What Will 5G Mean for Local Commerce?
October 8, 2019 | Contributed by: Mike Boland
Tech Vision is LSA’s series that spotlights emerging tech. Running semi-weekly, it reports on new technologies that LSA analysts track, including strategic implications for local commerce. See the full series here.
We’re hearing a lot about 5G these days. But what will it mean specifically for local commerce? Branching from that are sub-topics like ad targeting and attribution. And will 5G improve user-facing app experiences like more precise navigation and local discovery?
These questions are top of mind as Neal Polachek and I will run a mini-session on 5G at next week’s Localogy Place Conference. But before diving into the above questions, we should stop and define what 5G is and how it works. It has joined the lexicon of tech buzzwords (AI, iOT, etc.) but it’s rarely defined.
Stepping back, 5G is a high-frequency, low-range signal, so base stations will be clustered densely. Instead of cell towers spread out like today, tiny 5G stations will blanket areas in a sort of edge-computing mesh network that distributes bandwidth and processing optimally to each user.
This allows for those same stations to more accurately triangulate spatial positioning, compared with cell towers today and even GPS. The latter boasts meter-level accuracy, but 5G will have millimeter accuracy in many cases. That unlocks a few new possibilities for content delivery.
Little Blue Dot
For example, 5G could boost the perennially important subsector of ad targeting and attribution. There’s been a longstanding challenge that location signals are unreliable. Disingenuous ad networks will sell location-targeted ads at a premium, but they could actually be off by miles. 5G could help that.
When looking at leaders in location tracking such as Foursquare, its stop data to measure users’ “real stops” and dwell times at a given business (as opposed to just walking by) can gain greater precision and reliability. This will shine in dense urban areas, shopping malls and other commercial zones.
“5G is not inherently focused on location, though the frequency range and likely network deployment topology will improve location capabilities via better triangulation,” Foursquare SVP of engineering Matthew Kamen told me. “All of this is advantageous to us as a location technology platform, as we provide tools for Fortune 500 brands and tech companies wanting to understand and reach audiences as they move through the world.”
5G could also impact user experience, such as Google’s Live View 3D visual mapping interface we recently examined. Because GPS is unreliable in urban canyons Google applied a clever workaround to localize a device by visually recognizing where it is (matching camera feed to Street View database).
5G could provide an even better way for apps to localize. This will be critical for visual search (e.g Google Lens) and other emerging local flavors of AR. When holding one’s phone up to contextualize a storefront or get walking directions, it can’t be off by meters like we often forgive the little blue dot in 2D mapping.
This reaches new levels when we bring it inside. Building interiors are still the last frontier for location tracking, given the drawbacks of GPS. And we all know what happened to beacons. In fact, 5G could step in to realize the unfulfilled promise of beacons given less opt-in/settings friction that killed the latter.
Invoking Google again, this is an area where it’s salivating to better attribute its impact on the last mile to the cash register. It’s long relied on various proxies and extrapolations from A/B testing to credit card data. A 5G-fueled in-store visual mapping utility could be a sort of trojan horse for first-party attribution data.
Beyond Google, this could all play into the broader transformation we’re seeing in retail, including the emerging “retail as a service (RAAS)” subsector we examined last week. We’re talking Amazon Go-like capability for cashier-less stores and in-aisle payments, but without costly and invasive ceiling cams.
5G’s could end up being a better enabling technology for the same outcome. It could enable more precision in actions like knowing when you’ve put something in your cart. This comes with other longer-term implications like targeted in-store messaging and shopper personalization (again… beacons).
As for when? CSS insights projects 340 million 5G connections in 2021, then one billion in the first half of 2023 and 2.7 billion (about a third of the world’s population) by 2025. Take these projections with a grain of salt and consider hardware bottlenecks for both network equipment and 5G-enabled phones.
There will be other roadblocks. 5G faces lots of uncertainty and scrutiny when it comes to its environmental impact. Back to the orientation of tightly clustered base stations, we also foresee logistical rollout challenges in rural areas. It’s highly conducive to cities but will it make sense in Lake Tahoe?
That’s why we’re keeping a cautiously optimistic view of all of the above coming to fruition. In the next half-decade, we’ll likely see 5G as an impactful technology in urban areas and other selected zones like malls, business districts an anywhere there’s a strong enough business case to deploy it.
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