How Major Retailers Can Leverage VR and AR Solutions
Struggling with dwindling numbers, retailers are turning to new virtual and augmented reality (VR & AR) applications to better serve their demographic and attract new customers. These technologies use product targeting, immersive experiences and customized benefits to tantalize consumers and equip them to enjoy a new level of service.
In an era of intensified competition in the retail industry, when every week seems to bring fresh news of store closures, the merchants that manage to stay open are looking for any advantage they can get. With this in mind, some stores are making big speculative investments in virtual reality (VR) and augmented reality (AR), hoping to attract fresh customer interest and to position their brand at the leading edge of tech sophistication. Brick and mortar outlets are seeking to transform the in-person shopping experience through the use of reality-changing technology, while retailers across the board compete for more online business as well.
Today’s evolving retail environments now allow customers to try on clothing and cosmetics remotely, without touching the actual products. Shoppers can confidently order new appliances and bulky furniture online, having made sure through AR positioning that they’ll fit into their designated spots in the home. Products from shoes to watches to lipstick to house paint can now be tried out virtually prior to purchase, encouraging shoppers to develop a sense of ownership of the item before they make a purchase decision.
While VR and AR applications both have the potential to disrupt the accepted retail business model, they tend to achieve this disruption through different access points in the store’s operations. Market researcher Nikki Baird notes that, as a general rule, AR is more applicable to the direct shopping experience, while VR often works its magic behind the scenes, providing new insights for managers and store designers. Of course, customers benefit either way: their experience is enhanced if VR enables an improved store design, even if they are not aware of the technology’s impact.
While VR truly immerses users in a virtual world, AR overlays virtual elements onto real life videos or photos. To take advantage of the unstoppable march towards a new selling landscape, the first step for retailers is to identify which of these emerging technology is a better fit for their commercial strategy. The next step is to evaluate the possible innovations against current budget and hardware constraints. As LoyaltyOne president Bryan Pearson notes regarding AR and VR, “Specific to retailers, the biggest challenge is going to be looking beyond the fiscal quarter for ROI (return on investment).” Below, we analyze the values that each technology brings to a 21st-century retail business model, and provide a brief overview of the respective benefits offered by each of these emerging capabilities.
Of the two types of reality technologies, VR attracts the most attention. Since it enables a user to experience being within an entirely fabricated environment, it typically involves expensive, sophisticated hardware. At the very least, a headset is required. This must block out the user’s actual physical surroundings while immersing them in the sights and sounds of the manufactured environment. (Additional tools such as handsets and treadmills can intensify the experience, but these are rarely applicable in a retail environment.) A further expense is incurred from the “concierge” or guide needed to assist consumers in VR usage, as very few shoppers have ever experienced it. Because of these impediments, VR remains a rare on-site phenomenon in retail.
Lowe’s home improvement stores have created “holorooms” in 19 of their stores throughout the U.S. and Canada. These holorooms are entire lab-type open areas in which customers can put on an Oculus Rift VR headset and walk through a virtual kitchen or bathroom that they have just created with Lowe’s products.
