A survey from Ericsson is warning that problems with retail networks and connectivity in general are posing a danger to ongoing profitability.
In its Sector in focus: Connecting retail report, Ericsson commissioned Censuswide to survey as many as 500 technology decision-makers at medium and large retail businesses with over 250 employees in the UK.
The study looked to explore the challenges retailers currently face and how connectivity services can help address them. However, worryingly, it found that 48% of retailers cited networking and IT as the biggest frustration, ahead of budget (40%) and staffing issues (32%) when launching new technology-based services in stores.
Perhaps worse, 52% of technology decision-makers at retailers believe technology issues are their biggest blockers to creating resilient retail branch networks. Some 70% identified fixed broadband as a blocker to creating a standardised in-store service, likely due to the physical fragility of fibre cables leading to network outages or lack of fibre in some areas of the UK, said Ericsson. It added that the need for specialist equipment to install cables can make it complex to upgrade connectivity as requirements evolve.
As a result of these issues, over a third (37%) of large retailers said they had been forced to offer scaled-down services at more remote locations, and nearly two-fifths (39%) notice varying levels of customer experience, leading to 38% experiencing a loss of revenue at remote branch locations because of poor connectivity.
Yet despite these sentiments, the survey also discovered that retailers were relying on connectivity to enhance customer experience security. As regards the former, 72% of the survey offered in-store Wi-Fi and 57% used it for personalised marketing. Additionally, 60% have adopted the internet of things (IoT) for digital signage for real-time offers, and over half (55%) have used AI and machine learning to support dynamic pricing.
As an example of this, Ericsson noted that in a deployment of its technology, operator T-Mobile needed 100% uptime at its 5,000-plus stores to support digital signs and payment systems. However, adding more wires to thousands of stores was not cost effective, so it turned to its own cellular broadband network and Ericsson Cradlepoint cellular adaptors to provide failover support, keeping critical application and IoT devices online 24/7.
Despite stores in the UK investing £1.8bn in security measures such as CCTV in 2024, customer theft still hit £2.2bn, nearly three times the level of 2020. The survey found that in the UK, only half (50%) of retailers have invested in enhanced asset management or inventory control tools, and just 54% have adopted IoT tools to support asset tagging and tracking. If companies are to increase their deployment of these measures, and ensure their effectiveness, they must have the right connectivity infrastructure in place to allow real-time data sharing.
Looking to the future, Ericsson said retailers must focus on the future to stay competitive, resilient and adaptable in an evolving market. It stressed that AI adoption was rising, with 49% of retailers already using AI chatbots, which can help reduce the workload on human workers and allow them to focus on higher-value tasks. Likewise, 39% were deploying AI to inform dynamic pricing, which can help boost revenues, and 29% were currently testing additional use cases across the business.
The bottom line conclusion drawn by Ericsson was that to effectively support retailers, next-generation technology requires a reliable, robust and secure network. “Retailers are operating under vast amounts of pressure as they face higher tax bills, reduced customer spending and rising safety issues,” said Paul McHugh, UK area director at Ericsson Enterprise Wireless Solutions. “While many see the use of technology like AI and IoT as a way of overcoming these challenges, it is clear that out-of-date connectivity infrastructure is leaving them hamstrung.
“Wired connectivity, like fibre, does not provide the necessary flexibility or resilience needed to support a universal customer experience across all store locations,” he added.
“Cellular networks are the answer. They can supply secure and reliable connectivity from day one with the necessary bandwidth and low latency to support new in-store technology. Good connectivity is no longer optional – it’s essential to stay alive and ensure success in a technological-first world.”
