How will 5G impact retail - and how soon?
- 5G is full of breathless expectations, but what use cases should retailers consider? I put these questions to the SVP of 5G Strategy at Cradlepoint - and got his take on the T-Mobile and Sprint merger to boot.
I'm something of a 5G curmudgeon - it's hard not to be. Wireless carriers push bogus 5G claims, assuming an "always connected" broadband revolution that isn't anywhere near reality - at least in my travels.
But I can't deny the interest retailers have shown in 5G this year, starting with the NRF "Big Show" in January, where 5G was arguably the biggest tech trend under discussion - aside from AI/personalization.
For a 5G retail gut check, I've had an ongoing back-and-forth with Lindsay Notwell, Cradlepoint's SVP of 5G Strategy.
It's probably an exaggeration to say that Cradlepoint is betting its corporate future on 5G, but given that they describe their flagship product, ElasticEdge, as "Our blueprint for pervasive, software-driven wireless WANs based on 4G LTE - and soon 5G," they have plenty of skin in the 5G game.
There's two conversations you can have about 5G: the potential impact, and the obstacles in the way. Those "early days of 5G" obstacles include eye-watering pricing plans that simply aren't realistic for the data 5G will consume (and wireless carriers are mostly moving in the opposite direction, away from the unlimited data plans 5G will require).
When I first talked with Notwell, I put my grouchy agenda around 5G obstacles aside, and asked him: what would be possible if 5G is ubiquitous and (relatively) affordable? Notwell outlines four different categories of 5G retail impact.
5G for Remote SME (Subject matter expert)
Notwell sees 5G impacting retail by bringing human expertise back into play at self-service kiosks. He explains:
If you think about a kiosk, like a DVD rental machine or coin changing or whatever, that's actually the evolution of a retail store, just without a human. What we see is in the future is the adding back of humans, on sort of a cost-leveraged basis.
What that means is I now can take a call center of experts and then put them on high-quality video conferencing, which is why the high bandwidth in gigabit LTE and 5G will really cater itself to, and then enable a face-to-face virtual-assisted shopping, let's call it.
Notwell points to other industries adopting remote SME, such as telemedicine. He believes high speed broadband like 5G will directly impact adoption. Without that, your video quality is spotty and adoption will languish. Notwell:
But if it's great video, and you can deliver a great experience with experts on the other end of the video call, then that's something that people will adopt. So we see that across verticals and industries.
Low latency 5G applications
If 5G becomes commonplace, that opens up new possibilities for low latency applications, allowing a level of real-time interactivity not possible before. Tele-medicine is an obvious example. Notwell referred to a big box retailer he used to work for, where they traveled constantly to job fairs in search of fresh hires. Nothing unusual given retail's high turnover rates.
Notwell pointed to the cost savings of introducing a broadband telepresence, interviewing job seekers remotely and eliminating a good chunk of travel costs:
That's a big deal. That's retail, but it's not what you would normally think in retail.
I recalled my last trip to Walmart, trying to get an employee to explain a wireless headset he had no experience with. If I had the option of quickly having a video conversation with a remote employee who actually knew what they were talking about, would I hit the "talk" button in the store? Absolutely. Notwell sees low latency changing the IT conversation:
This will be a key enabler to do what any IT professional's responsibility is: which is, I'm saving money, making money, or creating a competitive advantage. And so that's just another example where low latency application can enable something.
It's not just about watching high definition YouTube videos on 5G broadband until you're in a stupor. It's about the power of real-time, remote interactivity:
The whole low latency thing, it's sort of a killer aspect of 5G. Not so much the throughput, but the responsiveness. You hear wild ideas like remote surgery.
Notwell acknowledged: he's not signing up for remote surgery just yet. But if we're stranded and injured somewhere, would we risk a virtual, guided how-to? Perhaps we would. Just like Uber and Lyft capitalized on the smart phone, Notwell believes there are pending killer apps that will capitalize on 5G connectivity.
