Guest contribution • 11.11.2019

How to reinvigorate Germany's high street

Brick and mortar retail should focus on technology, especially Wi-Fi

Man in suit with blue tie and glasses smiles diagonally into the camera...
Christopher Mendoza, Senior Director Sales Acceleration, CommScope
Source: CommScope

It is not easy for the brick and mortar retail to assert itself in the course of the digital transformation and the competition from the online trade. Retail stores can upgrade with technology to stay competitive. An important factor that has been neglected so far: WLAN.

Europe’s retail market has faced falling footfall, given easy accessible eCommerce. With Europe’s share of the Top 250 global retailer’s revenues dropping from 39.4% to 33.8% over a ten-year period according to Deloitte, many major retailers have chosen to close some or all of their physical stores. In many places in Germany, attempts were initially made to counteract this trend by opening more stores, but this strategy did not resolve issue. Branches were closed again, subsidiaries were sold as in the case of real, or special-purpose alliances were formed, as in the case of Karstadt and Kaufhof.

However, hope isn’t lost for the physical store as some might predict. In fact, it could be quite the opposite – the physical store could play a key role in the retail strategy of the future. As consumers want an ever more connected shopping environment, one which combines the physical and the digital into a seamless experience. This ‘bricks and clicks’ model, pioneered in the early stages of online retail, has benefits for companies and customers, and we only expect it to continue and increase.

Woman with shopping basket in grocery store, holding her smartphone in her hand...
Wi-Fi can boost brick and mortar retail.
Source: PantherMedia / Lev Dolgachov

Technological innovations to make the business fit for the future

According to analyses by the EHI Retail Institute, the IT budgets of retail companies in Germany, Austria and Switzerland have been rising continuously for years. The budget is mainly used for technological innovations that are intended to make the business fit for the future. Artificial intelligence is currently regarded as the most important innovation. 

But it’s crucial that they are making the right technology decisions to meet the needs of the local market. German consumers, would like real-time information about the availability of products in stores, electronic price tags, self-service payment apps and last but not least free Wi-Fi access.

Wi-Fi is fast emerging as the technology of choice for the industry, especially with the advent of WiFi6. This new Wi-Fi standard will deliver faster network performance and connect more devices simultaneously, perfect for high-capacity retail use cases. The network becomes critical to businesses as a reliable and robust foundation to build upon with applications and services.

As retailers also look to bring in new marketing methods to drive in-store engagement, a manageable and RF-agnostic network has a lot to offer. For example, delivering promotions directly to devices when they log on to a network, be that utilising Bluetooth or Wi-Fi, or being able to track footfall to better plan store layouts. 

However, retailers need to ensure they are making the benefits to consumers clear. According to the Ruckus survey, the willingness of German consumers to exchange personal data for a connected store experience is currently low. Only 13 percent of respondents said they would be willing to exchange data for free Wi-Fi access in stores.

Setting a good example: Mediengruppe Nordkurier in Neubrandenburg

The city of Neubrandenburg in Mecklenburg-Western Pomerania is one example of how free Wi-Fi can be used to strengthen the regional economy. There, the Mediengruppe Nordkurier, one of the largest media companies in the region, has developed a creative concept to equip the entire city centre with free Wi-Fi. In addition, an app was developed, the Lokalfuchs-App, which informs residents and visitors about current offers and advertising campaigns by local retailers and restaurants. In this way, customers receive all relevant information in real time on their smartphone and higher traffic is generated. Such a link between digital offers and the retail shop optimizes the customer experience and adapts the stationary retail trade to the digital age.

The choice of technical foundation that retailers make today will impact store performance in 10 years’ time. it is essential that they make the right decision.

Author: Christopher Mendoza, CommScope

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