China's retailers lead in augmented and virtual reality but the rest of the world follows closely
Adoption of Virtual Reality (VR) and Augmented Reality (AR) technologies has been intensifying in recent years – no longer only used in video games, the technology is now gradually being applied to our daily life.
VR and AR can bring a brand new interactive shopping, education or brand engagement experience to consumers in industries such as retail, travel, education, and even medical. According to new research from Worldpay, a full 95% of survey respondents in China said they’ve used VR or AR technology in the past three months – indicating a growing consumer demand for the technology in Asia. In China 84% of respondents said they believed VR/AR is the future of shopping, whilst more than half of Australians surveyed believe VR and AR may become as popular as smartphones. Even two thirds (66%) of Japanese consumers surveyed said would like to see more physical stores using VR and AR – which shows there is an enormous amount of potential in this emerging technology.
Compared to the rough simulation environments of the past, current VR technology has been able to present a vivid and engaging three-dimensional image so vividly, that it gives the consumer a dynamic user experience. Moreover, the applications which are leading VR technology have expanded from the video-game and entertainment level to other areas. Retail is one of the industries that is proactively exploring and applying VR and AR technology to both shopping and brand engagement experiences.
Enhancing the shopping experience
Presumably to combat the ease of online shopping, shopping malls and brick-and-mortar retailers have started actively introducing interactive experience devices to enhance the shopping experience. This has included applying VR and AR technology, as well as Artificial Intelligence (AI) to present products in an efficient and interactive way. For instance, clothing boutiques can apply AR and VR technology when consumers want to try clothes on. Without queuing for fitting room, they can simply stand in front of a screen disguised as a dressing mirror, which will then collect physical dimensional information automatically and ‘put’ the selected clothes on the consumer. The whole process brings consumers a brand new shopping experience in a novel, yet relaxing and simple way.
We’ve already seen examples of how VR technology can enhance the shopping experience in Asia Pacific. On Single’s Day 2016, China’s Alibaba showcased its Buy+ virtual shopping technology, which let shoppers use a VR headset to browse products and watch virtual models on a catwalk. Alibaba has also said that it is working to create an augmented reality game, in the style of Pokémon Go, which would encourage online shoppers to visit offline locations. Meanwhile, in Australia, eBay partnered with local retailer Myer in 2016 to launch what it termed the “world’s first virtual reality department store” – allowing shoppers to put on a VR headset and enter a virtual store to browse thousands of products.
Additionally, VR technology is allowing real estate developers and interior designers to create virtual dimensional models of new properties to help consumers decide on their big ticket purchase. Buyers can immediately see the style, layout, and interior design of each room, and even display furniture in each room, just by wearing a VR device. VR, AR and other new technologies are helping retailers to consider how they might break from past business models and concepts and communicate with potential customers in brand new ways. Consumers’ realities are now similar to scenes that were previously only possible in sci-fi movies.
China leads the way in adoption of VR technology
China is blazing the trail as the global leader in VR and AR technology currently. Based on the new research from Worldpay, nearly 100% of Chinese consumers surveyed say they’ve tried AR or VR technology at least once, and more than half use these technologies at least once per week.
Outside of China, however, interest in VR technology is growing more slowly. In Australia, for example, less than a quarter of survey respondents (22%) say they’ve used VR technology at some point, and a mere 14% describe themselves as early adopters. It’s a similar situation in Japan, where only 19% have tried VR technology – the least of any market surveyed by Worldpay.
At the same time, Worldpay’s research does indicate that APAC consumers are slowly but surely beginning to follow China’s lead. Sixty-one percent of Australian survey respondents think VR and AR could someday change the way we shop; and in Japan, 70% of consumers say they would like to see VR and AR technology used in retail apps.
Payment systems in line with VR/AR development
As VR/AR stands ready to change the way we shop, various players in the retail space are investigating what the future of payments might look like. In May 2017, Google announced that its voice assistant programme Google Assistant can now help users make payments through third-party apps or send money to their friends. Hands-free, voice-activated payments have the potential to enable a new mode of VR shopping, in which the customer is fully immersed within a brand’s virtual world and can make a purchase without entering any credit card or personal details, or even needing to physically click a “make payment” button.
Researchers at Worldpay are also investigating how shoppers can pay using a credit or debit card while remaining immersed within a virtual environment. We’ve created a proof of concept that provides virtual shoppers with the same levels of convenience and security they expect when paying in-store or online. With the right payment experience – one that is easy to use and secure to its core – shoppers will get a compelling, immersive and seamless VR experience; and merchants will have more chances to increase customer loyalty and bring in sales.
Phil Pomford is general manager for Asia Pacific, global ecommerce at Worldpay.