Virtual reality in the retail industry: How will VR and AR impact shopping?

virtual reality in the retail industry (2)

Virtual reality technology has the capability of recreating shopping experiences, which may rupture retail. While shoppers have moved from brick-and-mortar shops to online commerce, virtual reality in the retail industry opens a new kind of potential. Will people browse for beans in a virtual store? Is it possible to pick up a tennis racket from your home?

While there are benefits, barriers exist. While virtual reality in stores can be cool to use, their returnable benefits could be negligible. Each retail sector has its own quirks, and the application of VR, or even augmented reality (AR), should be taken on a case-by-case basis.

Browsing for goods in a virtual reality store

One of the main goals that retailers strive for is exemplary customer experience. It is good to have a shopper come, buy a product, and leave satisfied. It is even better if the customer returns again and again, loyal to the brand. Stellar services helps to retain shoppers and, ultimately, build a following that lasts several years. And one of the critical factors is frictionless transactions; how smooth and easy it is to browse and make payments.

The rise of eCommerce is linked to this trend. Why shop in retail shops when it is easier to browse online? Why leave the hope to pick up goods when they can be delivered to your door? Brick-and-mortar shops compete with nearby shops with local prices and quality; online shops compete with the rest of the world, and customers massively benefit.

This is why virtual reality in the retail industry is considered the next step in this evolution. Let’s say a customer browses for a tennis racket. Internet browsers show a product, its price, and its description. There may be reviews on it as well. Yet does it provide enough information before a purchase? Does it show its size compared to the shopper, or the vibrancy of its color?

What if, before buying the tennis racket, a user can have a go with it in a virtual tennis game? Have a virtual feel of it before ordering online? Score a few points then deciding? This is where virtual reality shopping may have a place in the retail experience.


The Rise of eCommerce

$4,600,000,000,000

The estimated value of eCommerce globally by 2022

Source: Worldpay’s Global Payments Report, 2018


Does the technology have its drawbacks?

While innovative, virtual reality in retail has its flaws. The first is that there needs to be a good reason for a product to be simulated in VR. There would be little point walking down a virtual row of canned food, and closely inspecting baked beans. In this case, the technology adds very little. It’s just a can of beans.

By comparison, a tennis racket may make more sense. A browsing shopper can select a racket, drop in a virtual arena, and test it out.

Even here, the technology has its limits. The tennis racket would not have any sense of weight, as the user would be holding a controller. The feel of the racket cannot be simulated either. It is an imperfect representation of the final product, no matter the kind of technology applied.

Over the last few decades, many types of technology are bolted onto old processes to breathe new life into them. Sometimes, technology adds very little. Virtual reality in the retail industry can be seen as superfluous, unnecessary, and expensive to invest in. Unless there is a direct benefit for the customer which is easy to access, it might as well be left behind.

Using VR in retail marketing

So what examples are there for good virtual reality in the retail industry? One exciting area is marketing. Several studies have shown that using virtual reality in marketing can boost conversion rates, as wowed customers buy the products they interacted with virtually. The approach can create tangible results. Conversion rates can spike to 6.4%, if the technology can be used correctly.

Virtual reality car showrooms provide one compelling example. Audi provides customer VR lounges where customers can wear a VR headset, and be inside a car, with all the high-texture leather and knobs included.

BMW provided the same kind of experiences. With Zerolight, they created a series of virtual reality tours using the HTC Vive, where players can sit and relax in a BMW M5 car. The experience came included with a big leather seat, for extra immersion.

Information on their usefuolness can be scarce. Conversion rates for using VR to buying a car is tricky to find, and each industry would have different KPIs for success. However, the PR value of these innovations, combined with the positive reviews by customers, inducate that the investment has value for some shoppers.

BMW and VR
Customers can browse cars before buying them in retail stores

Augmented reality in the retail industry

In essence, virtual reality has its flaws. While it can be used effectively, sometimes the use case can be limited. However, augmented reality has the power to up-end the retail industry and bring new, tangible benefits for its customers.

