tagging to the point of sale. This sort of technology already supports much of the back end of retail, but 5G will enable the AI and sensor tech to better manage that, and more cheaply install it, as Ted Baker notes. Legal & General's Soffair says: “At its most basic level, 5G will support the continued growth in mobile commerce, but it also has the scope to enable the development of new, and enhance existing, technologies around stock control, e-commerce delivery and monitoring building efficiencies. “Improved connectivity can help bring some of the advantages of online retailing (stock availability, product information, dynamic pricing) into stores.” Indeed, 5G and AI have the potential to make all of the supply chain more efficient. For example, if an item ordered online is then returned to a store, the system can determine if that should kept in store, sent back to HQ, sent to another store, or even re-sent out again if the store has a packaging facility. Likewise smart shelves can alert and even automatically order when an item is in short supply, ordering them immediately and reducing the chances of dissatisfied customers. This ‘just in time’ potential – and the ability to know where each item is in the supply chain - can potentially change how much space retailers need for stock and their physical presence, reducing costs, or allowing them to use it as increased sales space. Depending on the number of stores, such a network can be hugely complicated, but with sensor tech, AI monitoring and effective management systems the chain can be made faultless.

pop-ups

Pop-up retail doesn’t need 5G to be a success, raking in £2.3 billion annually and still growing while traditional bricks-and-mortar retail continues to take an Amazon-sized battering. Yet, as with other sectors in retail, 5G will help make running pop-ups easier and also allow operators to broaden out what they offer consumers.

From an operator perspective, the arrival of 5G mobile will mean having a super-fast, but crucially, reliable way of getting online, giving pop-up retailers the ability to bring a point-of-sale system with them anywhere, without having to worry about relying on someone else’s infrastructure. Expect start-ups and big retailers alike to also use pop-ups to experiment with new technologies such as augmented and virtual reality, as some malls are already doing in the US, either to market specific goods or to provide shoppers with entertainment as they browse.

Hyper-personalisation: Generation Me

Hyper-personalisation (essentially making the customer journey unique for that person) flows naturally from the data-rich environment 5G will create. People are already used to targeted ads on their Facebook timelines but hyper-personalisation will go steps beyond that, even creating tailored environments for shoppers based on their mood. In shops, facial recognition could recognise existing customers and immediately alert sales assistants. Facenote is an opt-in facial recognition technology that passes customer details and their buying habits to the retailers so they can recognise more valuable customers when they enter the store. For the moment, the applications are more for high-end retail, but they would also work with the weekly shop: imagine walking into Tesco’s and a basket is automatically prepared for you (pinged by your phone signal), with all the basic ingredients you need. While this moves into blurred realms in terms of data collection and ethics, facial recognition tech and sensors embedded on shelves can detect how well customers like what they see, then suggest similar items directly to their phone (or just measure interest). Once customers have left, personalised adverts, offers and messages can be sent as follow ups.

Augmented reality (AR) and virtual reality (VR)

Does anyone remember Google Glass? No? Well maybe the Trocadero in London’s West End - stuffed full of arcade machines like a mini-Tokyo bursting at the seams? Either way, it’s likely to be gaming and entertainment where both technologies have the biggest impact. Both AR and VR have been touted as silver bullets to retail, by letting people shop virtually, using bitcoin perhaps. And downstream, the ability to enter virtual dressing rooms or use smart mirrors to augment your look may catch on. Tech has generally been pioneered across luxury brands who boast the margins to make such investments, often driven by PR and enabled by having one or two landmark stores.

