12 Sept 2016
Demystifying VR: The Future Of Retail Lies In Virtual Reality
News
E-commerce is a big thing and it's growing constantly. In 2016, Amazon had bigger worth than Walmart, which is unsurprising when you consider a 42 percent rise in online sales of consumer packaged goods. Goldman Sachs predict VR retail software business to be a $500 million revenue opportunity by 2020, which would skyrocket to $1.6 billion by 2025. A recent report by the company says VR is one of the technologies “retailers will have to invest in to serve their customers and keep ahead of their competition.” And even as far back as 2015, two-thirds of US internet users polled as interested in VR commerce.
Immersion is the key to the future of VR retail. While the sales might be booming, e-stores only have a conversion rate of about 2%-4%, in comparison 20%-40% of real life stores. Although the fact that it's a lot easier to just sit at your computer and browse Amazon all day rather than getting up and going places - the ecommerce also have to deal with the fact that you don't see the thing for real when you're shopping online. VR aims to remedy that. The CEO of YouVisit, creator of VR video content for Carnival and other companies, points out “Interactivity leads to immersion, and that immersion leads to conversion”. Carnival Cruises were featured in a collaborative campaign with AT&T and Samsung which saw Gear VR headsets placed in 133 stores. As for more localized use of VR, StubHub, a third party event ticket seller, used VR to show buyers the view from the seats they are reserving. You do need to have a Google Cardboard-like headset, which is great news, because Cardboard is not very hard to get. Tommy Hilfinger and Dior are using similar approach to transport their customers to runway shows. Topshop was the first one to dip the toes in this, having done a VR visit to the London Fashion Week years ago!
However, there's more to VR retail than just baiting shoppers through virtual tourism. VR is going to be used to enhance the experience of shopping itself. In a virtual store, the shoppers can learn more about how to use the product, what products can be used with it, where and how it was made, watch demonstrations and then place items in the basket. EBay and Australian retailer Meyer have already done so - however, it's more of a virtual user interface than a straight up simulation of a store. However, both the abstract and the more simulationist stores can learn more about the habits of their shoppers and adjust their strategies accordingly. The eBay stores already does so, but there's potential for physical stores, too, letting retailers trial out displays and lay outs before implementing them in the real. An another often mentioned VR retail idea is the virtual dressing room. If the shopper has a virtual body, they can try out how the clothes would look on them without going through the effort of going to the store. And as we already mentioned, the buying part of it has already been sorted out!
Shopping is not all about clothing, though, and IKEA is also hopping on the (wooden, hard to assemble) VR train. They have launched the Ikea Experience on Steam VR which lets potential buyers that just so happen to have VR headsets explore a kitchen. They can change the material finishes, open and close cupboards, go into child POW and, what's even more important, the latest update lets you play as a cat, too! Build Direct has launched their design center, which lets users visualize their bathroom area with all of the new stuff they can buy. Just input the size and the shape, and the app will show you several possible configurations, as well as letting you take a 3D sneak-peak. Audi was even more eager to join the VR-lution, with their digital showroom Audi City tracing roots back to 2012 - the customers could experience it by using Samsung VR, though there's also a version for those trapped by 2D screens. However, there's also space for augmented reality, too. Cimagine has made an app that lets people preview how furniture would look in their homes. The software is able to track position of the floors and walls, and it is able to realistically insert 3D models into augmented reality. Those images can then be shared with friends, who would then be able to place the same furniture around their house. And, of course, the potential rise of such apps is extremely interesting for modelers, since there would no furniture to place without models.
Cimagine's augmented reality app lets you easily check how a piece of furniture would look in your house (image: Cinmagine)
McDonald's is ahead of other food chains, as they had offered their own VR experience. Since you can't eat a burger in VR (and you don't want to visit restaurant bathrooms even IRL), they put a twist on the idea: people would step into a Happy Meal box and paint it from the inside! Not exactly as straightforward as trying on virtual clothing, but they had to get creative considering that food uses senses that aren't really accessible to VR. However, it's an example of one of the major dangers stalking VR retail: there's a risk that VR will be seen like just an another gimmick and nothing more. And that would be an expensive gimmick: Toms store of chains put Samsung Gear VR headsets in a 100 stores so that the shopper could see how the one-for-one campaign (customer buys a pair of shoes, the store donates a pair for children) is handing shoes in Peru. It cost $250,000 thousand to film it and they had to pay $1000 for every store that had to be outfitted with a headset (and an employee trained to use it). We are also bumping into technical limitations. The easiest one to grasp is the size of the VR install base, especially when we consider such robust systems as Oculus Rift and HTC Vive: they offer the most opportunities, but at around $800 price they're not an easy bite to swallow. And we can go even deeper: the oft-touted virtual fitting booth relies on the consumer having easy access to body scanning services. And even then, VR can't replicate the experience of trying the clothes on and it can't tell if it's comfortable or how the fabric feels like. Creative software and hardware developers will have to find a way to solve such issues.
All in all, VR seems like it can be a great tool for retail, if used right. It can increase customer engagement and increase conversion for e-commerce outlets. At the same time, it is very much hampered by the size of install base and hobbled in areas that require senses other than sight and sound. However, new and unanticipated ideas are developed each day. And with traditional retail's willingness to invest into the sphere, there is potential in VR for retail.
Take a look at other posts from our series of Demystifying VR:
Demystifying VR: Virtual Worlds, Real Friends
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