5G’s impact boils down to how it’s applied.

Huawei, China’s largest telecom giant saw its R&D budget hit a record $15.3 billion in 2018. The reason for the explosion in R&D? 5G.

Huawei’s move to roll out the fifth-generation networking service is aggressive. According to Bloomberg, only Amazon, Alphabet Inc. and Samsung Electronics Co. outspent the Chinese firm on R&D in 2018.

For investors, understanding why vast sums of company capital is being directed at 5G is key. Make no mistake, 5G will change the retail market and how we receive and transfer information. By definition, it will impact how we invest and investing trends.

The fifth-generation mobile network technology (5G) will impact a number of industries, with retail being a major recipient of its benefits. Whether you run an independent clothing boutique, a hotel chain, or a supermarket, it’s important to know how 5G will impact your business.

5G expectations are high. With high speeds of up to 100 times faster than 4G as well as low to zero latency, expectations are high regarding the technology’s impact on applications that retailers will find especially beneficial — artificial intelligence, machine learning, cloud technologies, etc. It is 5G that holds the fate of the much-hyped driverless vehicle market.

Retailers continue to experience a digital evolution, and shopper demographics are ever-changing. Customers demand speed, personalized shopping experiences, and reliability. Retailers can improve such customer experiences with more efficient applications in areas such as logistics, and improve on cost savings via smart energy management. That’s what 5G technology promises — improvements on all aspects retailers find important to new and existing businesses.

Retailers must look into this next-generation network technology to implement new businesses, improve their services, and increase their overall return on investment (ROI).

Why 5G matters so much for retailers?

Every new generation of cellular service provides higher speeds and capacity, with significantly reduced latency. The upcoming 5G technology is also touted to do the same but on an unprecedented scale. 5G offers very low to zero latency, as well as ultra-fast speeds of up to 10GB per second – and possibly more, in some cases.

This is on par with most of the current wired and fiber connections, which are believed to offer top speeds and high capacity. It suggests that with 5G, most commercial operations, including the retail industry, will no longer have to rely on a hard-wired connection even if running multiple applications across multiple systems.

Benefits of 5G for the retailing industry

5G technology promises fast and reliable connections everywhere, without the need for wires and complicated installations. The technology will deliver excellent capabilities to businesses, making them rethink their services and business models, especially to those operating in the retail sector.

Here is how 5G is expected to transform the retail industry:

Role of 5G in retail
Importance of 5G in the retail sector
Source: https://coresight.com/wp-content/uploads/2019/04/5G-in-Retail.png

5G Ushers In New Sales Experiences

5G will provide customers with advanced and convenient virtual and augmented reality experiences. Producing these realistic experiences will require significant processing powers, which will need cloud-based servers. Speed, latency and network capacity are key factors contributing to delivering realistic customer experiences.

As mentioned, 5G can provide raw data rates of up to 10Gbps. Combined with advanced technologies such as Mobile Edge Computing, it can deliver high speed and low latency communications to many users at a time.

5G to Deliver Improved Logistics Management

Combined with smart technologies, 5G can improve the efficiency and safety of supply chain management. It can support a trillion low power devices with high reliability, while keeping information available to businesses at all times.

5G technology also helps ensure that quality and ethical standards are properly complied with throughout the supply chain. It enables safe manufacturing and product delivery just in time to meet consumer demands.

Smart Energy Management & 5G

With 5G, smart energy applications will have much-improved accuracy in control and use of energy in an environment-friendly manner in retail facilities. It can significantly reduce energy bills and protect the environment, giving retailers an opportunity to be more competitive and appealing to green consumer sentiments.

5G helps create a ubiquitous network that connects and manages many disparate networks together as distinct virtual networks.

Concerns over 5G in the retail sector

Despite its benefits, many companies are concerned about the capacity and reliability of 5G networks, when compared to wired connections. However, 5G offers better network capacity and reliability than most hard wired connections. In addition, 5G carriers offer automatic rollover when a system fails, maintaining generators that provide backup to stations to maintain connectivity.

Many companies are also concerned about the operating cost of 5G. However, carriers understand that they have to be competitive to capture the business market. Within a few years of its launch, operating costs of 5G may become less than broadband. For short time needs, the operating costs are already significantly lower with 5G than with a hard-wired connection.

Top 5 Concerns about 5G
High 5G costs is not only a concern for retailers, but also for consumers.
source: https://www.pcmag.com/news/366186/consumers-want-cheap-broad-5g-they-may-not-get-it-in-2019

5G Will Change Roll Out Strategies for Retailers

For many retailers, 5G will change not only how they roll out new technology in their locations, but also the way they maintain and upgrade existing locations. The speed, low latency, reliability and network capacity offered by 5G make it important to consider abandoning existing wired installations for 5G connections. With 5G, installation is simpler and more straightforward. Despite this fact though, the technology may benefit from professional assistance, where the retail sector is concerned. Appropriate equipment must be used to support the 5G connection, and these connections must be managed effectively to benefit from the 5G promises. Herein lies the infrastructure promise. The rollout of this sector and necessary infrastructure to support it is spawning new businesses and an industry experiencing exponential growth.

The major effects of 5G on retail roll out can be narrowed to improvements in customer experience and savings for retailers. These areas can result from a number of applications – artificial intelligence, machine learning, etc. – made better by 5G technology, including those that can improve logistics and supply chain management. Despite concerns about high costs associated with the technology, it will provide a cheaper alternative to wired connections. Savings can also come from other areas in retail, including smart energy management.

5G technology is expected to be revolutionary in most industries. In retail, its benefits are bountiful and clear. The technology is already here, albeit in select areas globally. This means it’s time for hard-thought considerations by retailers regarding 5G and how it can help improve existing and upcoming businesses. For investors, its time to put on our researching hats and find the movers within 5G infrastructure for retail and every other sector this tech is poised to touch.