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Where Are You on Retail’s Virtual Continuum?

What would a retail experience look like three years from now?  What if you could browse a store while sitting in the store?  Let’s suppose an associate hands you virtual reality glasses as you enter the store.  You are guided to a private viewing room complete with snacks and beverages. 

You relax in the viewing room as you leisurely walk through the virtual store, selecting items of interest.  The clothing items are delivered to the viewing room, which you use as a fitting room.  You have toured the store and selected items to try on without leaving the comfort of a viewing room. 

No dodging other shoppers.  No waiting for someone to move to look at merchandise.  No listening to conversations not meant to be overheard.  Suddenly shopping is an enjoyable experience.

Does this scenario sound too much like science fiction?  It shouldn’t.  The technology is available.  It’s a question of how to implement it and when.  Before making a decision, let’s look at what technologies are available on the virtual continuum.

Augmented Reality

Augmented reality (AR) is computer-generated content overlaid on a real-world environment.  One of the simplest examples of augmented reality appears on TV-broadcasted sports.  When the flight of a golf ball is drawn on a TV showing the physical golf course, that’s an example of AR.  A computer-generated line is placed on top of the real-world image.

Virtual Reality

Virtual reality (VR) refers to a computer-generated simulation in which a person interacts in an artificial three-dimensional environment using special electronic devices.  These devices may be special goggles with a screen or gloves fitted with sensors.   A typical example of virtual reality is the 3D glasses used to watch a movie.  Using the 3D glasses, you feel as though you are in the film because VR creates an illusory environment by presenting our senses with artificial information.

How Are AR and VR Being Used?

Companies have explored solutions along the virtual continuum from augmented reality through mixed reality to virtual reality for years.  Some deployments were successful, while others only enjoyed limited success.  

Lowe’s

This home improvement retailer has its own technology lab for developing solutions to improve the customer’s experience.  Lowe’s Innovation Lab is busy creating augmented, mixed, and virtual reality tools to make home improvement projects less intimidating.

  • Through high fidelity 3D models, Lowe’s lets customers view and experience products in their homes.  This experience enables interactions that help customers visualize their dream projects.
  • View in Your Space is a mobile app that allows customers to see a product in their homes.  It relies on an extensive library of true-to-life 3D models to let customers experience the potential results of home improvement projects.
  • Lowe’s Innovation Labs recently partnered with Microsoft to test a hologram solution.  The Hologram Experience has customers collaborate with a HoloLens specialist, who helps them plan their kitchen renovation.  The virtual solution creates an interactive, mixed-reality environment.

Lowe’s plans to continue to develop solutions to make the customer experience more appealing and productive using the virtual continuum.

Alibaba

Asia’s biggest e-commerce company developed a Buy+ technology.  It tried to blend online and offline shopping into a virtual mall.  Customers browse 3D images and make real-time payment through the virtual reality solution.  Alibaba’s solution required a simple cardboard VR headset and a smartphone, making the hardware cost much lower than other solutions.  Purchasing headsets, goggles, or other devices to use a VR solution is a primary obstacle to customer acceptance.

About 8 million people tried Buy+ in the first ten days after its launch, according to Alibaba. Most users were tech-fluent Chinese millennials. Not all users were excited with the experience.  Some customers said it was a lonely experience, according to the tech website Vice News. The artificial environment didn’t create the same feeling of a mall environment that in-store shoppers like.  It also failed to provide a smooth check-out experience of e-commerce sites.

Alibaba has recently joined forces with an Israeli technology company to explore other avenues along the virtual continuum.

IKEA

IKEA has brought VR to its customers.  Customers can walk through a real size, make-believe 3D kitchen.  Customers are given two wands to navigate through the kitchen.  They use wands to interact with objects in the kitchen.  Tap one wand to change the color of the cabinets or drawers.  Tap another to look at different cabinet hardware.  What would your kitchen look like if you had no limits?

Are Consumers Accepting AR and VR?

Consumers’ willingness to accept solutions along the virtual continuum depends on the industry and the solution.  As Alibaba learned, it is hard to replicate the nuances of in-store shopping.  Although VR shopping can attract traffic, only a small percentage turned into a real purchase for Alibaba.  At the same time, a recent study showed that

  • 71% of shoppers would shop with a retailer more often if it had AR
  • 61% of shoppers prefer retailers with AR over those that don’t
  • 55% think shopping with AR is fun68% would spend more time in a store with AR
  • 71% would return more often to a store with AR
  • 40% would pay more for a product they experience through AR
  • 72% have made impulse purchases because of AR

Based on this study, consumers are ready to engage with solutions along the virtual continuum; however, the solutions must provide some value to the consumer if the experience is going to convert into a purchase.  In some instances, in-store merchants may have an advantage when it comes to augmented and mixed reality tools. 

What is essential is to determine the best use of virtual technology for your industry and your customers.  If you don’t use the technology wisely, it will be a costly novelty that does not convert into sales.  If you need help finding the right solution, contact us.

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By Georg Tichy

Georg Tichy is a management consultant in Europe, focusing on top-management consultancy, projectmanagement, corporate reporting and fundingsupport. Dr. Georg Tichy is also trainer, lecturer at university and advisor on current economic issues.

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