Virtual Reality in Retail: What it is and Why it Matters

Virtual reality

What is virtual reality? 

Virtual reality is when computer technology generates a three-dimensional environment that can be explored and interacted with by a person using a device. It can stimulate vision, hearing, touch and smell that collectively immerses a person into entirely new surroundings at the creative control of the developers.  

Virtual reality vs augmented reality, what’s the difference? 

While virtual reality technology invites a person into a fully immersive experience, augmented reality offers a step into a semi-immersive environment. AR technology still uses computer technology, but instead projects it onto the real world, instead of a simulated world.  

Currently, AR technology is also more accessible than VR, with users able to access such technology using smartphones, tablets and AR glasses.  

You can read more about augmented reality in retail in our article here.

What does virtual reality in retail look like? 

The application of virtual reality technology is being researched across a number of sectors including entertainment, advertising, product design and display, the construction sector and tourism. Yet, one of the most prominent sectors is in fact shopping and retail 

Many retail giants are researching and deploying virtual reality technology to replicate shopping environments. Amazon, Alibaba, eBay and IKEA are all using VR platforms to disrupt the eCommerce and shopping ecosystem. 

Virtual reality technology can be implemented using head-mounted displays, haptic devices, body-tracking sensors, motion controls, 360-treadmills and other wearables. Such technology is allowing companies to infinitely close the gap between what’s real and what’s made up.  

How virtual reality can be used in retail

The benefits of virtual reality in retail 

Virtual reality retail examples home improvement
Virtual reality retail examples automotive
Virtual reality retail examples eCommerce

1. Shoppers demand more social engagement in VR 

According to a recent survey, over three-quarters of users expressed that there needs to be more social engagement in VR technology. This was commonly agreed among Generation Z and Millennials, suggesting there is an opportunity to create social shopping experiences to increase engagement among younger generations.

2. Increase customer engagement with new and existing customers 

Retailers that use virtual reality invite shoppers to try on items, view storefronts and engage with products from the comfort of their own homes. VR technology can capture fresh demand and keep existing customers engaged through delivering unique experiences compared to their competitors.  

Virtual samplings have since increased by 32% since the start of the pandemic. And with further investment being made into VR technology, this number is expected to rise.

3. Personalise each VR shopping experience 

Across home improvement, automotive, fashion and more, VR can personalise each experience according to the customer needs and preferences. While VR can replicate physical environments from an eCommerce setting, not even a brick-and-mortar store can morph into different layouts according to which customer walks in. 

This gives a new level of creativity and personalisation freedom both to the store and shopper. By personalising the experience, customers are 3x more likely to buy and will spend around 10% more.  

4. Uplift your brick-and-mortar stores 

Virtual and augmented technologies can influence the trajectory brick-and-mortar stores are facing. With decreased footfall, changing consumer habits and the need to shop online, physical retailers are finding ideas outside of shopping to bring customers in. 

With many factors deterring shoppers from going to the high-street (long changing room queues, inadequate shopping experience, not enough product selection), VR and AR technology can offer an easier way to navigate customers through its merchandise. 

From AR routing and AR-overlaid product information to Kinect fitting rooms, new technologies can introduce exciting new experiences to make shopping in-store unique and memorable.

5. VR headsets are becoming more accessible and affordable 

Experts predict that by 2025, 500 million VR headsets will be sold. Additionally, 41% of adults will say yes to a VR headset whenever they are given an opportunity to do so.  

And with retail expected to deliver the biggest commercial investment in AR/VR technology by 2024, ($7.3 billion) it is a perfect time to capture the increased demand in VR headsets along with the continued investment in VR technology.  

6. It increases conversion rates and average order value 

By introducing virtual changing rooms, it can help retailers increase conversion rates by more than 6.4%, average order value by 1.6%, reduce fulfilment costs by 5% and lower returns by 5.2%.

7. Overcome the frictions of shopping in person 

Take the automotive industry. 10 years ago, the average car buyer would visit 5 dealerships, now it sits at 1.6, according to a McKinsey study. It can be a tiresome journey, with many buyers driving across counties to view their desired model.  

However, due to its complexity, car buyers still need to talk with a knowledgeable salesperson to guide them through all the features and models.  

VR technology can close this gap between physical and virtual by introducing virtual showrooms that can be explored from home. By leveraging a human to educate them on cars, the car buyer does not have to sacrifice a personal service over the unwillingness to visit a physical showroom.  

Virtual reality in retail examples

1. Nike 

Nike combines AR and VR technologies in their physical stores. They invite customers to scan products using their mobile phones to view additional product information. Nike has also entered into the VR world so customers can experience Nike’s supply chain, so they gain a better understanding of how and where items are made. This evokes an emotional connection to the brand, which more customers are seeking, especially if products are ethically sourced and manufactured.  

2. Lowe’s  

A home improvement goods retailer based in North America introduced a safe learning environment for its customers. By using an HTC Vive and a specially made controller, inexperienced power tool users can practice how to use such equipment in a safe virtual space. 

3. IKEA 

Not VR, but this demonstrates the power of AR technology. Ikea developed the IKEA place ARKIT app, which allows users a 3D preview of selected furniture that they can superimpose onto their surrounding environments. They can adjust the position and see how it feels for size. This overcomes the hassle of returning goods for ill-fitting furniture and can decide if that bedside table really does suit the aesthetics of the room.  

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