When Wi-Fi Gets Too Fast, In-Store Customer Wi-Fi May Be Doomed

What happens when Wi-Fi gets too fast to be useful to retailers? We should know in about three years. On Monday (Sept. 12), analyst firm ABI Research predicted that the next generation of Wi-Fi (officially known as IEEE 802.11ac) will become the dominant wireless protocol by 2014. The new Wi-Fi will be fast enough to pump out multiple streams of high-definition video—which will be a nightmare for stores offering customers Wi-Fi, because letting customers slurp up that much data would require each store to have an Internet connection roughly the same size as a large ISP.

Of course, that's only a problem if that high-bandwidth content comes from the Internet. If it's served from within the store, customers could receive a constant stream of commercials, product pitches and other videos on their smartphones and tablets. There's just one difficulty: If customers are accustomed to having a huge pipe to the Internet on their personal devices, they won't react well to retailers that have cut back their bandwidth ration to just enough for the Web, E-mail and Twitter—unless there's someone else available to blame.

The irony is that retailers have only been able to offer customer Wi-Fi because expectations are low. Tiny mobile screens only require shrunk-down video, so even if customers want to watch movies on their phones, they sip bandwidth instead of gulping it. But tablets are already showing themselves to be bandwidth hogs, and that's before the new chipsets beef up their capacity to bring down retail networks.

In practical terms, offering customers the bandwidth they will soon come to expect is going to be prohibitively expensive. It might lead to a bandwidth race—retailers competing to see who can supply the most bandwidth for customers. And that, of course, would be a complete waste, because every in-store minute a customer wastes watching HD video on the Internet is time the customer isn't shopping—or even being pitched the retailer's products.

(The potential exceptions: video and game retailers. Even then, serving that video from within the store makes more sense than letting customers get it from the Internet. Besides, will there even be video retailers in 2014?)

A better approach might be to shift responsibility for supplying customer bandwidth to someone else. That way, retailers can still use Wi-Fi in-store for handheld POS and tablet-based demos. And customers? All they would need to do is connect to their mobile operator's network. In most stores that will only work if retailers cut the appropriate deals and install the right equipment to bring signals for as many as a half-dozen mobile providers into the store.

That way, the mobile network is to blame when the movie doesn't play (and what mobile customer isn't ready at a moment's notice to blame his carrier?). Meanwhile, no one will ever complain that they can't get bars deep inside a mall or big-box store. And with the right deal with carriers, retailers may even be able to identify customers as they walk in the door by their cell-phone numbers.

Today that's viewed as too big an investment. But if the choice is between doing a deal with mobile operators or adding a giant connection to the Internet just to lose customers' attention, that decision becomes a whole lot easier.