Through the Looking Glass – a VR/AR Wonderland for Retail?

The concept of virtual reality (VR) as a serious commercial concept has been brewing for well over a decade, with the technology regularly heralded as the next big step in gaming, entertainment, and design. In this piece for RetailTechNews, John Gillan, MD, Northern Europe, Criteo, explains that VR and augmented reality (AR) look set to change the shopping experience for consumers and retailers alike.

Unlinke VR, AR has benefited significantly from the ubiquity and advancement of smartphone technology. The much-hyped launch of Pokémon Go in 2016 had retailers quick to jump on the AR bandwagon, building the real-world game into their campaigns. With AR readily accessible to any consumer with a smartphone, it represents a much more viable option for retailers to offer a full convergence of online/offline. For example, downloading an app to overlay images on the real world holds a much lower barrier to entry than shoppers investing in a VR headset.

As shopping trends continue to evolve, and the retail environment becomes more competitive than ever, finding new ways to engage with shoppers has become key. Today, mobile retailing has hit a certain level of maturity, accounting for almost half of all online transactions in Europe in 2017, and many retailers are considering AR and VR as their next big move.

While we’re seeing the beginning of AR and VR adoption, there’s still not a definitive picture of how it will be used across the retail sector. Will it be in-store VR, engaging shoppers through experiential marketing and brand content? Or will it be out-of-store, allowing shoppers to get to grips (at least virtually) with products? Retailers have been exploring both options already. Ikea’s Place app allows smartphone users to envision what their home might look like with a new sofa; while Alibaba recently installed AR fashion mirrors in shopping centres during its Singles Day event. Both offer glimpses into the future of retail.

John Gillan, MD, Northern Europe, Criteo

A look at wider-scale adoption requires a closer examination of the ways shoppers are currently blending their online and offline activities.

Webrooming (browsing products online before buying in-store) has grown in popularity, with studies from 2016 estimating that 82% of consumers engage in the practice. AR, in particular, represents an excellent opportunity to enhance this omnichannel approach to shopping. Enabling retailers to offer more immersive smartphone experiences, the use of AR pre-sale should allow customers to go one step beyond browsing and actually experience the look of a product they’re considering in situ. AR fashion mirrors, homeware previews, and user demonstrations all represent more immersive ways of building on how people are already shopping.

AR and VR can also be used to foster a ‘click-and-mortar’ approach. L’Oreal’s AR Makeup Genius app is a great example of this. Offered in-store by beauty counter assistants, it allows users to preview what different cosmetics might look like. With purchasing cosmetics being notoriously difficult online, given the specifics of shades, this app provided a solution to meet that challenge, while also marrying online and offline shopping worlds.

The overarching challenge for retailers looking to use AR and VR will be managing yet another sales channel and all the requisite data that comes along with it. They potentially serve as fantastic discovery and engagement tools, but driving results and conversions is where retailers have to focus their attentions. Using an AR app to suggest new clothing choices is a great gimmick, but if you’re not supplementing it with data to provide suitable recommendations based on shoppers’ preferences, then that’s all it will remain.

This is particularly relevant for an in-store environment. Retailers are still working on marrying together the offline and online shopper experience, and a recent study by IMRG and Criteo revealed that half of UK shoppers are receiving an inconsistent retail experience. An in-store VR or AR experience means little unless that shopper is encouraged to go away and continue to engage with your brand.

That’s not to say that retailers should hold back from AR and VR. Finding ways to use AR and VR to both capture new data and personalise the shopping experience is vital to moving them beyond a point of interest towards a cost-effective platform that supports the entire retailing ecosystem. There’s a whirlwind of hype that surrounds them – and for good reason. The potential benefits to the user experience are huge, and fit in neatly with modern shopping habits. The next step is for retailers to identify where these new channels will fit into their bigger business strategy.