While a new generation of wireless connectivity hits the market every couple of years, experts say the move to 5G will be unlike any leap of speed and performance the world has ever seen. The fifth-generation cellular system will nearly eliminate lag times to make real-time functionality and seamless connectivity a reality.
The tremendous leap forward in cellular performance could have big implications across the economy. Sandra Rivera, senior vice president and general manager of the network platforms group at Intel Corp., told Forbes.com that 5G will be the “true convergence of computing and communications and the idea that everything that can and should be connected will be.”
5G will enhance data connectivity, communications, data analytics and the Internet of Things: A report by Transparency Market Research said it will make robotics safer, faster and speedier, something that is expected to grow demand in the global robotics market in the coming years.
The faster speeds, performance and bandwidth will ultimately transform every industry, says wireless analyst Jeff Kagan. But much like retailers didn’t know in 2005 what smartphones would bring to retail, they can’t yet predict the full implications of 5G.
“No one can tell you what the world will look like in 10 years, but because of 5G, the world will be very different,” Kagan says, “the same as it’s different today than it was 10 years ago.”
What is known is that 5G will enable retailers to connect with consumers in real time in ways they never thought possible, says Corey Pierson, co-founder of Custora. Web performance has improved dramatically over the past decade, and 5G will be the infrastructure that pushes it all to real-time instantaneous data transfer.
“It’s just going to take this big leap forward, in terms of what’s possible from the customer experience,” Pierson says. “No one has really figured out yet how to best take advantage of all this increased speed and data, but everyone is excited about the potential it unlocks.”
Omnichannel capabilities
Retailers are already contemplating the possibilities of 5G. From mass deployment of IoT in the store and enhanced app performance to inventory visibility and virtual reality, the new generation of wireless connectivity is expected to deliver a tremendous boost to omnichannel capabilities.
“When I meet with senior leaders in retail, it comes up in the first 60 seconds of every meeting I’ve had over the past five months,” says Michael Colaneri, vice president for global business retail solutions at AT&T.
Most are exploring how 5G might enhance the customer experience and enable them to gain operational efficiencies; while some innovative retailers are already using things like artificial intelligence, robotics, voice activation and automation, a stronger wireless network may enable moving beyond tests and small applications.
“Bridging between their physical — so their store infrastructure — to the digital environment and being able to connect those two, I think, are really where it all comes together for retailers,” says Michele M. Dupré, group vice president at Verizon Enterprise Solutions, a division of Verizon Communications Inc.
5G could open the door for more instant communication and greatly improved experiences, as the lower “latency” — lag time — reduces delays every time a device has to “ping” the network for information. That will offer the opportunity to expand from point solutions and one-off investments to mass-scale adoption that can truly connect all the dots of omnichannel applications in real time.
“Instead of throwing everything at the wall like spaghetti and seeing what sticks, they’re now starting to figure out where technology fits into it and how 5G will integrate all of these things together,” Colaneri says.
Between Wi-Fi, device limitations, networks and operating systems, even the best-performing apps and in-store connections currently have a second or two of lag time. While that may not seem significant, it’s a big deal considering the scale of retail and consumers’ growing demand for speed.
According to Google, half of consumers will now abandon sites that take more than three seconds to load. Adobe Digital Insights estimates that improved connectivity through 5G could add an additional $12 billion in retail revenues annually by 2021.
5G will boost the performance of back-end applications from the operation of robots in distribution centers to cameras and real-time store analysis while also bringing new levels of functionality to things like artificial intelligence, augmented reality and virtual reality.
“Many retailers can’t yet adopt these things because the Wi-Fi in the store often stinks,” Pierson says. “There are too many people on it at once, and [virtual reality]takes too much data for it all to work property.”
Anywhere, real-time retail
As telecom giants like Verizon and AT&T prepare to roll out 5G networks in the next couple of years, nationwide adoption of 5G will not only improve performance but make it easier for retailers to scale and add functionality to new stores without having to deal with dozens or even hundreds of service providers.
“Managing uptime, availability and multiple contracts can be a challenge. If I have 5G available, I can just go to AT&T and Verizon and cover my nationwide footprint of 1,500 stores with two trusted relationships,” says Todd Krautkremer, chief marketing officer at Cradlepoint.
Adobe Digital Insights estimates that improved connectivity through 5G could add an additional $12 billion in retail revenues annually by 2021.
