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Merchant Processing Specialists

How Virtual Reality is Changing the Face of Retail

Virtual Reality resizedIt’s no secret that one of the biggest retail trends of 2017 is vcommerce – Virtual Reality Commerce. But as the experimental technology of the last couple of years becomes more mainstream, how interwoven will ecommerce and virtual reality become?

Vcommerce is absolutely changing the “face” of retail – and not just because consumers are covering their eyes with VR goggles. The concept of a completely personalised, individually curated consumer experience showcasing products you desire, in an environment you relate to, without leaving your house is enough to whet the shopping appetite of even the most frugal consumer.

And retailers are keen to leverage the benefits of VR, with the virtual reality / augmented reality industry predicted to be worth $150 billion by 2020. Initial applications, such as the “World’s First VR Department Store” launched by Australian brand Myer in partnership with eBay have been well-received, with the cardboard “Shoptical” VR viewer providing customers with a personalised experience of relevant products curated through predictive analytics based on personal preferences and purchase history.

The 2015 Reinventing Retail report cited powerful initial interest from consumers in vcommerce, with 35% stating they would shop more online if they could try the product virtually and 63% expecting VR to impact their shopping in the future.

It is likely that vcommerce will not replace ecommerce – but rather become a complementary technology, rounding out a true omnichannel experience. The real power of vcommerce is bridging the ‘trust gap’ between consumers and online shopping experiences. While brick and mortar stores provide the benefit of tactile, personal connections, consumers may be wary of purchasing from online stores – especially internationally. Virtual reality enables the consumer to interact with the brand, ‘feel’ and ‘see’ the product in context and cultivate trust with the retailer. Vcommerce is expected to spike interest in innovative brands producing quality content, but consumers will continue to shop across devices, instore and on desktops.

Benefits of VR for Retailers

Rich customer feedback

Understanding the consumer journey, identifying blind spots in your store, monitoring hot spots for customer navigation and measuring time spent viewing (or discarding) particular products – all of this is possible via VR analytics.

Product placement and store layout are critical for any retailer – both online and offline. Accurate analysis of the way consumers shop, from navigational paths to line of sight when scanning product options, enables retailers to optimise the store design in order to boost engagement and conversions.

Market disruption

VR trials and experimental content is gaining momentum, limited quality content is currently available. And this is where brands can truly differentiate. Virtual changing rooms, VR stylists and fashion applications are gaining traction, but some markets remain ripe for disruption, such as property and automotive. Imagine virtually viewing your potential new home, rather than wasting time with open homes and realtor appointments. Or researching car options without leaving home, instead of travelling between dealerships.

Smaller, agile businesses can gain the advantage by being faster to market, more innovative in their content, and more responsive to consumer feedback than larger, more traditional brands.

Reducing friction

‘Frictionless’ transactions continue to be the goal of retailers, both on- and offline. While in-app and invisible payments continue to improve the buying experience, the potential for a truly frictionless experience via VR presents an exciting future for retail.

Eye tracking is gaining increased adoption for behavioural mapping and understanding the consumer journey. Future applications could include authentication (identifying which user is wearing the headset, then applying their personal profile – from history to preferences) and possibly even payment, through ‘Buy’ buttons the user simply looks at to instigate a sale.

The customer service experience is also ripe for change, with virtual assistants (bots) appearing to give a personalised response to purchase enquiries. No longer does the customer need to wait for an email response, or step outside the VR environment to make a phone call or queue at a customer service desk – the entire conversion journey from search to view to trial and direct enquiries can be managed within the virtual store.

 

But while the future looks bright for VR, some challenges remain. For example, while purchase timeframes are compressed with vcommerce (no wasted time travelling to the mall or navigating multiple stores), logistics are yet to catch up. So while consumer expectations continue to drive immediacy, fulfilment and delivery options are generally unable to meet this demand for many merchants.

VR will change the face of retail, but it’s still far from an everyday technology. Content creation is still in its infancy, making it costly and time-consuming to produce. VR headsets can be expensive, limiting mass acceptance. While some brick and mortar stores offer headsets instore, ecommerce merchants are relying on consumers to have their own headset, which limits user adoption.

In this initial phase, VR can be seen to complement existing commerce platforms, but it is not yet ready to ‘takeover’ from ecommerce or traditional channels. Now is the time for innovative merchants to trial and measure early applications, to leverage greater sales in the near future.

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