How 5G will impact the retail sector

Daniel Kornitzer, Chief Business Development Officer
(Image credit: Paysafe)

It is no secret that the sky is the limit for 5G. The potential of its applications should leave anyone amazed by the sheer depth and breadth of it all. This new stage of wireless connection will unleash new possibilities in transportation, medicine, manufacturing, videogaming and multiple other areas. This couldn’t be more relevant than in the world of retail. If you take a closer look at its ability, the full range of 5G applications can completely transform the way we shop online and improve customer experience. 

And the real impact of 5G will be amplified by the availability of much more powerful devices, such as smartphones, tablets, smart TVs and AR/VR headsets, as well as by the emergence of edge computing, which will further reduce latency for the end-users.  

Everything old has become new again 

 5G has been called “fibre without the fibre’’, and for obvious reasons – it can produce speeds similar to those of fibre optics, reaching even into the gigabit range, and requires no extensive infrastructure of buried or hung cables due to its wireless transmission protocol. 

With 5G in wide use, merchants will have access to ultra-high-speed internet of capacities that open up a range of new facilities. This includes increased sales for retailers due to increased connectivity speeds, and new IoT opportunities from new devices that can improve customer engagement through, for example, increasingly interactive mobile apps. It enables a range of new markets to immediately allow for products they were not aware even existed, such as artificial intelligence used in medicine. These are available through services that were otherwise unattainable until 5G became available. Market sizes could even suddenly experience double digit growth.  

Everything new is still new, but with more possibility

Those who have used early-model internet access, such as 3G wireless or dial-up internet, know its ability to conduct high bandwidth processes, like stream video, has always been limited at best. Having access to improved systems such as 4G or megabit cable offers significant improvements in performance of these technologies. However, when we try to run the latest technologies on the backbone of current standards, we get the same effect that we did when trying to stream video over dial-up.

Thus, having 5G widely available offers retailers the opportunity to use a whole new range of innovative technologies, such as augmented reality and virtual reality. In recent developments, augmented reality can take a smartphone camera view of a living room and show just what a certain piece of furniture may look like in-place, ahead of purchasing it. IKEA has already introduced this with an app that allows customers to shop interior items in augmented reality. Some shops also offer customers the option to ‘try on’ far more clothes in a shorter period of time by using mirror surfaces. The mirrors show how a particular piece of clothing can look like on a person, without having to physically try it on. These applications are only the start of the new technologies that can be developed with the right underlying infrastructure in place.  

Everything new, and old, becomes wide scale 

The benefits of 5G go beyond just the individual, to wider-scale developments such as smart cities. Here, devices are constantly communicating the presence, location and other factors back to a central hub. Connected cities could include dustbins that alert city workers when they are full, and traffic lights that are able to sense when no traffic is going in one direction and change accordingly, without the use of expensive infrastructure such as sensors. However, with smart cities comes privacy concerns as they depend on a flow of information on a scale never seen before. 

 Will everything old or new still work? 

Although there are many new possibilities that 5G will bring to the retail sector, whether showing us how things look in their proper setting, or taking the hassle out of trying on clothes, not every possibility will be brought to life. The image of such changes has resulted in several key concerns.  

Introducing technology to new markets can impact a region. For example, what would happen to a high street retailer, when anything it has in-store can be found cheaper online? Such places are already often struggling in terms of job availability, so will this new technology be welcomed or actively resisted? Even if this point can be addressed and potentially solved; adoption rates of 5G are expected to be uneven at best. The deployment of 5G will almost certainly not be done uniformly, but instead in a standard fashion. Adoption will address large cities first, then move into rural areas, where some are still waiting for 4G to make an appearance. This means that merchants in major cities, where retail is arguably the busiest, will be able to experience its benefits sooner and offer their customers a better experience. 

5G has the possibility to significantly impact the retail sector, but it comes with potential drawbacks or lack of uniformity during adoption. Whether its smart cities or a retail store, what 5G gives you is a platform that you can scale on and replicate in multiple places. Moreover, it offers a great array of possibilities of new markets and technologies, making it worthy of the resources and investment required for its deployment. 

Daniel Kornitzer

Daniel Kornitzer is Chief Business Development Officer at Paysafe Group. Paysafe Group is a multinational online payments company. The group offers services under the Paysafe brand, but also a under a number of companies the group has absorbed via mergers and acquisitions, most notably Neteller, Skrill and paysafecard.