Beauty Store Business magazine - December, 2019

Will 5G Transform Beauty Retailing?

The 5th generation of wireless technology is poised to dramatically change life and commerce as we know them.

You may not realize it yet, but 5G will fuel tomorrow’s innovations. It’s expected to revolutionize beauty, retailing and every other industry, along with everyday experiences. This next iteration in wireless technology will seamlessly merge our digital and physical worlds, making us far more informed and our lives far more convenient than ever before. It will make commerce more immersive, interactive, intuitive, personalized and expeditious. Plus, it will enhance our understanding of ourselves and streamline our connections to others. Our friends and loved ones will shop with us remotely while diagnostic applications let us know what we should be shopping for.

5G, which is the fifth generation of wireless technology, succeeds 4G, 3G and so on down the line. In summation: 1G gave us mobile phones; 2G allowed us to enjoy messaging; 3G offered greater speed, along with video capability; and 4G made augmented capacity a reality, providing as much as 10 times greater speed. Verizon Wireless says its Ultra Wideband 5G Network will provide up to 100 times better throughput, 10 times the battery life and 1,000 times larger data volume–and will be 10 times more reliable. Data transfer rates are expected to happen many times faster than a blink of an eye, potentially reducing latency to 1 millisecond or less, the company says.

“We are working with retailers all over the world to reimagine the in-store experience through virtual on-site activations.”

-Alice Chang, CEO, Perfect Corp.

Nick Kramer, vice president of digital and analytics for SSA & Co., a business-solutions firm that delivers advanced operating models, says, “5G is fundamentally game-changing” to drive growth, boost profits and build capability. “First, it’s about speed. It’s like streaming Game of Thrones after spending a week barely able to load Google on the Caribbean hotel Wi-Fi. This means faster time from purchase decision to transaction. Second, it’s about content quality. It’s like going from standard definition to 4K video. Augmented and virtual reality become a reality. Third, it’s about content and community. Your customer can watch a how-to video, FaceTime with friends, read what influencers are saying on Instagram, set their thermostat and purchase product simultaneously, anytime, anywhere.”

Lucie Greene

It’s going to enable nearly everything we interact with to become a connected device, according to Lucie Greene (shown above), worldwide director of The Innovation Group at J. Walter Thompson Worldwide, a global marketing firm specializing in research, innovation and data analytics, and the author of Silicon States. “In terms of retail, it will make the world a shopping interface. The connected mirror, the fridge, the car, everything [becomes] pretty much a potential portal, if not for directly shop- ping and consuming entertainment, then for generating data points. Every aspect of human experience will become smart or a data point,” Greene explains.

Alice Chang

New 5G technology will aid beauty retailers in giving their customers personalized, individualized products, experiences and offerings. It will enhance retailers’ ability to anticipate customer needs, deliver on their desires and elevate their shopping experiences. It will “usher in the era of immersive beauty experiences,” through the integration of artificial intelligence (AI), augmented reality (AR) and live streaming, and will increase customer interaction with products, leading to “more organic purchases and less buyer’s remorse,” says Alice Chang (shown above), CEO of Perfect Corp., a leading AR service provider and beauty-app developer, including the popular YouCam apps.

The defining characteristics of 5G, such as unprecedented speed, bandwidth and low latency, are expected to enhance retailer-to-customer engagement, customer-to-product engagement, retailer-to-product engagement and so much more through real-time data, AI, AR, virtual reality (VR), robotics and more. Here are just of a few of the ways it will impact beauty retailing.

Customer Data
5G will support biometrics in allowing retailers to employ real-time ability to anticipate customers’ shopping behaviors, intuit individualized add-ons and so forth. “You can know who the person is when they approach a specific promotion or merchandising display; and have a much bigger picture of [his or her] previous shopping history and tastes–and be able to respond with contextual offers,” Greene explains.

Inventory Empowerment
5G technology will enhance retailers’ ability to track and manage inventory in real time, including shipments and remote and automatic replenishment, as well as better manage pricing issues and other errors. “5G will allow more sensors, robots, vehicles and warehouses to be online and communicate in real time,” Kramer says. “Endless aisles will become a reality with unified inventory. Optimized warehousing based on demand prediction will become enhanced with the ability to do real-time tracking through the value chain and real-time route optimization to shorten delivery cycles and reduce friction.”

