Part
01
of two
Part
01
AR/VR Trends in the Retail Industry
Some trends relating to the use and adoption of AR and VR technology in the retail sector include the use of 5G technology, the use of AR/VR to explore products, augmented shopping, retail marketing through social media, sharing the shopping experience with family and friends, the use of VR in employee training, and designing custom goods/DIY projects. Details around each of them are given below.
1- Retailers Using 5G Augmented Reality
OVERVIEW
- With the advent of virtual and augmented reality, retail has transformed for the better. However, 5G technology will further enhance the user experience for those who are looking to try products before they buy them. 5G technology enables retailers to extend shopping experiences beyond stores.
IMPACT
- Furniture retail is one of the most-impacted sectors by this technology. IKEA, for example, the pioneer among many others, offers its customers the ability to see how their 2,000+ items will fit into their homes before they even buy them.
DRIVING FORCE
- 5G technology can accelerate the process of AR and VR adoption.
- This acceleration is the driving force behind new and increased revenue streams for all use cases, hence a source of attraction for retailers.
EXAMPLES
- 5G combined with AR can also be used to try on makeup by downloading complex Instagram filters without having to worry about connection issues.
2- Use of Augmented/Virtual Reality to Explore Products/Categories
OVERVIEW
- Augmented/virtual reality offers customers the ability to browse products at a given retail store from the comfort of their homes. Compared to a label on the shelf, AR provides a whole world of information to customers instantly.
IMPACT
- The use of AR/VR to explore products/categories is bringing convenience, not only to customers but also to retailers.
- Apart from convenience, it also reduces the time invested in searching for products by a great margin.
DRIVING FORCE
- Convenience is the key motivating factor for customers that attracts them to the use of AR by retailers.
EXAMPLES
- A wine company in Australia, Treasury Wines Estates, implemented AR to introduce AR labels through their Living Wine Labels app.
3- Augmented Shopping
OVERVIEW
- Much like the use of AR to browse products and categories, implementing AR into the shopping experience also offers customers to try different products by visualizing them before purchasing. This trend is also known as experiential shopping.
IMPACT
- From furniture retailers (e.g. IKEA and Wayfair) to makeup brands (e.g. Sephora, Cover Girl, and L'Oreal), retailers are implementing AR to enhance their shopping experience.
DRIVING FORCE
- Paul Lee, head of telecomms, media and, technology research at Deloitte, thinks laziness is the key driving force behind the trending AR technology in shopping experiences. He said, "People are lazy, they like immediacy, so if you can deliver an immediate experience that's better than one which has a lag to it, you'll have an advantage."
EXAMPLES
- IKEA and Wayfair let consumers place and manipulate items from their catalog in their own homes and see for themselves how they look.
- "Magic mirrors" from Sephora offer customers the ability to virtually try on makeup and see how they look.
4- Retail Marketing Through Social Media
OVERVIEW
- Not only sales but also marketing in the retail sector has also seen the innovative use of AR/VR to their advantage. Brands are now creating AR-based social media marketing campaigns to catch their audience's attention.
IMPACT
- Brands and retailers are creating marketing campaigns that are not easy to replicate and at the same time generate high engagement from their target audience.
DRIVING FORCE
- Content on social media is highly shareable and drives engagement for the brand. It also allows the campaigns to be spread through word-of-mouth marketing and user-generated content. These features are highly attractive and lucrative to brands and retailers.
EXAMPLES
- Foot Locker, a sportswear brand, created "a scavenger hunt in Los Angeles, which led sneakerheads to a location where they could purchase an early, limited-edition drop of the LeBron 16 King Court Purple court shoes." All of the shoes were sold within 2 hours.
5- Sharing the Shopping Experience
OVERVIEW
- AR and VR will offer the ability to share virtual experiences with family and friends through social media. This will allow multiple shoppers to be present in a virtual store simultaneously, even if they are sitting at their homes at a distance.
IMPACT
- Although this technology has not widely been adopted yet, it has the ability to transform the shopping experience and allow individuals to adopt virtual co-shopping as a potential pastime.
DRIVING FORCE
- This technology will address the loneliness factor of being alone in a virtual store and not being able to show and elicit a second opinion on what to buy among multiple choices.
EXAMPLES
- L'Oreal's Armani Beauty incorporated AR into their WeChat application.
- L'Oreal's ModiFace adopted AR technology that enables customers in China to try on makeup products from Armani Beauty using their mobile phones and then share snaps through social media.
6- VR for Employee Training
OVERVIEW
- The use of VR for training employees is making waves in the retail industry. VR can be used for sales training and testing employees in a given situation and stress testing potential candidates.
IMPACT
- Retail giants like Walmart have taken up this opportunity and many more are following suit.
DRIVING FORCE
- Retailers with millions of employees have to make sure that new employees are job-ready and that they are aware of what to do when faced with real-world situations. VR training offers them the ability to train them using real-world situations and make them ready from day 1.
EXAMPLES
- Walmart distributed 17,000 Oculus headsets to their stores and learning centers to train new employees.
- KFC uses VR to train employees through their training simulator. Using the simulator, employees have to prepare chicken "the KFC way".
7- Designing Custom Goods/Do-It-Yourself
OVERVIEW
- One of the best things that AR/VR technology has offered to customers and retailers have taken note of is the ability to design custom goods. Retailers have designed software through which customers can design their desired products themselves.
IMPACT
- This technology has given the shopping experience a new dimension and customers can be designers of the products they want to purchase.
DRIVING FORCE
- Creating a custom order was a time-consuming undertaking and even then the final product was not guaranteed to be how the customer wanted it to be. AR and VR can now finally overcome these hurdles.
EXAMPLES
- "Nike’s Makers’ Experience combines AR, object tracking and projection technology (using AI and IoT) as well as digital signage or videowalls to enable a customized design to appear on sneakers. An hour later the customer can pick up the finished product."
- DecorMatters allows customers to start from scratch and create Do-It-Yourself furniture design projects by leveraging existing designs from Instagram, Houzz, and Pinterest.
Research Strategy
To identify trends in the retail sector relating to the use and adoption of AR and VR, we scoured through industry publications, research reports, news and media articles, and technology providers' reports and identified several trends. We focused on identifying trends that have been used widely in the industry and not just by a couple of anonymous users/companies. We identified trends by going through the sources and locating issues that appeared repeatedly through a number of different sources. We relied only on credible industry/news/media sources for our research.