IKEA rolled out a new app where people can scan their room and place furniture. This works in multiple ways. Firstly, it provides a useful tool for people which aids their purchasing decision. Secondly, it does not require people to journey to their local IKEA to see new items. Finally, it lets people see what the chairs and tables look like in their room, as opposed to imagining it whilst browsing in a warehouse.

While clever, one issue is that it is impossible to know how accurate the furniture is. The app may show a chair in one color, yet in real life, it may be a different shade; not important for some, but potentially catastrophic for others. Furniture bought to fit a color scheme may look out of place, and customers realize they are inadvertently misled by the app.

Regardless, it is still one excellent example of augmented reality in retail. IKEA shows the industry that it is possible to leverage immersive technologies to provide benefits for shoppers browsing retailers. Like with virtual reality in the retail industry, augmented reality has its place.

An example of immersive technology in the retail industry.
IKEA announces the launch of IKEA Place, an augmented reality app that lets people virtually place furniture in their home.

Returnable benefits: Virtual fitting rooms

So far, the theme of virtual reality in the retail industry (as well as augmented reality) is providing a returnable benefit for customers. Investing in immersive technologies can be expensive, and if it does not lead to conversions then it is not a worthwhile investment.

This is when virtual fitting rooms come in. Fashion retailers have been battling to make their stores as easy to browse and use as online shopping, to remain competitive in the market. To do this, shops have rolled out virtual fitting rooms and solutions to show what their clothes would look like on them, without changing.

Convenience is the key word here. Flipping through shits and trousers becomes much easier if its a flick through the options, rather than changing in and out again. Studies have shown it works too, with a higher conversion rate for those who use the solutions.


Higher conversion rates

+6.4%

Rise in number of people purchasing clothes

Higher order value

+1.6%

Value of goods bought after using virtual solutions

Source: The Value of Fit Information in Online Retail: Evidence from a Randomized Field Experiment, 2018


The future of retail stores

At the core of all these discussions has been the role of retail stores in the future. From virtual fitting rooms to showrooms, retailers are doing everything they can to bring shoppers into their stores on the high street. With eCommerce sapping the customer’s attention from the streets to their websites, these initiatives are a way for the industry to adapt to new trends.

While the retail apocalypse is real, there is still a market for shoppers who want an experience. That is the future of retail, and the ultimate value of virtual reality.

Lessons can be taken from the restaurant industry. Let’s say a person has a choice between eating at home or eating at a restaurant with friends. A relaxing evening watching Netflix and a quick, cheap meal is enough for a Thursday night. For others, they want the experience of having good food in a unique location, which draws them to the location. This is the reason why many restaurants label themselves as suitable for Instagram or have interactable dinner tables.

Retailers are doing the same. Virtual reality in the retail industry is one example of shops bringing in customers, or getting their feet through the doorway. A unique experience can do wonders to get people’s attention, and customers react positively.

Some apps can be used at home, such as the IKEA app or, selecting items in a virtual store. They complement the shopping experience on top of online eCommerce. But for the brick-and-mortar places, VR helps to bring people in.

Key takeaways about virtual reality in the retail industry

Taken together, there are several key takeaways that should be remembered by retailers:

  • Virtual reality has the potential to influence purchasing decisions, yet only if there is a direct benefit for the customer.
  • Augmented reality has the potential to show the result of the purchase, such as furniture in a room. However, it needs to be as accurate as possible so it does not mislead shoppers.
  • As eCommerce grows, retailers are using innovative solutions to either influence shoppers in their home, or bring them into their shops.

VR and AR in retail has its place, and like with all things, it depends on its execution.


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Tom Ffiske

Editor, Virtual Perceptions

Tom Ffiske specialises in writing about VR, AR, and MR across the immersive reality industry. Tom is based in London.