5G for surveillance, security, and facial recognition personalization
Now, this one gives me that queasy feeling, but there's no denying that higher resolution video aids in surveillance, closed circuit television, and facial recognition technologies. Notwell emphasized the beneficial aspects here, including retail security/safety:
Look, we're in the United States. It seems like there's mass shootings almost every week. It's sad that I have to say that. But it's also global, by the way, with terrorist attacks and whatnot. So this is a massively growing area.
One of the really interesting things that advanced 4G and 5G will enable is computer vision and facial recognition for this very thing. We've got a partner of ours now that does this today. They have an onsite server. It's a lot of cost to do it, but they're doing it today. They're applying these video surveillance feeds to computer vision, and looking for things like handguns. Or they know that it's Tucson in the middle of summer, and somebody's wearing a ski mask. Let's alert the authorities. So it's that kind of thing that this really enables, because the resolution goes way up.
I'll add a less high stakes, but also problematic opportunity in facial recognition for shopper personalization. Assuming a consumer wants this and opts in, perhaps there are opportunities here. I worry greatly about 5G facial recognition scenarios, but denying the possibility is naive.
5G cord cutting - and the freedom of time and place
Cutting the cord is no small benefit of wireless broadband. Notwell asked me:
How many DSL providers do you think it would take to cover the US for 1,500 store providers?
Answer: 131 providers.
Think about if you're an IT professional trying to manage that many throats to choke, or hands to shake.
But it's not just about retailers cutting cords and costs. As Notwell says, it's about freedom of time and place.
I was making a comment about fixed wireless, and a CIO said to me, "I'm a slave to my merchandising department, because every time they do a store refresh, I have to move my wiring closet. It would be great if I didn't have to call my ISP to move that D-mark, the wiring outside the building, every single time." I hadn't thought of it that way. But see, this is what wireless gives you, that freedom of time and place.
When it comes to trends like pop-up stores and seasonal retail setups, that kind of agility clearly matters.
The wrap - it's not a 5G revolution, but an evolution
Notwell pushed back against the 5G revolution hype - or the idea of some massive hurdle to make one big leap. Instead, he sees an evolution that's already happening - beginning with the gigabit LTE he referenced earlier. A number of these use cases can begin with 4G. In fact, Notwell sees 4G and 5G working "hand in glove" for the foreseeable future. In some rural areas, 5G infrastructure may never make it - but gigabit LTE will. And the fallback to 4G won't be so terrible:
That's why gigabit LTE was created... Like now in your phone if you ever fall back to 3G, it's like a kiss of death. You can't wait to get back. Whereas with 5G falling back to gigabit LTE, the user experience may be in many cases not even noticeable, depending on the use case.
5G rollouts bring to mind massive infrastructure investments and the aforementioned data pricing problems. But Notwell believes the pricing will flatten out over time:
Having done the business case for 4G, I can tell you how the structure and the cost per bit works, and the cost per bit for a network operator for 5G goes down dramatically... Ultimately that will all get settled by competition, and I think what will happen is you'll see flat-rate pricing.
In my most recent exchange with Notwell, I had to ask him about the T-Mobile and Sprint merger. Given that both emphasized 5G rollout as a crucial reason to justify joining forces, what does Notwell think about that?
All four of the nationwide wireless carriers have been racing to deploy 5G as quickly as possible. Together, Sprint and T-Mobile are pooling their spectrum assets, including their legacy cellular, as well as T-Mobile's newly acquired 600 MHz and mmWave licenses. Add Sprint's 2.5 GHz holdings, and they are creating a network particularly well suited for 5G, with spectrum assets across low, mid, and high frequencies.
I worry that this type of consolidation is ultimately bad for consumers, but Notwell sees it differently:
FCC approval requiring 97% 5G coverage in three years is a proof-point that this merger will accelerate the 5G movement. At the end of the day, this will raise all boats in the wireless industry with the real winner being the end customer.
I hope he's right about that. I'm still grouchy about the corporate fantasies of ubiquitous broadband. But it certainly makes sense for retailers to start examining these use cases. Example: why rollout more wired strorefront infrastructure with these shifts unfolding?
The most fruitful question is clearly: how can we use wireless broadband to make the customer experience better? 5G or not, the answers are worth considering.