Virtual reality is changing the face of retail by adding a new dimension to a shopper’s experience.
Imagine this scenario. You’re planning to buy a birthday present for your Mum. Like every year, you plan on splitting the cost with your sister. You both search online to find the perfect gift and settle on something for her next holiday. The only problem is the website is not great. It’s tough to see the colors properly and if you buy in-store, you can get it personalized. The other challenge – you live in New York and your sister in London, and neither of you is near a store.
Enter virtual reality.
You can both enter the store, see the product, and test it out, all from the comfort of your two abodes.
Virtual reality (VR) and its sister technology augmented reality (AR) are changing the face of retail by digitally transforming how people shop. You are no longer limited to the 4 walls of a store or the limits of a website. In the future, you will be able to try on that dress you’ve been eyeing without going in-store. You will be able to test if that dining set fits in the space and looks good in your dining room with the rest of your furniture.
VR and AR are emerging technologies, however investment in the sector is huge right now, with startups raising $658 million in 2015. In the retail space, some predict that investment could be close to $30 billion by 2020.
The digital transformation of retail is enabling the application of technology to eliminate customer pain points, improve customer service, and create a differentiated, unique, and personalized customer experiences.
The successful incorporation of VR and AR into retail models has already begun. Here are just a few examples of retailers who are ahead of the game when it comes to this new technology.
Back in April last year, IKEA launched a pilot Virtual Reality (VR) Kitchen Experience for HTC Vive on Steam. The IKEA VR Experience for Valve’s world leading game platform Steam was a test app featuring a virtual kitchen experience and marked IKEA’s first leap into the world of virtual reality.
“Virtual reality is developing quickly and in five to ten years it will be an integrated part of people’s lives. We see that virtual reality will play a major role in the future of our customers. For instance, someday, it could be used to enable customers to try out a variety of home furnishing solutions before buying them.” – Jesper Brodin, managing director at IKEA of Sweden and Range & Supply Manager at IKEA Group.
The IKEA test app allowed the consumers to bring a virtual kitchen into the real world, in real size. The HTC Vive headset then allowed the consumer to explore the kitchen and the various settings available. You could change the color, adjust the layout, and view the kitchen from multiple perspectives from a 3.3-foot tall child to a 6.4-foot tall adult. This additional perspective could help uncover hidden dangers or even pain-points for consumers to improve the design in the future.
Towards the end of last year, L’Oréal launched its virtual reality training program for salon stylists, developed with 8i and professional hair care brand, Matrix. Unveiled at the Fast Company Innovation Festival, L’Oréal’s “Matrix Academy,” an educational program will mean that instead of traveling across the country for training or watching two-dimensional YouTube videos, stylists will have the opportunity to learn new styling techniques through a VR headset, putting them in the center of training. The training program features a stylist and a client, two realistic people in a 360-degree salon setting. Students in training will assume the role of the stylist through the VR headset and will be able to watch the technique being taught from any angle.
“From our perspective, hair is the hardest possible problem,”8i‘s Linc Gasking said. “We’re not talking about computer-generated hair. It’s photo-realistic hair that you can see from any angle.”
Yesterday, Lowe’s furniture announced that it is testing a new ‘Holoroom’. Created to answer a growing concern from customers who lack the confidence to build the company’s DIY projects. The company has started running a proof-of-concept program at its store in Framingham, MA. The Holoroom How To, an on-demand virtual reality skills clinic will help customers address in-home DIY efforts.
Essentially, using a virtual reality headset and controller the customer is immersed into the DIY project and will receive step-by-step instructions to complete the task. The use of Haptic feedback, such as feeling the vibration of a drill, adds to the life-like experience, without the waste or mess of testing a DIY project in the real world.
This is the latest iteration of Lowe’s Innovation Labs’ Holoroom experience, which was introduced almost three years ago.
Converse’s Sampler mobile app gave their consumers the opportunity to imagine what a product would like on-foot. Simply by pointing their smartphone camera at their leg, a virtual example of the converse being worn would appear.
