The transformation of retail, and shifting to the ‘low touch’ economy powered by 5G

By Jason Elliott, Head of Portfolio solutions, partners and ecosystem marketing, Nokia

Jason Elliott, Head of Portfolio solutions, partners and ecosystem marketing, Nokia
Jason Elliott, Head of Portfolio solutions, partners and ecosystem marketing, Nokia

I’ve had many discussions about how businesses need to stay on top of 5G. While this applies to all businesses, retail should be one of the fastest to adopt and become the most enriched by the wealth of innovation that 5G will unleash. In today’s complex world, we see transformation and adoption of new business models accelerate as the access to and capability of connectivity increases.

Given the ramifications of COVID-19, a rapid shifting in consumer attitudes and behaviors has occurred, with many businesses are having to pivot and adjust their operations. We are observing the start of the ‘low touch’ economy. This can be defined loosely as being forced to adapt to strict policies due to health restrictions, such as limited gatherings, travel restrictions along with ‘low-touch’ interactions that is creating a permanent industry shift.

Technology is a great enabler towards overcoming these physical restrictions and reliable, high performing connectivity has been a major part of this. While previous generations of cellular connectivity have focused on consumers, the capabilities of 5G are designed from the outset to support the demanding levels or performance, reliability and scalability that businesses need all running on one global standard. It provides even more security and the ability to support a wider range of device types from ultra-low powered sensors to highly complex smart video AR/VR units. There are alternative deployment models too, with hybrid approaches allowing companies to have private cellular systems on their premises and other mechanisms such as network slicing that provide greater control over the different levels of service they can subscribe to.

There are many facets of the retail industry to consider, from the supply chain and production to distribution, purchase and aftercare. There are different categories of the products we buy. ‘Convenience’ products such groceries, ‘shopping’ products like clothing ‘Specialty’ products such as jewelry, and cars and then finally ‘unsought’ products like some types of exercise equipment, concerts and events.

Each of these categories could have some different form of production, distribution, promotion, and purchase method. In each of these areas, technology has made many positive changes across the retail industry and spurred new business models, so what can we expect with the advent of 5G?

1. Supply chain and production

Making the supply chain faster and more predictable, not only reduces cost but is key to offering consumers a differentiated service, allowing for highly customized products at the lowest possible cost point.

Massive machine type communication provides asset tracking of raw materials, partial and completed goods down to millimeter level precision using highly accurate indoor positioning to optimize inventory against production volumes.

Ultra-reliable low latency communications with edge computing enables smart factories where only the floors and walls are fixed. Robotic systems work alongside humans on repetitive and mundane tasks. People and robots will have the ability to be moved into different locations on the production line and re-tasked to accommodate varying demands in terms of product types and volume.

Using video analytics to perform quality control during the production process and provide monitoring of perimeter and zone security of facilities. Augmented reality for operational and maintenance personnel provides instant updates on the operating condition of all systems as they walk through the factory. Virtual and augmented reality devices will deliver the ability to provide guidance on repairs to minimize downtime.

2. Distribution and logistics

Using ultra-low-latency and high reliability 5G networks will enable truck platooning and potentially semi and fully autonomous vehicles. Advanced wireless communication with road infrastructure could reduce delivery times for raw materials, improve last mile delivery options, and use automated ground and aerial based vehicles to reach consumers 24/7.

3. Purchase and post-sales care

Enhanced bandwidth and low latency provide more opportunity to deliver interactive and immersive advertising. By moving from 2D to 3D experiences, customers can ‘try on’ clothes in virtual dressing rooms using volumetric video. In-store experiences using augmented reality to enhance the physical store experience and provide more detail on products and automating in-store back office processes such as inventory management, frees up more time for sales associates to help customers.

Higher-end specialty products and large electrical appliances can be connected to the cloud creating a ‘digital twin’ allowing customer service agents to see and resolve specific usage issues and assist customers in using the product.

Where does Wi-Fi fit into all of this, especially with the advent of Wi-Fi 6? Well certainly Wi-Fi is applicable for general I.T needs in what we call carpeted locations, but beyond this 5G provides the mobility, reliability and security needed to address the more operational technology needs of industry.

You may think that 5G is way off, but Nokia has already deployed 34 5G networks worldwide and has signed 100 commercial contracts. There are around 112 different types of 5G devices that have been launched ranging from smartphones and tablets, to customer premise equipment, laptops, hotspots and modules.

5G will provide a massive opportunity in terms of unlocking new business potential. With Gen Z entering the consumer market, the rise of these true digital natives will further spur the low-touch approach all of us have been only just been forced to adopt. Service providers, network vendors and businesses are working closer together to ensure future success for everyone, and the retail industry will continue its digital transformation, where 5G will undoubtedly play a key role.