What 5G Means for Commerce
Coming soon to a mobile phone near you, the fastest, most connected generation yet. Introducing 5G. A loud cheer resounds from the masses… well, it would if they weren’t so engulfed in their phones. Take a minute to picture it, a world connected faster than ever originally imagined. This is the new world of 5G, and you can bet this global update is going to improve not only our Insta game but how we spend money.
What is this '5G' you speak of?
5G stands for “5th generation” mobile internet (feel old yet?), and with it will come more stable, faster-than-ever connections for our phones, and in turn the Internet of Things (IoT). Basically, it’s a worldwide upgrade for our mobile companions which will make us more connected than ever before.
Mobile phones are no longer tools for simple talking or texting, but have transformed rapidly with the development of gaming and streaming with networks like YouTube or Netflix. These luxuries have placed pressure on mobile networks to adapt as mobile users require more and more data. Though, this change will also affect not only how customers consume, but where customers consume.
What does this mean for me?
The possibilities of 5G go beyond a Netflix binge and are believed to make IoT technologies even more common among consumers. Specifically, in terms of consumer experiences including Virtual Reality (VR) or Augmented Reality (AR), as an example. These technologies will become easier to access creating a mass impact on online stores turning traditional browsing into a rich experience versus a scroll.
Imagine, you need a new couch. You scour the internet and IKEA catalog for something beautiful to adopt, fussing over color, size, and fabric type. You open your mobile phone and point the camera towards the empty spot in your living room. A couch appears. It’s too big, so you swipe and scroll through a selection of couches, each appearing virtually to scale on your living room floor through the screen of your cell phone. Faster, more sustained connections have the possibility of bringing at-home shopping right to your mobile phone instead of the store - all with the help of AR.
If you’re thinking this is a dream created by the same inventors of flying cars, It’s not. In fact, it’s already becoming a reality. According to the VR/AR Association, VR in retail has had a compound annual growth rate (CAGR) of 240% over the last 5 years. This growth can be caused by holographic displays, any type of smart or video glasses, or any immersive experience through a handheld device. VR is already in use by multiple US retailers including home improvement retailer Lowe’s who is working to allow customer’s designs to come to life using their Holoroom. Customers can design their dream rooms like a kitchen through an app, then, through the use of VR glasses, bring their dreams to life to make sure their newly designed room is right before they even buy the first nail.
What's the catch?
5G is it’s not estimated to hit the markets until at least 2020. After it’s released, it will be slowly distributed into the marketplace as people will need to upgrade their devices to activate the service. Though, this slower saturation doesn’t mean that current forward-thinking retailers should wait on experimenting with IoT possibilities now. As I said before, many US retailers have already started to dip their toes into the world of IoT, but all have confirmed that so far there’s no ‘one’ type of VR user. This creates a problem for those smaller retailers who don’t have the time or money to finance multiple experiments to invest in something they are not sure will work.
Of course, this quest to digitize the customer journey will not be a free exercise. VR is expected to become a $90 billion-dollar industry in 2020 before 5G is even widely released. The CEO and co-founder of the VR/AR company Marxent Beck Besecker said in an interview, “Specific to retailers, the biggest challenge is going to be looking beyond the fiscal quarter for ROI (return on investment).” Adding that for companies who want to be successful in the long-term post 5G world, need to think of ROI in terms of 24 to 36 months ahead instead of short-term gains. This will require testing and innovation which focuses on the customer before any specific monetary goals.
Where do I start?
With your customer.
VR and AR are not waiting for 5G, and are already being used across online commerce to traditional brick-and-mortar stores. The previous Lowe’s example is a very unique experience of a brick-and-mortar shopping experience, but there are many who are combining their traditional customer with the flexibility of their newer, omnichannel customer.
This transition will take time and money to test the vast possibilities of how to enhance your own personal customer journey, so it’s important to pay attention and record your own personal customer trends. Particularly:
- How does your customer prefer to shop right now?
- What digital opportunities is your customer already using?
- What actions do they take on their phone, desktop, or other which lead them to make a purchase?
Ready or not?
This isn’t your grandmother’s internet, and no matter if you’re excited about the possibilities or not the demand for 5G is already here. Always keep your own customer in mind, and find a commerce partner who looks ahead (*cough, Spryker, cough*) and does not only respond to the market as is. It’s a fast, new world out there; don’t get left behind.