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5 ways 5G will impact retail

Last month, mobile phone network Three ‘switched on’ its 5G service in London through an immersive experience with fashion designer Henry Holland.   

The “Living Room of the Future” initiative saw visitors able to try on mixed reality headsets from Magic Leap, to enter into a world consisting of everything from a mindfulness moment, to a gaming experience and the delivery of (virtual) House of Holland shoes by drone to your door. 

5G is expected to ramp up in 2020 on a global level. Further cities in Switzerland, Spain, Germany and Italy have already begun adopting it. Meanwhile, in the US, although four cities have turned on the signal, the technology is tied up in a trade war, since China’s Huawei is the dominant 5G supplier. Regardless, the latest Ericsson Mobility Report predicts there will be more than 10 million 5G subscriptions globally by the end of this year, and that 5G population coverage is forecast to reach 45% by 2024.

In it simplest sense, 5G is just a faster version of 4G – about 20x the speed in fact. That coupled with almost no latency, means the new networks will nearly eliminate lag time. This is big news for mobile of course – opening up paths to purchase in even the busiest of crowds for everyday shoppers. 

But its existence will also help power other tech advances, from machine learning to digital realities. Add in features like low energy consumption and higher reliability, and it brings an opportunity for the retail industry to enhance the consumer experience in the physical store with a number of seamless real-time functionalities, leading to increased engagement and conversions. 

As a result, now is the ideal time for retailers to start planning how their stores and interfaces will look when 5G becomes widely available. Here are 5 ways we see it having an impact… 

Connected Spaces

Connectivity in our physical stores, means devices that can constantly exchange data with each other – also known as those under the header of the Internet of Things (IoT). To do so, they need a fast, reliable network that doesn’t require too much power. 5G networks will achieve a 90% reduction in power consumption, guaranteeing up to 10 years of battery life for low power IoT devices. This means, for example, that more retailers will have access to smart shelves like the ones Amazon implemented in its Amazon Go stores. This technology uses dozens of sensors to provide real-time inventory visibility and update pricing according to demand. 

Key tech we’re tracking: dynamic pricing, automated checkouts, connected fitting rooms, automatic replenishment

Amazon Go Store
Immersive Experiences

Augmented and virtual realities use a lot of processing power and cellular data. With the increased capacity of 5G networks, retailers will be able to create richer, more detailed experiences when integrating their physical and digital worlds. This will make technologies that we’re already experimenting with, and seeing consumer adoption of, only more of a possibility. The result will mean shoppers are able to immediately check product materials or ingredients through the use of smart glasses or their smartphones, for instance. Those same apps will also guide customers to the products they want by projecting directions into their field of view in real-time as they navigate the store space.

Key tech we’re tracking: immersive interfaces, gamification, wayfinding

Puma’s new flagship store with gamification
Higher Efficiencies

Artificial intelligence will also thrive on IoT devices via 5G. That’s not to say the AI algorithms themselves will change, but that the higher network will enable more accurate real-time data to flow, ultimately facilitating smarter systems. In retail, for instance, managers will be able to delegate more operational and inventory decisions to automation. This means greater efficiencies as well as accuracies on things like forecasting inventory quantities so as to optimize stock levels, leaving sales associates to spend more time on customer care. Having stock in the right place at the right time will also decrease the risk of losing customers to competitors, as product availability will be more accurate. 

Key tech we’re tracking: retail analytics, inventory visibility, demand forecasting, endless aisle  

Walmart’s endless aisle
Personalization

With lower latency, retailers will also be able to respond to purchasing patterns and behaviors with immersive, tailored content in real-time. Implementing 5G in-store will allow for greater interactions and data collections between sales associates and customers. Real time data could be tracked to create personalized adverts or offers based on the preferences of individual customers, helping to increase the incentive to buy. 

Key tech we’re tracking: marketing automation, personalized promotions, AI recommendations, product search tools, clienteling

Nike’s Melrose store
Fulfilment

The implementation of 5G will also revolutionize logistics by improving  efficiency in fulfilment tasks and increasing the speed of transportation. Greater connectivity and improved reliability will help communications between brands, couriers and consumers. The full capacity of 5G will eventually also enable the roll out of automation in transport and warehouses, thanks to improved processing of the vast amounts of data required in real-time. 

Key tech we’re tracking: smart warehousing, robotics, automated vehicles

Lowebot assisting a consumer

Additional reporting by Larissa Gomes.

How are you thinking about retail innovation? The Current Global is a transformation consultancy driving growth within fashion, luxury and retail. Our mission is to solve challenges and facilitate change. We are thinkers and builders delivering innovative solutions and experiences. Get in touch to learn more.

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Comment e-commerce Editor's pick technology

Comment counts: How AI is making online fashion truly personal

Artificial intelligence promises benefits for both retailers and their customers, from personalised discovery to the surfacing of entire catalogues, writes Andy Narayanan of Sentient Technologies.

