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GUEST COMMENT How retailers can use virtual reality to their advantage

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Virtual Reality (VR) has been exciting the retail space for several years now. There have been a variety of breakthrough campaigns and concepts that have served well to fuel the hype, but is this a short-term fad dreamt up by marketers, or can it shape online shopping in the future?

Experience first, shop later

With the boom in virtual reality experiences for smartphones, online retailers can now create unique shopping experiences – if the business goal is concentrated on enhancing the shopping experience, and not exclusively making a profit.

Topshop transported shoppers to the side of a catwalk, offering their customers an experience previously unavailable to many. Thomas Cook ran an online campaign dubbed “Try Before You Fly,” which unlocked a 360-degree inflight experience for customers. A London bar recently offered punters the chance to be transported to the Scottish Highlands as they sip an exclusive whiskey-based cocktail.

Fashionable technology is on trend

Producing 3D imagery of an online inventory is already commonplace. Cappasity, a software company that enhances the online browsing experience through interactive 3D images, reports anything from a 5 to 40% increase in conversions for ecommerce stores that offer 3D images as part of the browsing experience.

The issue here is that a 3D object is still limited when it comes to a shopping experience such as seeing how a style might suit your body shape. What’s holding this back is that creating a VR setting for one dress is achievable, but adjusting the model to fit different sizes and achieve this at scale is technologically extremely difficult. However, a virtual clothes fitting, whilst crucial, is just one aspect of in the consideration of a purchase, and shouldn’t be a barrier to online retailers looking to experiment with VR.

With ASOS’ investment in Trillenium to take a nine percent share in the company, there is a sense that market leaders are indeed taking VR as a sales channel very seriously. Whilst an investment doesn’t necessarily prove anything, in the case of the Chinese ecommerce giant Alibaba, the virtual tree is looking likely to bear some fruit for the fashion industry.

Shop virtually, anywhere in the world

From a consumer’s point of view, there might already be awareness of the brand, but the opportunity to visit somewhere like New York just not possible. Last year, Alibaba offered customers the chance to be transported to the other side of the world and shop via virtual reality at Macy’s flagship store in New York. This project opened the doors of New York’s most famous department store to thousands of Chinese shoppers.

In doing so, Alibaba may have also cracked the payment code, taking the experiential offering into the realms of sales uplift. Their system Buy+ allows users to select items and pay for them all with a few simple head gestures, creating a frictionless payment and delivery system without leaving the confines of virtual reality.

In the case of the Buy+ project, the campaign supplies rich data evidence that a global expansion of the Macy’s brand into the Far East might be a success. Virtually unknown in China, the brand has been tested without the expense of building a bricks and mortar store.

The future of customer experience

Other retail categories known for ‘trend-setting’ agendas, like furniture and home design, where virtual spaces bring customers’ imagination to life and are used in planning, are already well established players.

Ikea, which sees virtual reality as playing a major role in the future of customer experience, is already using VR to offer customers a virtual kitchen tour. And online giant Amazon is reported to be considering using VR in its new physical homewares stores to help customers visualise how furniture or appliances will look in their homes.

Virtual Reality is set to boom

Investment bank Goldman Sachs have suggested that the AR/VR market will be worth $1.6bn by 2025, and their analysts predict that by 2026, one billion people globally will be interacting with virtual reality. According to Worldpay, a third of British consumers believe that VR is the future of shopping.

With such supporting evidence, it’s clear that for retailers – both on and offline – VR could fast become commonplace as part of the shopping experience. Yet despite the hype, virtual reality as a major sales channel, both for traditional and online retailers, seems to remain a distant vision and VRs application in commerce has largely been experiential.

Cost of the hardware and the processing power needed by the computer the VR headset is tethered to is perhaps why progress has so far been slow, with experiences tied to a major offline destination.

However, low-cost cardboard VR headsets and Google’s Daydream product, which leverage the power of a smartphone to create a VR experience, are having a big impact on the mobile VR experience. Even if some critics say it’s a watered down version of VR, the mobile-ready hardware can be purchased or distributed on a scale meaning consumer adoption could come quickly.

Don’t leave your customer out in the cold

The Buy+ concept is a hugely significant first step to consumers ‘shopping’ through VR, but reports from some users suggest that as a shopping experience, it felt ‘cold’ or ‘lonely.’

Virtual reality can empower consumers to shop in virtual stores, immersing them in a brand and its culture, and, ultimately, motivate them to make a purchase. But there’s really no reason why a virtual reality shopping experience needs to mimic the real world to achieve this.

By adjusting the expectations of a virtual experience and changing the perspective of what the experience should feel and look like, the advancements in technology and frictionless payments could mean mass consumer adoption is getting closer.

Operational improvement powered by VR

The scope of VR to add value to other areas of business management are also plentiful: improved payment solutions, reductions in queuing, making category management more effective, remodelling or redesigning store layout, and A/B testing different packaging formats and assortment layouts.

But here’s where it gets interesting. By applying analytic data sets to a VR interface, managers could take a virtual tour of a store and, at the same time, observe key metrics. Surface connections between big data and the physical proximity of inventory or brand categories will become much more meaningful – observations that, without the tech, may otherwise remain abstract.

Virtual reality may be already giving marketers ideas to shake up the online commerce sector in the short-term, but despite recent progress, the tech needs to become more accessible in order to get off the ground and become truly scalable. Nevertheless, as examples of what is possible, proof of concept is already enough to convince many retailers that when it comes to sharing immersive, meaningful shopping and brand experiences with customers, VR is part of the future.

Saima Alibhai is managing principal consultant, Europe at Oracle + Bronto

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