Wireless may also reduce costs by eliminating some of the materials and labor related to hardwired installations. In addition, the increased capacity could enhance IoT and device battery life as devices will have to ping networks less frequently, Dupré says.
As consumers also gain access to their own 5G connections and shift toward unlimited data plans, they’ll no longer need in-store Wi-Fi to optimize app performance. Having to log into store networks to access in-store functionality has often been a hiccup in the omnichannel experience, Pierson says. In a fully optimized 5G environment, consumers could seamlessly walk in and out of any store with a high-speed, real-time connection that enables them to engage with the retailer throughout the process.
While the hardware for digital fitting rooms, immersive in-store experiences and interactive displays has long been available, retailers have often struggled with adoption due to the heavy bandwidth required to support these experiences. 5G could nearly eliminate all those limitations, Krautkremer says.
“All of that technology is powered from the cloud and requires real-time and constant connectivity,” he says. “When you take this digital transformation happening in stores to change your customer experience, all of it requires more and more connectivity at faster speed.”
Finding the value in 5G
Retailers don’t yet have a universal playbook or strategy for 5G because it remains to be seen exactly how it may impact the industry. The key to capitalizing on opportunities will be to stay up to date with the technology and learning how to leverage it to improve the customer experience, especially for brands that cater to younger demographics who rapidly adopt new technologies and expect speed.
“Retailers want to start talking to their customers now about what kinds of things would improve the customer experience,” Pierson says, “and then go to their innovation team and see how they might take advantage of increased data to get it.”
5G adoption could happen quickly over the coming couple of years; recent history has already demonstrated that retailers who didn’t immediately evolve with the advent of mobile shopping quickly fell behind the curve, Pierson says: Consider that while 67 million Americans made a purchase on their smartphone in 2014, that number had grown to more than 100 million by 2018.
The full 5G experience will require not only new capabilities from the networks but new technologies in the hands of retailers and consumers. Cradlepoint already services 75 percent of the world’s largest retailers and recently released new systems as part of its Pathway to 5G solutions.
Consumers will also have to upgrade their devices. Apple isn’t expected to release a 5G iPhone until at least 2020, and according to the latest report by Connected Intelligence, part of The NPD Group, the average consumer upgrades their smartphone every 32 months.
When that day does come, retailers will need to be ready to react quickly. According to a report from Adobe Digital Insights, smartphone visits to retail websites are increasing in value at a faster pace than desktop visits. As consumers rely more on their phones for browsing and purchasing, they’re less forgiving of slow and clumsy experiences.
An increase in speeds and functionality of mobile devices in recent years has already influenced retail. Whereas 15 years ago mobile devices had limited functionality, consumers can now use their phones to unlock doors, check bank accounts and keep track of their health.
“What you’re going to see over the next three to five years is the 5G coming to market in pockets, from city to city, starting with football cities,” Krautkremer says. “And it’s going to influence a lot of changes.”
Spandan Mahapatra, business head of the high-tech software segment and head of high-tech industry digital at Tata Consultancy Services Ltd., authored a white paper last year on 5G in various industries. He says there are many use cases today that haven’t been adopted because of the underlying networks’ throughput, capacity and latency issues.
While retailers tried to change their game and invest in omnichannel, they now have a unique opportunity to elevate the customer experience. It’s especially important for millennials and other demographics in what he says will be “5G-enabled social and mixed-reality commerce.”
“The biggest possibilities will arise from the capability of applying AI and machine learning models on top of real-time streaming data,” Mahapatra says.
Privacy and Security in the 5G World
5G will bring about more speed and seamless connectivity at a time when consumers are growing more concerned about security. As they leverage 5G to grow closer to consumers, retailers will have to keep these considerations at the forefront.
By nature, 5G will make it easier for retailers to track consumers and their every location and every step in the aisle and obtain access to that data in real time. Combined with the proliferation of IoT devices — both in the home and in the stores — retailers will have endless opportunities to engage consumers with new personalized and seamless retail strategies, says wireless analyst Jeff Kagan.
“We just need to stay aware and make sure we don’t cross lines we shouldn’t,” he says. “I think we should continue moving forward embracing speed, but we also need to focus as heavily on protecting our information and our security as we introduce the next ‘wow’ devices.”
Craig Guillot is based in New Orleans and writes about retail, real estate, business and personal finance.