Augmented Reality (AR) and Virtual Reality (VR) are on the Verge of Breaking into the Mainstream – and retailers can ignore these technologies no longer. So what exactly are they, what do they offer and how can retailers make them work?
AR refers to Augmented reality, which is technology that augments vision or a camera’s vision with computer-generated graphics. Devices that offer AR are either glasses-based headsets that people look through or a smartphone’s camera. The viewer’s surroundings then become augmented with additional information. For example, a roofing contractor could put on a headset to have the dimensions of a roof overlaid onto his or her field of vision.
A doctor could wear one while performing a surgery to see extended anatomy information pop up in real time. AR is increasingly being used in construction, medical, industrial manufacturing and other high-tech fields to help highly skilled workers do their jobs better. It’s also used today by millions of people to augment Snapchat, Instagram, and Facebook photos in real-time.
Commercial AR headsets include Microsoft’s HoloLens ($3,000) and Magic Leap’s Magic Leap One ($2,300). Good virtual reality seamlessly blends the digital with the physical worlds in a way that can make it difficult to tell what’s real and what’s not. An application could put a digital replica of a physical picture frame a wall, and viewers might not be able to tell that it’s a digitally generated picture frame at first glance. AR headsets will become mainstream products once the price comes down and the headsets become less bulky.
Today’s smartphones and tablets all support various forms of AR through their smartphone cameras. Pokémon GO, released in 2016, was the first major commercial success of AR. Since then, all of the social media platforms for sharing photos have fully incorporated AR. Many of the furniture companies have built applications that enable placement of specific furniture items in rooms.
VR refers to Virtualreality, which is technology that puts the user into an entirely different world. VR headsets completely block the field of vision and construct a new reality by changing the entire field of vision. Users might be sitting on the couch, but the VR headset has transported them to an experience where they are enjoying a roller coaster ride or sitting on a bench next to the Eiffel Tower. What users see changes based on where they look, just like in real life. If look up toward the sky, they’ll see the sky.
VR headsets are substantially less expensive than AR headsets. Oculus’s entry-level Go headset costs $200. Its high-end Rift headset costs $400. Google’s Daydream headset is only $100. At one-tenth of the price of comparable AR headsets, VR is substantially more popular than AR.
Today, these headsets are primarily used to watch concerts, sporting events, movies and other media. Netflix and Hulu are both supported, for example.
Facebook bought Oculus for $2 billion in 2014 with the goal of one day owning the virtual worlds where people will spend time with each other. Imagine friends putting on their Oculus headsets and hanging out with each other on a beach for the afternoon, all while sitting in their respective houses. With avatars getting more and more human-like, VR will soon deliver multiple “worlds,” similar to how the internet is a parallel world today. Long-term, it’s not hard to imagine office workers from all over the world going to the same physical “office” for the day and then going back into the real world by removing their headsets at the end of the work day. Or, students may take part in a class through VR. Anything is possible.
AR and VR offers entirely new possibilities for brands and retailers to engage with their customers, the possibilities of which are constrained only by imagination. Let’s explore a few.
Unless brands and retailers are competing purely on price or convenience, their customers are buying an experience just as much as they’re buying physical products. Elements of an experience include a physically beautiful shopping space (physical or digital), an appeal to customer values, entertainment, and so on. All of those elements of an experience can be replicated or even enhanced in a VR experience. Imagine having an artist design a virtual store and having millions of customers spend time in there because it’s so beautiful. Imagine going on a virtual test drive of a Tesla with a virtual avatar of Elon Musk as part of the sales journey. Imagine learning about environmental activism from the founder and CEO of Patagonia. During this experience, the user could buy products or services.
Many times, customers have a shopping need, but don’t know what they want. For example, the shopper’s distant cousin may be having a big 40thbirthday party, but she doesn’t know what to give her. That problem could be easily solved if she were able to go into a virtual store and have a chat with an associate (either backed by human or artificial intelligence), all without leaving the couch. Or, a shopper looking for a new light fixture could peruse hundreds of fixtures all in the same virtual store. These experiences are more VR-focused, though many of them could easily translate to AR when technology catches up.
AR’s most natural fit is for learning more about products in physical stores. Customers could pull out their smartphones or don a VR headset and look at a rack of shoes to see a ranking of how they would best fit their individual feet. A video could play next to a watch showing how it was made. Ratings and reviews of a TV could pop up in real-time. And for many customers, it’s not enough to see the packaging of a product. Instead, they want to go a few levels deeper. AR is the perfect way to do that.
Finally, support is a natural use case for both AR and VR. Immersive videos could demonstrate how to lay brick on a pathway or install a security camera. In the very distant future, a digital AR avatar could come into people’s homes to show them how to use a product or troubleshoot a problem.
Like all technology, AR and VR are being adopted according to the famous Gartner Hype Cycle. Technology is first seen as a cure-all to what ills the world. From curing cancer to fixing political gridlock, the benefits of any new technology are over-promised in the “Peak of Inflated Expectations” phase. After a sufficient period of over-hyping, there’s the inevitable “Trough of Disillusionment” whereby people sour on a technology. Long-term, innovations usually end up on the “Slope of Enlightenment” which is an extended period of improving technology, lower costs, and more development of a supporting ecosystem.
AR and VR are in the “Trough of Disillusionment” right now. They were both hyped for so many years, but that hype happened in a vacuum – removed from what was actually possible with technology. Now, technology is finally catching up. Google, Microsoft, Facebook (Oculus), Amazon and the other big consumer tech vendors are all making substantial investments in the underpinning of the upcoming generation of AR and VR products that are hitting the market. As a result, now is the time for brands and retailers to make similar investments to have a first movers’ advantage when AR and VR become mainstream.