Five ways 5G will change retail

5G is a hot topic - along with Web3.0 and the Metaverse. But like other technologies, 5G is not a specific solution, but an enabler. What matters most is what you do with it.

So what can retailers do with 5G? The answer is nearly endless, but in short, 5G will enable merchants to perform complex digital tasks faster and at greater scale.

“5G is really about three things — speed, latency and mass connectivity,” said Michael Colaneri, who spent 30 years at AT&T and now leads the retail telecom vertical. “Speed ​​is how fast the connection is; latency is what kind of friction you experience at that speed; and mass connectivity is being able to distribute it more efficiently to more people.”

5G is still in its infancy at both the consumer and enterprise levels, but is expected to grow rapidly and become the dominant mobile access technology by 2027, reaching 90% penetration in North America by then, according to Ericsson.

This ultra-fast connectivity — when used in conjunction with other technologies like the Internet of Things, computer vision, or cloud computing — will enable everything from virtually enhanced personalized in-store shopping to real-time shelf item detection to supply chain tracking. Not to mention it will be a critical component of the Metaverse.

“5G will dramatically change the way we shop, how businesses operate, and how retailers gain real-time insights from data to drive business decisions with incredible operational efficiencies,” said Lisa Collins, head of enterprise partnerships and product strategy at Verizon 5G Labs.

What exactly is 5G?

In short, 5G is the next generation of public mobile networks. Before it arrives:

• 1G – Mobile phones first appeared
• 2G — Text messaging appears
• 3G – Bringing Internet to Our Handheld Devices
• 4G - The era of smartphones, devices that can perform multiple functions simultaneously, now dominate our lives.

Then in 2019, 5G entered the market (in case you were wondering, 6G is not expected to arrive until around 2030). “5G includes new capabilities not available in previous generations of mobile networks,” says Steve Gurney, global head of grocery retail at Amazon Web Services (AWS). “[This includes] higher connection density—the ability to connect 100 times more devices than 4G/LTE—and the ability to virtually segment the network, giving different categories of users [like retail stores] their own customized networks. These new capabilities make 5G more attractive to businesses than previous mobile technologies. The upgrade to 5G is similar to the way home broadband moved from copper to fiber.”

So what does all this mean for the retail industry?

“Today, there is a lot of awareness among our retail customers about 5G, but there is also a lot of misunderstanding,” Colaneri said. “My customers often talk to me about the urgency of moving to 5G because they think it will be a huge cost savings. Maybe. I can’t even tell you if that’s the case unless you know what you’re going to do with it.”

Here’s the rub – narrowing down 5G’s vast potential into a series of specific business investments can be challenging, especially as inflationary pressures tighten retail budgets.

One common thread is digitization. Here are five places where 5G experiences/solutions are being tested or already deployed in retail stores.

1. Real-time fraud prevention, customer support, etc.

When 5G’s speeds are combined with mobile edge computing (where data processing and storage occurs at the “edge” where data is collected, such as a retail store), real-time data analysis and response becomes a reality. This is often closely associated with cloud computing (where data processing occurs in the cloud, rather than on-site servers).

“5G and mobile edge computing can transform the business experience,” said Verizon’s Collins. “Before, you needed to set aside a room in the store to house servers, which was expensive, difficult to maintain, and prone to theft, given the space constraints. Now, we’re working with companies like Google, Microsoft and Amazon, who manage data processing in the cloud to power whatever retailers want to do.”

Additionally, AWS’s Gurney explained, “5G provides more bandwidth, especially upload bandwidth, which means retailers can upload videos from stores to the cloud more easily and quickly. 5G also reduces latency between end devices and the cloud, which allows retailers to use advanced services such as artificial intelligence and machine learning to analyze video content and respond in real time—think in-store customer traffic, customer profile analysis, abnormal customers, intelligent employee scheduling, threat detection, and breach detection.”

2. Fast and smooth checkout

The higher bandwidth/lower latency combination will also result in an enhanced, frictionless checkout experience. Verizon’s 5G Labs has been testing this with computer vision partner AiFi. AiFi’s solution is similar to Amazon’s Just Walk Out technology, which uses cameras and AI to track what consumers buy in stores, providing a true “grab and go” experience.

Verizon and AiFi have deployed the solution at a number of recent events, including concerts, the Indy 500, the Brickyard NASCAR race, the Express Shop at Miami’s Hard Rock Stadium, and in partnership with Levy, the food and beverage provider at Detroit’s Ford Field. “We compared same-day sales at one store to those at the AiFi store, and on the first day alone, we doubled revenue, cut transaction time in half, and doubled the number of items purchased,” said Collins.

3. Enhanced, personalized in-store shopping experience

AWS’s Gurney noted that more bandwidth and the ability to support more devices “opens opportunities for innovative solutions that anticipate customer needs and create hyperlocal experiences using customized mobile apps, such as in-store navigation and promotional offers based on a consumer’s shopping history, or AR experiences that overlay data in real time on a customer’s mobile device.”

Colaneri said 5G devices are expected to reach saturation in the US around 2025, at which point “things are going to start to get really interesting.” Indeed, the possibilities seem endless at this point, with AT&T highlighting applications such as “magic mirrors” that will be able to identify the item someone is trying on via RFID tags and display relevant ads and related accessories in the fitting room. In fact, COS, part of the H&M Group, recently announced the rollout of smart mirrors in its US stores — the future is here.

4. In-store inventory management

When combined with technologies such as IoT-embedded sensors, 5G will allow retailers to gain real-time visibility into store inventory, allowing them to restock shelves when items are running low.

“Verizon has been using AWS Smart Shelf technology to test missing shelf inventory, and we’ve found that we’ve been able to drive 12 to 13 percent revenue growth just by sending back real-time data,” said Collins. “In addition, we’re able to understand which areas have the most traffic so we can redirect or optimize staffing.”

5. Supply Chain Optimization

According to Colaneri, there are two areas in retail where 5G is already becoming commonplace – distribution and supply chain.

“A retail distribution center is a large technology platform where you bring goods in by truck, rail and ship, and then forklift them into the warehouse and distribute them,” he explained. “In the 4G world, the signal is very spotty because retail distribution centers are often in the suburbs. If you want to get continuous, real-time data on the location of items, then signal stability becomes very valuable, especially when the items are temperature sensitive.”

Colaneri added: “With 5G and IoT, we can tag items and then track their temperature, location, viability, etc. throughout the area before they are delivered to the store. We can also keep an eye on the supply chain, which has become very important, especially with the challenges that the supply chain has faced in recent years.”

Gurney said AWS is providing reliable network services through its dedicated 5G product at Amazon logistics centers, which enables Amazon to move guided trailers across these vast areas more efficiently, safely and accurately.

“From stores to stadiums to warehouses, one thing is clear – none of this would have been possible before 5G and mobile edge computing,” Collins said. “5G and mobile edge computing will not only enhance, but transform the next generation of experiences, and this is just the beginning.”