What VR and AR will mean for the retail industry in 2018

Currently employed by select brands and retailers, virtual reality and augmented reality will continue to grow as consumers request more personalized experiences.

It’s no secret I’m an industry news enthusiast. Most days my desk is full of the current trade magazines as well as a stack of print outs containing articles I find insightful. Specifically, I’m always intrigued by the latest technology being introduced to enhance a shopper’s path-to-purchase.

VR-handheld.jpgWhile not new concepts, more and more I’ve noticed a greater conversation surrounding the roles of virtual reality and augmented reality in the brick and mortar environment. In a market where brands and retailers are continually striving to utilize new tools to earn a customer, VR and AR feel like exciting concepts still shrouded with a bit of mystery. A challenge for the retail industry in 2018 will be discovering the most practical use for the two technologies and nailing them down to strengthen the shopper experience.

To understand the impact VR and AR could have on retail and the point-of-purchase market, we must first be clear on the definitions of the two.

Wikipedia.org defines virtual reality as “a computer-generated scenario that simulates a realistic experience.” Using headsets or multi-projected environments, users are present in imaginary environments and can look and move around as well as interact with virtual features.

Once associated almost exclusively with video games thanks to the industry’s early adoption of the technology, virtual reality has come a long way since the late 90s and has branched into hundreds of markets from healthcare to educational training.

And while bulky VR equipment has created limitations on usefulness in the past, today VR runs on smaller and more powerful hardware with the same or better experience and results.

Similar to virtual reality, augmented reality also generates sound, video and graphics, but blends the person’s current reality with virtual elements shown in the physical world. Often, augmented reality requires less equipment than VR – customers can experience simulated sounds and visuals with easily accessible hardware such as a tablet or smartphone. 

Snapchat is likely the most relatable example of employing augmented reality. Grab any Gen Z’er and he or she will likely be well-versed on which daily filters show Bitmojis dancing across the screen in your current environment.

While Snapchat shows the fun side of the technology, companies recognize the fact that consumers are gravitating to retailers that create exciting, informative, and personalized experiences in store using the practical applications of AR. 

Currently, select brands and retailers are leveraging both VR and AR technology to enrich in-store shopping trips. Audi and Sephora are good examples.

Luxury car brand Audi recently began rolling out its Audi VR experience to various markets.  An August 2017 press release states, “With the VR headset, prospective buyers can configure their individual dream car and explore even the smallest details from an extremely realistic perspective, selecting from several hundred million possible models and equipment variants.”

Not only does this technology create a hyper-personalized experience for a potential consumer, but it allows Audi to show off premium features or new models that haven’t reached the showroom floor yet, and gain consumer input on design ideas.

With a higher price tag along with cumbersome external hardware, VR is still in the infant stages of offering a truly immersive retail experience outside of a few specified situations. As these pain points are addressed, however, I see the technology shedding many of the restrictions and finding pathways into future in-store environments.

On the other hand, AR is the product for retail today. The novelty, cost and interactivity all make it appealing for businesses to offer to consumers.

Major retailers like Target, IKEA, Lowes and Starbucks all employ AR in several ways, but a shining example of a retailer who has embraced the technology is Sephora.

The Sephora Virtual Artist program is offered on the store’s mobile app and in-store kiosks, and was described in a recent article by TechRepublic as “an AR tool that allows customers to try on thousands of shades of lipstick, eyeshadow, false lashes, and many other makeup products sold at Sephora.” The program even boasts beauty tutorials to teach patrons how to achieve specific looks.

Instead of hunting for just the right color by sampling countless makeup testers, customers save time and energy experimenting on a screen with a touch of a finger. It’s a perfect example of why technologies like AR are important for brands to provide those personalized and seamless experiences for customers.

With all this talk about how tools like VR and AR can be used to benefit customers, it’s important to ask how these programs can benefit the path-to-purchase industry behind the scenes.

Recently, I sat down with John Hennessy, Chief Revenue Officer of the Virtual Reality practice at Kantar Consulting, to hear how his company brings displays to life using virtual reality.

The company allows brands and retailers to use their library of over 150 virtual store, home and out of home environments to configure and experiment with displays in those virtual environments. Using virtual environments and virtual displays keeps the design process more cost-effective and efficient than producing expensive prototypes. 

“It’s always a challenge to keep up with changing shopper preferences,” Hennessy states. “A lot of expense and time goes into physical changes. By showcasing merchandising display options in a virtual store environment using virtual reality, we can make changes and test different scenarios that would have been cost-prohibitive to do in an actual store or with an actual sample display model.”

Once a layout is decided on, the design has another benefit. Hennessy explains, “Now that the virtual display is set up in a virtual store environment, retailers can share interactive, 3D images with store employees who are setting up the merchandise. Having an interactive 3D image of the display is an effective way to ensure the original vision is being implemented in the store.”

As 2018 kicks into full gear, I look forward to hearing how brands and retailers continue to use technology like virtual reality and augmented reality to improve their customers’ experiences as well as support their own goals to efficiently create impactful displays that delight shoppers.

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