Augmented reality (AR) and Virtual reality (VR) have come a long way from being immature technologies to creating a massive impact completely. With over 8.9 million AR/VR headsets sold in 2019 and AR enabled smartphones, it can be seen that consumers are acknowledging these technologies. These groundbreaking technologies are also referred together as Extended reality (XR) due to the similar nature of use and functionality.
Retail is one of the most competitive fields of the economy. It is common knowledge that no matter how niche your market might be – you have to fight for the place under the sun, you have to persuade customers. That makes retail businesses particularly interested in finding new and more elaborate ways of engaging customers and establishing new brands.
The key challenge is developing software that works with AR/VR devices for these specific use cases. According to a Goldman Sachs report, AR/VR retail software revenue is expected to reach $1.6 billion by 2025.
Retailers can use this technology to fundamentally change the way consumers shop, creating deeper engagement, increasing customer delight and efficiency to drive sales and maximize ROI.
Retailers must also anticipate the changes in consumer behavior due to the spread of the coronavirus pandemic globally. While consumers are largely dependent on CPG manufacturers and retailers for a constant supply of essential goods, retailers are facing a tough time catering to the surge in demand while keeping up to safety standards and living up to customer expectations. On the other hand, retailers that cater to durables have temporarily closed their brick and mortar establishments and are continuing to engage customers on various online platforms and through other initiatives.
Now, more than ever digital transformation will play a critical role for retailers. Implementation of AR & VR in retail helps retailers and consumers alike have a better shopping experience while reducing operating costs of retailers and offering an immersive, engaging and safe experience to consumers.
While AR and VR fall under the same realm, there is a significant difference in the hardware and software that goes into enabling these technologies and the experience that they create. While AR layers digital information into real world scenarios, VR offers a whole immersive experience. A multitude of devices such as smartphones which a vast majority of consumers possess are already AR enabled making it more accessible, economic and easier to execute. Over two billion smartphones are capable of displaying high quality, true-to-size AR content. VR on the other hand requires specially configured devices that are rather costly and not possessed by the average consumer. Although the number of VR devices being sold has seen a significant increase over the years. Hence we’ll be discussing both these technologies individually in the coming sections.
People are now more inclined towards staying home as a result of lockdowns in several countries, self-quarantine and compulsory work from home. With social distancing norms in place, consumers are more and more reluctant to visit stores in person, which is severely affecting retailers in nearly every industry.
Hence, people have more free time now. You can expect consumers to spend more of this time shopping online. Thus it falls upon you to enrich the consumers shopping journey and help them make better decisions.
With AR technology consumers can use their smartphones to bring life to a product and see what it might look like in their homes, on their tables or walls, or even on themselves.
Here’s how Ikea helped consumers make quicker and better decisions while engaging with AR.
Brands that have been early adopters of AR technology have seen significant lift in sales for several years. Conversion rates are increasing anywhere from 10% to as much as 200%. Product returns are dropping by 25%. Time to make buying decisions has been cut in half. AR is making impacts with real ROI that can’t be ignored, even without looming fears of coronavirus.
Some ways of doing so is by prioritizing consumers’ safety, establishing trust and offering convenience and ease of use.
By using AR to facilitate in-store navigation, you can help consumers reduce the time spent and interactions in the store. You can choose to provide consumers with directions to the stores from different mall entrances or with in-door maps to enable them to find items quickly in the store.
A similar application can also be put to use through mobile phones while consumers shop online from home. This could accelerate the decision making process and drive more sales while reducing returns.
In such a situation, you can use AR to create a digitally enhanced experience of the product which consumers can interact with from their homes. Consumers delighted by such experiences not only increase brand loyalty but also act as advocates for the brand. Recently OnePlus launched their new OnePlus 8 smartphone series online via youtube live. Shortly after, the brand launched an AR version of the unboxing of their new phone which customers could try using the AR filter option on instagram which they can further share on their social media creating more engagement.
You can also use AR to recommend products to consumers.
On the other hand due to the global pandemic situation, consumers wouldn’t prefer visiting multiple showrooms or interacting and coming into contact with many people.
VR can bridge consumers’ seeming conflict between the desire for personal service and unwillingness to visit a store by enabling experiences virtually. For a car purchase, this might mean exploring the cockpit or taking a virtual test drive.
The potential for using virtual reality in online retailing is obvious: it allows retailers to create much more immersive and engaging experiences that mimic those of physical retail stores, as well as adding enhancement not possible in the real world.
Because it’s still a relatively novel technology, having a VR installation in-store can drive footfall by creating a buzz around a particular part of the shop. In turn, this can lead to increased dwell times – and if the plan for the VR area is well thought out, this can mean additional sales for key items and more browsing of important product categories.
Toms shoes company chain is one nice example of VR for retail. The company follows a One-for-One giving model, in which it gives a pair of free shoes to a child in a developing country for every pair purchased by a customer. To bring that to life, Toms developed a 360-degree Virtual Giving Trip campaign to give customers the opportunity to experience first-hand the impact of their purchase.
Walmart adopted VR to help identify employees for management positions. Wearing Oculus Go VR headsets, associates are immersed in real-life situations, such as calming an angry customer or taking new employees on a store tour to test their decision-making, leadership capabilities, and soft skills in challenging situations.
Retailers that already have AR and VR capabilities in place are better prepared to adapt to the changing customer behaviour. AR and VR collectively offer a unique shopping experience to your customers that helps them make better decisions while saving their time and keeping them safe by either reducing contact in stores or enabling an immersive experience while shopping from home.
That’s why it’s a good time to think about how you can use AR and VR in your online and physical stores. Customers will return, not just for a bargain, but for the experience your store offers.