A new research report from Extreme Networks reveals that retailers are urgently working to upgrade the Wi-Fi capabilities in their stores in order to keep pace with changing consumer behaviors and expectations. However, IT teams at many retailers have significant work to do to get their in-store networks up to par.
The report, titled “The World is Connected: The Store Must Be Too,” was conducted by Retail Systems Research (RSR) and includes responses from 114 major retailers globally on the role Wi-Fi capabilities plays in their customer experience and operations. It identified several key trends that show the vital and growing importance of robust wireless connectivity in brick-and-mortar retail stores.
Among the top findings:
- 92% of retailers want to use more consumer mobile devices for store operations like inventory management and pricing.
- 75% of retailers say their networks must be able to add bandwidth and access points quickly to keep pace with business needs.
- Only 32% describe their current network as “state of the art.” while 57% rated it as “good enough”
The report looks at the usage of Wi-Fi for both in-store operations as well as for customer experience. Retailers were asked about how customer-facing Wi-Fi impacts customer experiences, as well as how the store network is being used for operations like virtual warehousing, loss prevention, electronic shelf labeling, digital displays, temperature monitoring, and inventory management.
Norman Rice, COO at Extreme Networks told SDxCentral that one of the biggest surprises was how visible the contrast was between the “Winners” group, defined by above average Year-over-year sales growth, with industry average comparable store/channel sales growth of 7%, and the collective respondents.
“It became very clear that those leaning into their network as a strategic asset were benefiting monetarily as well,” Rice said.
For example, when looking at Wi-Fi improving various in-store experiences, only 26% of retailers with average or lagging sales said that Wi-Fi had improved customer order fulfillment and returns handling. In the Winners group, that number jumps to 63%.
Taking something less common, like location and behavior tracking: 70% of respondents in the Winners group say being able to track that data is important, compared to only 43% of all others.
“That’s telling us a clear story – retailers with stronger sales patterns see technology differently, and they’re leaning into it more in order to drive success,” he said.
When ‘good enough’ Wi-Fi isn't really good enoughThe majority of respondents to the survey (57%) reported that their existing Wi-Fi deployments were - good enough.
Rice said that “good enough” means, in short, that the Wi-Fi works when you need it. He explained that a customer can probably still use a smartphone to look up whether a product is in stock, and a store employee can probably rely on the Wi-Fi to be able to connect and update electronic shelf labels.
“But as a retailer, you’re probably also missing out on a lot of other functionality,” Rice said. “Not just better connectivity and more bandwidth that can be used to support things like self-serve kiosks, but also on Wi-Fi analytics that can be used to see what foot traffic patterns usually look like or where in the store customers usually spend the most time.”
Why faster, newer Wi-Fi standards matter
In Rice's view, adoption of the newest Wi-Fi standards is incredibly important for retailers to get the best experience.
“If you’re still running a Wi-Fi 5 network, that’s like using an iPhone 7 – it’ll still work for the most part, but you’re not going to have the same experience or features,” Rice said.
For basic customer in-store usage for things like looking up products or doing a quick price comparison, the latest Wi-Fi standards might not make the biggest difference. Store operations are another story.
According to Rice, the additional bandwidth and security available with Wi-Fi 6, 6E and soon Wi-Fi 7 is what enables retailers to support more in-store technology like asset management and tracking, in-aisle digital displays, temperature monitoring to prevent food or drug spoilage, customer self-scanning, and other functions that require stronger connectivity.
Seventy-five percent of respondents to the survey reported that adding bandwidth and access points at the speed of business is one of their biggest challenges. That's an issue that Rice said is rarely a problem with Wi-Fi 6/6E.
How to overcome Wi-Fi challenges and improve retail networksThe top 3 inhibitors to moving forward with network improvements that respondents identified were: not having a specific business case to support network improvements, that the technology changes too often, and that they don’t have the skills to manage the size/scale of such a project or they have too many other priorities.
In terms of helping to make the right business case to retailers, Rice noted that Extreme Networks works with large retailers who continue to make the business case by proving out how the right network can help augment multiple aspects of operation. The business case for Wi-Fi improvement including enhanced automation, AI and analytics that help drive more streamlined operations, lower overhead costs, the ability to create more engaging and personalized experiences for consumers to create more revenue opportunities.
While network software changes fairly quickly, Rice said that once an organization invests in flexible next-generation hardware, it’s likely it won’t need to upgrade again for quite a while. For example, Rice said that new generations of 6 GHz Wi-Fi (Wi-Fi 6E and 7) are now emerging, and clients are beginning to come online. Those access points can remain in place and support new use cases over the next few years.
“When it comes to skills and priorities, this isn’t a surprise,” Rice said. “ More and more of our customers, and not just those in retail, are indicating that they don’t want to manage their network themselves.”
That's where cloud management platforms come into play, helping to reduce complexity by making it easy to manage an entire network across stores and geographies in one place.
“This survey showed us that there is a real connection between savvy network investments and financial success,” Rice said. “The fact is, consumers are pushing for new experiences and it will be a requirement for retailers to keep up to stay relevant.”