Retailers are leveraging Virtual Reality in innovative, resonant ways. Translated VR experiences may be the next frontier for global e-commerce.
We’ll soon live in a world where you’ll be able to stride into a department store, try on as many clothes as you like, never have to worry about the store having your size in stock, accessorize to your heart’s content, and make your purchase without ever pulling out your credit card—and all without ever leaving your living room.
Such virtual shopping experiences are on the horizon, thanks to ever-increasing investments in Virtual Reality (VR) platforms. Unlike innovative Augmented Reality (AR) retail technologies—in which product information is presented in real-time on a device screen, a la the wildly popularPokémon Go game on your child’s smartphone—VR delivers a far more immersive experience through VR headsets. These experiences place consumers in convincing virtual settings.
Immersive VR-powered video games and short films are scoring all the press coverage these days, but other industries have been eying this new frontier of entertainment for years, and are now developing groundbreaking retail experiences that are dazzling and delighting—and driving buying behavior—for consumers around the world.
2016: The Year of VR
We’re in the nascent days of this technology, but 2016 represented a meaningful leap forward for consumer VR. The “big three” VR platforms-Facebook-owned Oculus Rift, HTC Vive and PlayStation VR-launched this year with robust marketing pushes, which delivered high visibility in particular consumer verticals.
Of the bunch, the PlayStation VR platform offers the lowest financial barrier of entry: $399 US for the VR headset, and another $299 for a PlayStation 4 console to power it. The Oculus and HTC headset products are comparatively far pricier, and must be connected to more expensive, high-powered PCs to properly work. (To be fair, these costlier platforms deliver experiences with higher fidelity than the PlayStation product.)
These systems are finding their ways into brick-and-mortar stores, along with ambitious “demo stations” to showcase their capabilities. More than 700 Best Buy retail stores now have areas dedicated to the technology, and have provided over 300,000 demos so far this year. Sony, the manufacturer of the PlayStation VR, claims to have presented another 300,000 demos to consumers, as well.
Smartphone-based VR experiences, which have the greatest adoption rates due to their low cost, have grown exponentially in popularity over the past year.
Early Days, Intense Interest
Beyond in-home use, the future of VR is bright, if a bit hazy. In January, a Goldman Sachs reportpresented several compelling insights about the VR/AR space. For instance: at least $3.5 billion in venture capital investments were made in VR/AR during 2014 and 2015. Real estate companies like Sotheby’s are leveraging VR to showcase luxury homes, which could disrupt commissions by as much as $52 billion.
Further, the report estimated that VR/AR retail would be worth $1.6 billion by 2025, with at least 33 million users. Other key industries, such as real estate, healthcare and engineering, would be worth $2.6 billion, $5.1 billion and $4.7 billion, respectively.
That’s powerful growth for a technology still in its earliest days of adoption. VR and AR “have the potential to become the next big computing platform,” Goldman Sachs analysts wrote, “and as we saw with the PC and smartphone, we expect new markets to be created and existing markets to be disrupted.” The development of this technology may “be as game-changing as the advent of the PC,” they reported.
Consumer interest in VR shopping applications is certainly high. An Ericsson ConsumerLab report indicated that consumers are keen to see products in real sizes and forms when shopping online—something immersive VR experiences can deliver quite easily.
A recent Nielsen survey of 8,000 consumers revealed that a whopping 25% of the U.S. adult population (aged 18 to 54) will use or buy VR technology in the next year. These consumers are a retailer’s dream come true: they consume content from five more television networks than the average consumer, they spend 8% more time watching television and they spend 7% more time online.
They also adopt new products and services more quickly than average, are often brand advocates, and are willing to spend more on products than their peers.
VR’s Viability
If you follow trends in this space, you know that industry leaders are already exploring this cutting-edge frontier. These days, you can design your next kitchen using an IKEA VR experience. A handful of Lowe’s stores feature VR “Holorooms” to help customers visualize their home-improvement projects. Last year, a South Korean North Face retail location offered customers a dogsled VR experience set in the arctic, with a fast-paced real-life twist.
Even car manufacturers are launching VR experiences that put shoppers in the driver’s seat—and empower them to try out performance and interior packages—without ever climbing into a car.
The opportunity is particularly compelling for retailers, and not just brick-and-mortar businesses. Last month, the Chinese e-commerce conglomerate Alibaba showcased an ultra-ambitious VR shopping experience for its mainland China customers called Buy+. Rather than requiring consumers to use one of the pricey VR headsets, Buy+ needs only a smartphone and cardboard headset to function. (Alibaba customers can purchase a headset for about 15 cents.)
In Buy+, customers navigate aisles of virtual stores. (These stores are represented by 360° footage of real-life retail stores.) Shoppers can examine products from different angles, and even request “virtual models” to don apparel and accessories, and showcase them on a catwalk. Naturally, the platform supports the ability to purchase these products in real-time.
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Source: Motion Point