Sentient Technologies artificial intelligence
Sentient Technologies

What’s the biggest difference between shopping online and shopping at a store? Online gives you the convenience of shopping in your robe, getting products shipped directly to your house, browsing an endless aisle of choice after choice, the ability to price check tons of retailers on the same dress, and a whole lot more. In a whole host of ways, shopping online is just, well, better. But there’s one thing that e-commerce sites have struggled with for years: the personal touch.

For many of us, when we head into our favourite stores, one of the best parts is interacting with a great salesperson. And what exactly makes a great salesperson? They get us. A great salesperson listens and understands what you want. They know which brands run a little small. They can intuit what your style is based on how you’re dressed and the clothes you’re trying on. They can head to the back to find you something they know you’ll love.

This, as we mentioned, is notably missing online. Instead of great salespeople, we have a search bar and little checkboxes to click to browse the aisles. We’re left browsing that so-called endless aisle in hopes of finding something we like. In essence, we’re trading the personal touch for convenience.

But new advances in artificial intelligence (AI) are changing all that. They bring far more personalisation than what you see at your typical fashion retailer and promise massive benefits for both retailers and their customers. Which, of course, is exactly how it should be.

So let’s get back to that online shopping experience for a second. You know the one I’m talking about. After all, most sites, when you get right down to it, have very similar interfaces. You’ve got a search bar, some facets to help narrow your search (those checkboxes on the left with options for brand, colour, size, price, etc.), and a grid of product images. If you don’t like what you see, you can click through the page numbers on the bottom or click into a product detail page to find more. And really, that’s most of what shopping online actually is.

But with AI, it’s different. Because AI can understand the product images themselves, it allows for a whole different kind of shopping.

A smart AI – like the one my company Sentient makes – looks at an image in hundreds of vectors. That means it can identify things that are tough to describe, like the placement of a logo, a certain kind of fringe, the height of a heel in relation to the rest of shoe, etc. But that’s not what really makes the AI feel personal to users. What does is how the AI reacts to their behaviour as they shop, in the moment.

So say a user starts with a normal search for a red dress. Each time she clicks on a dress to check the price or look at the product detail page, she’s sending the AI a signal. And the signal is simply that she’s interested in the product. What makes things personal is that the AI actively figures the similarities between the products the shopper is looking at. Is it a particular shade of red? The length of the dress? The scoop of the neckline? And as it’s learning what she wants, the AI can start suggesting dresses that fit her browsing patterns, not based on retailer metadata or purchases she’s made before, but from just the couple of clicks she’s made in the past few minutes.

That means, effectively, that an AI can figure out preference and style for that user. It knows what she’s looking for in a red dress, not just that she’s interested in a broad category of red dresses. In other words, it finds the red dress, not just an endless aisle of red dresses.

For retailers, implementing something like this is actually quite easy. It sits on the front-end of a site (no backend integration is necessary) and the AI can be specifically trained to their catalogue. All it needs, for example, is product images. After that, you can use the AI in your existing user flows, product detail pages, recommendation pages, you name it. It’s really up to retailers as to how they want to leverage it.

And the benefits are tangible. AI can help with important metrics like average order value, add to cart, and more, but one of the more interesting proof points is that AI helps expose the entirety of a retailer’s catalogue. That’s because, instead of using old recommendation systems (stuff like “users like you bought this”) or giving primacy to items that are already popular, an AI can look at the images themselves and recommend products that a user may never have found, because it was buried on page 40 or was from a brand they didn’t recognise or because the manufacturer didn’t give a retailer the right metadata.

In fact, our first customer surfaced a full 92% of their products in the first month they implemented. Which backs up a key thing we should underline here: AI really does know your entire catalogue. And as it learns, it helps a shopper find just what they want.

Other folks are taking different approaches to personalisation, of course. Chatbots are having their moment. Sites like The North Face have implemented a sort of Q&A flow that uses real AI to suggest products. A while back, Victoria’s Secret used a non-AI powered questionnaire to help users find the sizes and styles they liked. But what excites me more, is personalisation that adapts and reacts to buyer behaviour in the moment. One that learns style, intent, and preference as users browse. One that gives a shopper access to a retailer’s entire inventory.

AI learns, adapts, and gets the customer. It figures out what they like even when they might have trouble articulating it themselves. AI understands intent and style so that shoppers can stop scrolling through page after page of red dresses and instead, in just a few clicks, find the perfect red dress, just like a great salesperson would do. That means getting the key benefit of brick-and-mortar shopping without having to leave the couch. And that’s the sort of thing that wins you customers for life.

Andy Narayanan is the VP of Intelligent Commerce Sentient Technologiesthe world’s highest-funded AI company, having raised over $140M. Its platform and technology has been in development for over nine years. Comment Counts is a series of opinion pieces from experts within the industry. Do you have something to say? Get in touch via info@fashionandmash.com.