Real-Time, Remote Customer Engagement and Influence
Imagine sending personalized promotions to customers that cause them to break from their errand-runs and make a beeline to your store. Greene says that’s the future of retailing. “You’ll know where people are in more granular detail and be able to respond with constantly updated, localized and contextual recommendations. So, your customer can be in a car or moving around the city, and your beauty store will know when they’re near and be able to send them specific offers or updates intuitively,” she explains.

New Opportunities
Connected devices that allow users to give voice commands to secure information or assistance have taken off in recent years. And Greene believes home hub-type devices, in particular, have great potential in-store. “Clever brands are using that position in the home [for more than driving] customers into stores,” says Greene. “[For instance], it’s being used in hotel rooms for concierge-type services. It’s a real opportunity for stores to create agile service. If you’re a sales assistant and unable to help somebody, the hub is a really creative way to add new skills or services in-store.”

Greene says that we should expect to see everything from visual recognition being used more intuitively to the face becoming a financial ID or photo recognition being used to search for related items, and sensors being embedded into everything. “The expectations of personalization are [getting] higher. Let’s not forget that people were concerned about biometric data, and now people are using their face and their thumbprints as ID to get into phones. The convenience is the seductive carrot there. And once you get used to the convenience it becomes easier to let go of privacy fears. [Subsequently], brands are going to have to determine when it’s helpful for creating new customer relationships and when it’s just creepy.”

Experts see the in-store experience being transformed in a number of different ways.

Bye-Bye Messy, Cluttered Store Environments: "We are working with retailers all over the world to reimagine the in-store experience through virtual on-site activations,” Chang says. “These integrated digitalized experiences address consumer frustrations with traditional messy and unhygienic testers.” She explains that AR and AI technologies will optimize in-store experiences, in part, as shoppers rely on virtual experiences for trying on product.

Hello, Responsive Store Environments: Greene emphasizes that the stores of the future won’t require computer screens, but- tons and the technological characteristics we engage with today because high-speed internet will enable anything to become a connected interface. “We’re starting to see the way technology looks in environments that shift to something more thoughtful and ambient. We can talk to machines, we can voice activate things–and all incredibly fast. So, in terms of a beauty store, you won’t need counters. You won’t need the traditional interfaces because the whole environment will be connected and responsive to you,” she explains.

Customer Service Will Get Even More Personal: A variety of technologies, including gesture recognition and voice-enabled devices, will support both salespeople and customers with individualized customer support. Subsequently, they’ll also influence and embolden purchase decisions. “The capability that 5G offers continues to make AR and AI innovation a pivotal piece of the consumer shopping journey, [and consumers] will rely heavily on virtual experiences when making purchase decisions,” Chang explains.

Shopping Will Become Markedly Communal: 5G will enhance the collective beauty experience. “Influencers will still be important, with an increased emphasis on live-streaming. But the increased bandwidth of 5G will also make micro communities–the customer’s friends and family–an increasing part of the experience through one-on-one and group video chats. This will create the intimacy of shopping together without needing to be together physically,” Kramer explains.

Store Environments Will Facilitate Shared Experience: The store environment will eventually accommodate customers’ digital interactions with friends and family. “Store design will be challenged to give people the space to integrate their community into the in-store experience without intruding on one another,” says Kramer. “One can imagine booths that [more privately allow people to] get advice from friends, live-stream a how-to and use AR to [explore a new look]. How will a store look? How will the space be used now that you can combine physical and virtual spaces? I think we’ll have a hard time recognizing the in-store experience five years from now.”

The reality is that these advancements will be the new norm in shopping and retailing. As such, consumers will expect the conveniences and personalization they offer–they will determine how and where beauty consumers shop.

Nevertheless, retailers with smaller budgets shouldn’t worry about the current costs and other barriers to mass employment of digitalized experiences. As Kramer puts it, with proliferation comes democratization. “[Companies at the forefront of tech innovation] will face competitors who take advantage of the critical mass and reduced development complexity created by ubiquitous high-speed access,” he says. And Greene adds: “With every iteration of technology, the barriers of cost come down. So, it [won’t] require the same investment as it may have in years past to keep the pace.”

For now, smaller retailers can position themselves competitively by investing in app development, including AR and engagement, says Kramer. He foresees customers spending more time on their own devices in-store, thanks to 5G. And this creates an opportunity for stores to stay connected to customers wherever they are. “5G will only accelerate what’s already happening: Customers want to interact with physical products and their own devices. The key will be to integrate the customer’s device into the shopping experience,” he explains. “Creating personalized, immersive experiences can no longer be separated from the customer’s device, even in the store.”