When you consider the high-volume, low-margin business model of many retailers, it’s unlikely you’ll see holographic sales staff wandering around H&M any time soon. The effect on physical retailing for most shops will therefore be modest although large shopping centre owners could be convinced if new technology galvanises shoppers. If technology can be used to swell footfall or provide centrally-resourced sales aids that help shoppers navigate all retailers, then that could be a boon to firms in a challenging market. Of course, many believe steadfastly in the value of social media influencers to the point where companies hand reality TV stars like Kim Kardashian $1m for posting endorsements on Instagram. Holographic or VR advertising could well take this to the next level. In the near term though, it’s unlikely to extend beyond entertainment pop-ups much like the ones being planned by VR start-up . It’s partnering with Unibail-Rodamco-Westfield to open 25 entertainment outlets across Europe and the States over the next three years. “People hear ‘VR’ and they think it’s a gimmick, it’s a fad, it’s not for me,” The Void Co-Founder and CFO Curtis Hickman told CNBC. “But anybody can do this. We make it easy for everybody. This is the future of entertainment.” Mashing up AR with other B2B innovations - such as inventory management - could yield potentially game-changing results for physical retail, according to Nick Brackenbury, co-founder and CEO at NearSt, a retail technology company. “The world of inventory management is insanely fragmented – there are hundreds of different systems – so we have to talk to all of them and aggregate it into something trusted by Google,” he explains. “As 5G allows more devices to maintain a constantly open data link – talking constantly to each other in real time, with no lag - that opens up all manner of interesting things.” Fast forward a few years and just imagine that AR was built into all sunglasses. “Just imagine if an app developer had access to live details in all shops and that pair of sunglasses could understand its location and context in near real time?” asks Brackenbury. “What would that mean for how you shop?” “For us,” he adds, “one of the really exciting areas is the world of offline to online attribution – how we deliver a better service to shoppers by better understanding how the actions they take online affect decisions in store. Online, we’re great at optimizing for checkouts and conversions, but doing that in the offline world is much harder. There are tech hurdles but also a growing privacy challenge.” Indeed, privacy may be the one bug in the machine, but one certainty is that the impact of 5G on retail will be driven, arguably more than anything, by consumer tech. And until standards are finalised and more network coverage exists, this won’t evolve. Given previous augmented reality products - like Glass - have been abject failures, firms may be hesitant to unveil more, similar technology. But as aids for visually-impaired people grow, the potential for meaningful, rather than invasive, uses for such technology may increase.

The single thing that people always overlook with retail is the need for human interaction. And with an ageing population, for many souls, the need to venture out locally to the shops will be more about making contact with others than worrying about keeping up with the Kardashians.

Geo-fencing

Advertising for brick-and-mortar stores can be frustrating: a part of any advert’s audience will inevitably be too far from a store to care what’s available, no matter what medium is used. Geo-fencing changes this. Using 5G bandwidth combined with GPS and RFID location monitoring, geo-fencing allows retailers to target adverts and offers to customers in hyper-specific geographies, as well as collect and curate their location data. 5G’s data capabilities have reduced the location accuracy of these processes , leading to more accurate data and more relevant prompts. At its most simple, a customer will wander near a store branch and be alerted of a special offer. More complex uses might see customers automatically rewarded for frequent visits, informed of products that are trending with their demographic, or reminded of items they’ve been close to buying online in the past. Currently, retailers can send these prompts through partnered apps, such as when clothing store The Gap sent an alert to nearby customers playing popular mobile game Words With Friends at the nearby bus station. They found that engagement with the ad increased , simply through targeting these bored shoppers. Alternatively, a retailer might use their own apps, such as when Coca-Cola Israel promoted their ‘Share a Coke with…’ campaign by having app-users’ names appear on a nearby billboard. The app swiftly became the most downloaded on the Israeli app store. With the rollout of 5G, the process might be streamlined further by removing the need for an app. Entering a shopping centre or high street may immediately begin the process of communicating information with any customer who opts in, leading to a more connected and informed customer base.

Blurring online and offline

The world will still need physical stores, but the idea is 5G will further enable the seamless interaction between instore and online sales: so making it increasingly possible to try an item instore, order it online, and have it delivered the next day. Critical is that 5G will enable a balance between the different facets of omni-channel retailing, and permit retailers to monitor and shift around their stock (which is their biggest expense) more easily. On the simple selling front, 5G will also present significant changes: - Object identification – i.e. scanning an items code and thus being able to find it anywhere on the net - will allow shoppers to find items online and compare prices far faster. - At the tills, payment technology will simplify the infrastructure needed for acquisitions. (Decathlon already uses automatic baskets that scan an item as it passes the frontier and automatically pay for items) - Wireless tills and credit card machines can enable pop up shops anywhere (even the farmers market can take cards) meaning retailers can quickly and efficiently open stores where there is demand. Imagine a clothes market but with quality retailers opening outside the Reading Festival for a week, or on the South coast during the summer holidays. - Retailers will be able to run stores just off the 5G network and secure sensitive data by creating application-specific parallel networks. - In store, wireless cameras can be cheaply installed to provide better information about foot traffic, less theft, and also better inform staff about where to go. - Meanwhile, further down the line 3D printing could permit simple items to be ordered in store and made there and then.

