Retail faces a new reality as AR and VR adoption swells

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Retail faces a new reality with AR and VR / Photo by Jonathan Simcoe on Unsplash

Studies into the inexorable growth, adoption and market value of VR and AR are rapidly becoming as ubiquitous as the head-scratching of marketers and retailers as to how to best utilise these new and exciting technologies.

A recent Opinium study in the US unearthed the somewhat dizzying claim that 72% of 25-34 year old consumers want to use VR/AR technology in physical stores - but the vast majority could not say why. This apparent riddle could very easily be held up as an example of the folly of the millennial and Gen Z consumer, and a blind championing of technology for technology’s own sake.

And yet, to me it succinctly highlights just how these new technologies are likely to have a massive role in the retail experience of the future – build it and they will undoubtedly come. The key question is not the ‘how’, as the gap between the current consumer niche where VR and AR currently exist and more mainstream acceptance will narrow, especially as the technologies become more embedded in streamlined wearables and integrated with increased mobile device computational power

Rather, the key question lies in the’ why’ and the ‘what’. What will these experiences look like? What is the added benefit for consumers? Why will a virtual or mixed reality brand experience challenge, enhance or even replace the retail experience of today? Why, ultimately, will it matter to consumers at all?

The answers lie partly in the ingrained behaviours of that same generation who are entering their prime spending years. Inherently social and connected, digitally fluent and technologically savvy, this is a generation that expects and demands entertainment, active participation and creativity in their brand relationships.

Dialogue and interaction with brands and their products is a given. They expect frictionless, immediate online interactions and transactions that can happen seamlessly across platforms. Use of technology is intuitive and enhances everyday life in a non-intrusive way, with the consumer themselves more in control than ever of the rules of engagement with brands.

And at the heart of understanding this generation is use of ‘big data’, drawn from a range of channels and moving beyond broad metrics into individualised and highly targeted realms of insight into preferences and behaviours. Data-driven insights can then shape highly personalised and meaningful customer experiences and ultimately drive engagement and sales.

VR and AR will be central to retailers, both for delivering these brand experiences and as an effective business tool when used to its full extent. VR can help retailers imagine, shape and design the store of the future – it will allow them to experiment with display layouts, model customer flows and visualise layouts.

The branding side is taking off. Look at the recent VR experience launched by Topshop in its flagship store that allowed consumers to ride a virtual water slide through a recognisable Oxford Street or MPC Creative’s John Lewis interactive VR installation that acted as a successful in-store extension for the festive Buster the Boxer campaign. It demonstrated vividly to us the power of this technology in delivering meaningful customer experiences that powerfully engage and can impact positively on the bottom line by driving increased spending and strong word of mouth – via social or the old-fashioned way. VR can help brands deliver on their ‘higher purpose’ missions as well – look at how shoe brand Toms created a 360 video for its ‘Virtual Giving’ trip to Peru, so demonstrating how new technologies could unite communities and bring charitable giving into the digital age.

As a Technicolor company, we’re lucky to have access to the Technicolor Entertainment Center and their research and technology for developing VR, AR and other immersive applications – dedicated to understanding and advancing this new form of storytelling. There is a clear role for fully immersive brand experiences but these work best when the focus is on meaningful and relevant content, even in the immersive world content is still king of brand engagement.

For AR however, the picture becomes infinitely sharper. AR is an overlay of the virtual onto the physical world, with the intent of creating interesting interactions between the two. It is rooted in the physical space, and for retailers this is a huge opportunity. Consumers can use the technology to view products instantly within the context of the spaces they are designed for, from seeing furniture in home, to watches on wrists. Their excitement can be instantly converted to sale and with an ‘in-situ’ test, return rates are likely to be reduced.

Customers can call up product information and comparisons on the fly, empowering them to make choices in the store or showroom. They can configure and design their own products. They can enhance their retail experience with tailored experiential enhancements, from music to gameplay and beyond. And with data-driven insights being used to shape the personalised experience in an explicit or nuanced way, their physical shopping seamlessly becomes an extension of their online one.

Physical retail still accounts for over 90% of sales today, and even with the rapid growth of online, will likely remain above 80% well into the next decade. But the purpose of stores for brands is changing beyond mere conversion to sales. They are channels for acquiring new customers, physical billboards of products and brands, fulfilment points for online transactions, places of expertise and conversation.

They offer something that doesn’t exist online: a real-life brand experience. But one which can be as personal and as involved as any individual wants it to be, in the high-tech hybrid of online and offline that bricks and mortar stores will become. AR, and to a lesser extent its fully immersive virtual cousin, provide a clear route to this enhanced shopping experience of the future. The generation who will shape the shopping experience just have not quite realised it yet.

Dan Phillips is head of digital and interactive at MPC Creative.

Dan Phillips

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