The exponential growth of e-commerce has taken its toll on brick-and-mortar retail stores. Retailers must provide a convenient, immersive customer experience to lure shoppers away from online shopping. Technology plays a big part in achieving that.
Many retail environments use cellular networks to support store systems, such as point-of-sale (POS) and video security. Retailers choose cellular over Wi-Fi for use cases in which POS systems must operate in remote areas or be mobile (e.g., on a food truck). Third-party companies that install kiosks and displays in retail environments without access to local infrastructure may need drop-in cellular connectivity.
Credit card operators have almost completely gone cellular for their POS terminals. Their experiences have shown store purchases foiled by lack of connectivity (e.g., Wi-Fi and on-premises wired broadband) will very rarely be recovered. The shopper will either purchase with cash or abandon the purchase completely. In either case, the credit card operator loses.
Cellular’s flexibility is an advantage in some retail situations. What impact will the arrival of 5G have on this sector?
3 5G Use Cases in Retail
Looking toward the future, here are a few areas where 5G could make an impact in retail:
1. Strengthening Back-End Network Management
5G will support traditional network management when retailers want improved capabilities for wireless compared to what is available with 4G, such as:
- Higher bandwidth
- Lower latency
- Better capacity
- Ultrahigh reliability
When a retail company installs a wireline replacement or failover backup, the demand for data bandwidth on the network increases. 5G can supply what’s needed to keep the network running smoothly.
2. Supporting High-Quality Digital Content
Retail space designers will take advantage of 5G’s higher bandwidth potential to create and deliver more content to consumers. Some examples include:
- In-store smart displays
- Interactive kiosks
- Computer vision
- Billboards and smart digital signage
- Augmented and virtual reality (AR and VR)
High-bandwidth connectivity will allow further development around other AI applications. These will enable systems to tailor content based on consumers’ demographics and other variables.
5G will also enhance video security systems using computer vision to detect anomalies and potential threats. Such systems require a lot of bandwidth to transmit high-quality images and video content. The bigger data pipeline 5G provides will make it possible to further develop their features.
3. Enabling Robotics and Automated Delivery
Some retailers are experimenting with in-store robots and automated delivery services that rely on autonomous road vehicles. The high-bandwidth 5G enables will drive further development of these technologies and make them more practical. The growth of autonomous vehicles in the supply chain will also impact retail. Deliveries will be faster, more trackable and affordable. It will enable improvements in warehouse management tools, such as sensors and robots.
Challenges for 5G Adoption in Retail
While 5G promises to bring revolutionary changes to all sectors, that time might not come for a while in retail. New developments are likely to be more subtle and slow over the next several years for reasons that include:
1. Cost Barriers
Television commercials from major carriers might lead you to believe 5G is becoming ubiquitous throughout the U.S. This initial iteration of 5G enables faster video downloads and higher quality mobile videoconferencing. However, it is not equipped to deliver massive IoT and affordable high-bandwidth connectivity for industries at scale. For those capabilities, retailers must wait for Rel 17 and beyond. Even then, the cost of upgrading to a 5G network relative to retaining 4G is likely to be prohibitive. Building out 5G infrastructure is a costly investment for carriers. They will likely be recouping that cost for years. If 4G is enough to power retailers’ technologies, many will stick with it for a while instead of switching to a more costly 5G service.
2. Technology Complications
5G relies on different technology than previous cellular generations. This difference could be a deterrent to development for retail IoT applications. Millimeter wave (mmWave) is more complex and limiting in use cases due to its radio frequency (RF) interface. Developers will explore the new possibilities it presents, but new products may not move into the retail sphere rapidly.
5G will take time to develop and mature. However, it will make an impact on retail and e-commerce with new efficiencies and technologies. The time is now for retail system integrators and solution providers to learn and experiment with 5G.