Back in 2014, UK clothing retailer Topshop unveiled its virtual dressing room. Partnering with technology agency Inition, they created a complete virtual world of Topshop Unique. This reality allowed consumers to try a garment on. It also marked a shift in the use of VR and AR in retail. This was the first instance where consumers could get multiple perspectives of the clothes, both from the back and the front.
Disney, the source of magic on earth, has been experimenting with virtual and augmented reality for a while. For example, to celebrate the release of its summer blockbuster Pete’s Dragon, they created a special promotional website.
In its stores, Disney has been using augmented reality to bring its famous characters to life. Children can engage with their favorite characters outside of the Walt Disney World parks.
In 2016, Disney announced its new augmented reality technology that allows you to bring your coloring book to life. Taking technology previously used by the company’s film directors to change character’s emotions, the new technology allows you to make you’re coloring a 3D character as you are color.
Alibaba, eCommerce giant, unveiled their Virtual Reality store back in 2016. Using this opportunity to boost its sales on ‘Single’s Day’ in November, for the first time the retailer offered its consumers the chance to shop online and virtually.
Essentially, to use it, you simply stare at the product you wish to purchase. The item is then marked with a blue dot. Stare at the dot long enough and the item leaps off the shelf into your basket. Bob your head a few tie to pay for the item.
According to the retailer, in the first hour of unveiling 30,000 people had tried the platform. By the end of the ‘Single’s Day’ sales, 8 million people had tried it.
Should you invest in Virtual Reality for your retail business?
It’s hugely tempting to jump on the bandwagon and get excited about this new technology. However, it is important to consider whether or not this is right for your business and your customer.
The first step is to decide which technology would you use for your application. VR or AR? Are you looking to immerse your consumer in a simulated world? Or are you looking to overlay virtual elements into the real world through a mobile device?
Virtual Reality is certainly more immersive, and this more exciting. But the majority of consumers are not yet fully accustomed to wearing VR devices. Look at Pokémon Go’s success in comparison, proving that any smartphone can be a platform for Augmented Reality.
The next step is to decide whether or not your application is for in-store or out-of-store. The two environments offer different challenges and opportunities. In-store applications involve a potential customer using VR or AR within the limits of a traditional shopping environment. Out-of-store, the consumer would be virtually engaging with you.
Once you have decided between in-store or out-of-store, it’s now time to identify the customers who are likely to adopt the new technology. Here you also need to identify potential pain points.
Important – if you can’t identify customers who would want to engage via virtual or augmented reality, then don’t invest. If it’s not right for your market, it’s not right for your business.
Next, comes the value proposition. Your customers will need to understand the benefits to them if they are to keep using it.
Lastly, you are running a business. Make sure that it fits into your business model, or will allow you to grow your business in a new area.
What’s the future of Virtual Reality and Augmented Reality in retail?
Forbes recently took a deep dive into this very question.
What is certainly clear and agreed upon by most experts is that we are going to see the adoption of virtual and augmented reality applications by retailers increase in 2017. With successful use of the technology across the industry as well as the incredible success of apps like Pokémon Go has indicated to many that consumers are ready to adopt this tech. In fact, it echoes the trend that consumers are increasingly looking for experiences.
It’s possible that retailers investing in VR or AR will be forced to radically adapt their stores. The traditional concept of a store is in trouble as foot traffic as never been lower, especially over the holiday season. Online and mobile apps won the holiday race in 2016.
Virtual and augmented reality offers an opportunity for retailers to entice the consumer back in-store.
Omni-channel approaches to consumer engagement have been emerging over recent year. With the uptake of VR and AR adding a new channel to these approaches, the need for data and analytics has increased exponentially. Omni-channel takes data from multiple channels and provides a more holistic view of performance. For retailers, it allows a view of consumer behavior both offline and online. Behavioral analytics that understands the relationship between online and in-store behavior, shopper journey analytics no matter the path to purchase, and holistic product performance that understands the role the product plays across channels is vital to retailers these days. With the emergence of VR and AR, we’ll need to add insight into behavior from these channels as well.