From a consumer perspective, 5G will help finish the revolution started by the internet and turbocharged by 4G, which means anyone can shop anytime, anywhere on practically any device. The physical act of shopping within a store will be less about the actual purchase of goods. This could range from real time personalised experiences and adverts – through the use of big data and purchasing history – to providing augmented reality to improve the customer journey. Critical will be ensuring the use of data and personalisation genuinely makes customers’ lives easier, as well as enriching the shopping experience. This is where previous technologies have failed.

Avametric technology enables brands to deliver accurate 3D renderings of their apparel and accessories on customisable digital models for web, mobile and augmented reality. The company is dedicated to tackling an issue plaguing the fashion and apparel industry: How do you convert more online shoppers into buyers? The company’s 3D visualisation tools allow shoppers to step into a booth - about the same size of a standard fitting room - where their measurements are scanned into 200 data points in just three seconds. With this information, Avametric’s technology allows shoppers to visit a retailer’s online store which then syncs with the company’s database to find clothes that match a shoppers style and fit. In 2016, Avametric raised $10.5m in a funding round led by Khosla Ventures which allowed the firm to bring its product to the market. With the help of 5G, Avamaetric will be able to streamline its customers experience even further to make it more accurate and fast. This will also result in customers returning less products. Moesif is a product intelligence technology that provides analytics to give companies a deeper insight into how their customers use their platforms. Today, many companies provide developers access to their servers via application programming interfaces (APIs) - which in layman terms is a communications protocol between a client and a server intended to simplify the building of client-side software. The San Francisco start-up wants to help its clients gain insight into their customer’s API usage patterns. The company is aiming at two primary types of users. First of all, there are developers who can use the monitoring features to understand when there are issues with the API. The start-up also targets business units like product management, sales and marketing, which use the tool to understand who’s using the API and understand who is likely to stop using the product based on how they are using it. Moesift recently raised $3.5m in a seed funding round led by Merus Capital. Moesif utilises cellular technology, as customers use data to access retail companies’ apps and products. With the rollout of 5G, the software’s analysis will happen even faster, allowing companies to see data analytics in real time and adjust their APIs faster in line with feedback. Australian-based Hivery is dedicated to solving problems in the retail and fast-moving consumer goods sector using artificial intelligence that allows customers to generate precise return on investment. In 2014, Hivery conducted an experiment with a fleet of 60 vending machines to test the ability of machine learning to optimise sales by recommending changes to the product assortment and spaces-to-sales ratio of available products. Hivery is able to work with companies to design solutions that better leverage their data and generate a return on their retail investment space by implementing AI-generated recommendations on product assortment, price, space and promotion. Hivery uses the 4G networks to connect retailer’s analysed data to mobile devices and computers to see the optimal arrangement of their physical stores in real time. This artificial intelligence and augmented reality has applications in the retail sector by optimising retail strategies to maximise the profits of brick and mortar shops. With 5G, the visual prediction will happen even faster, with more up-to-date analysis of customer data analytics. San Francisco-based Zippin is a checkout free technology platform where artificial intelligence technology with cameras and sensors accurately identify who bought what as shoppers walk around a store shopping naturally. Recently, the company partnered with Golden 1 Center in Sacramento, California, to open the world’s first in-arena checkout-free convenience store. Using the award-winning dual mode Sacramento Kings + Golden 1 Center app and/or the Zippin app, guests can visit the store, grab items off the shelves, and exit without waiting anywhere or scanning any items. The receipt is then produced in the app. Zippin’s technology also provides real-time inventory tracking, allowing stores to restock at just the right intervals and maximise sales conversions. As Zippin keeps accurate count of all the products on every shelf in the store, shoppers are able to use the app to browse what is available in the store from anywhere. The technology platform uses cellular technology to connect data taken from the cameras and shelf sensors to send information to the customer's mobile phones, so customers automatically pay. 5G will help Zippin shake up the retail market even further, as in-store shopping will adapt to remove checkout lines entirely, and change retail jobs. Instead of people working as cashiers, employees can provide further customer experience by helping shoppers find the products they are looking for. Xpllore is a Manchester-based startup working with augmented and virtual reality aimed at building an enterprise version of the game-streaming platform Steam which allows mixed reality developers to sell the experiences they have created. Unlike Steam however, the company aims to roll out virtual reality within the education sphere. The rollout of 5G will encourage the creation of more virtual reality content and enable better user experience. 5G will provide the company with the necessary bandwidth to stream their virtual reality apps via cloud servers to their headsets with very little latency. Without it, the user wouldn’t have the real-life experience the company is aiming for, and would instead experience delays and poor quality visuals which can cause nausea and disorientation.