The Role of AR/VR in Retail: Creating Immersive Shopping Experiences and Boosting Sales
TABLE OF CONTENT
- Enhancing the shopping experience with AR/VR
- The power to uniquely interact with products
- The power of AR/VR to provide personalized recommendations
- Increasing Sales and ROI through AR/VR
- Tackling the product returns challenges
- Using data from AR/VR initiatives to power your business:
- The Future of AR/VR in Retail
Retail is changing quickly with e-commerce, which has changed how consumers purchase from businesses to D2C (direct-to-customer) businesses. Enterprises are leveraging the increase in online shopping and the availability of logistics partners to deliver these products to the consumer’s homes directly.
Along with those, how we showcase our retail products is also changing. We have moved from posters to mannequins to videos to finally augmented reality and virtual reality-based experiences for improving shopping experience and boosting sales.
Enhancing the shopping experience with AR/VR
We have become more comfortable buying many products from the comfort of our homes. However, when it comes to products like clothing or related accessories, we still need to be 100% comfortable buying them online.
The big question that lingers in the minds of the buyer is the question of size and fit. Will this fit me well? Or will this look good on me? This question also results in a lot of money spent by eCommerce and D2C companies managing returns and product exchanges.
All of this can be solved with simple AR or VR-based solutions. Imagine having the ability to virtually place a top on yourself and look at yourself in a virtual (VR) or real (AR) mirror not just to see how it might look on you but also to see how this top would work with the skirt and shoes that you already have with you.
Even in retail stores, trial rooms are mostly full, and customers cannot try on most accessories at retail stores. That’s why an AR/VR-based virtual try-on can help retail customers try these clothes and accessories more peacefully and see how they might look.
Bonus: It’s also a fun social media sharing activity if people can try on various clothes by standing in front of these virtual try-on mirrors.
Businesses already implement this AR mirror concept in retail stores to attract customers. Brands like Valentino have partnered with AR-based apps to let users try their clothes in the comfort of their homes.
Similarly, VR platforms are being leveraged by businesses like Puma, Nike, Adidas and even Walmart to create unique ways for customers to engage with the brand and its products.
The power to uniquely interact with products
Some products, like clothes, are relatively simple, and an AR or VR tool can easily overlay the product on an individual’s picture or avatar. That should be enough to decide for the buyer. But other relatively complicated products need a bit of interaction to understand if they are a good fit for you as a customer.
Think of products like cars or even properties. These are products that, ideally, a consumer wants to walk around, open the doors to, sit down and see how they look (we still have some time to experience the feel of sitting in a car or house). Based on these, the customer is likely to make a better decision if they are interested in purchasing this product or not.
Similarly, large-scale industrial products like engines, turbines or other factory equipment also require a fair understanding of the construction process and how the product has been assembled. With VR, businesses can make it possible for customers to not just look at these products but to dismantle and assemble them correctly.
The power of AR/VR to provide personalized recommendations
Most customers have specific requirements when purchasing a product, such as the features or color or the ability to customize it according to their needs. Traditional retail requires the customer to visit the retail store, spend a few hours and either choose from what products are currently available at the store or order a customized one (if the store has this feature) that would be either delivered or need to be picked up from the store.
Depending on the product type, some customers may want to avoid picking what’s available and may think it’s been a massive waste of their time to come to the store if they have to wait for the product to be customized and arrive later. For customers like this, it will make life a lot easier to use an AR or VR-based shopping experience, where they can virtually customize the product themselves and then only go to the store to pick it up or get it delivered to their home directly.
The ability to view or interact with the product and see how it looks on them makes it more personalized for the customers than just looking at them in a shop. This will also help boost customer satisfaction as they appreciate having control over the personalization process and are likely to purchase from the business again.
Increasing Sales and ROI through AR/VR
As discussed above, the ability to customize, interact and personalize the products helps the customers not just purchase for the first time with a business but also encourages them to come back and buy with the company repeatedly.
Apart from the actual purchasing process, another area in which AR and VR have played an enormous role in recent times is the promotion of products. If you have been online during the release of Barbie and Oppenheimer movies, you likely saw videos circulated on social media platforms like this.
Other brands have also started experimenting with AR-based advertising, enabling them to improve their sales and get better ROI on their investments in these projects.
Currently, ads or product information in traditional media platforms like paper, magazines, billboards or even television ads only help customers learn about a product but do not facilitate converting that into a sale. But with AR, businesses can enable the customer not just to scan the ad to get more details but also be able to make a purchase or request a purchase from the same screen.
The data shows that AR-based marketing has facilitated a 94% conversion rate of consumers interacting with an AR-based marketing campaign and potentially engaging or purchasing the product.
Tackling the product returns challenges
As a consumer, you see a product online, order it and wait for it to arrive at your doorstep. Once it does come up, if the product does not fit or look the way that you had imagined it to be, you are very likely to put it in for a return, which is very disappointing and could lead to you as a customer choosing to not purchase from the same brand again.
Similarly, as a business, you pack the product, send it out for delivery and close the sale once it reaches the customer. But just as you are moving to focus on another customer, you see a return request from that same customer. This is disheartening and will again involve the delivery team picking up the product, bringing it back to your warehouse, and you as a business having to repack it and make it ready for sale again (if the product has not been damaged in any way).
Most of this can be solved if you, as a seller, allow the customer to try the product using AR or VR platforms virtually. Then, they are more likely to understand the fit better and are less likely to purchase a wrong-sized product. This will result in no returns from the customer.
Another point to remember regarding returns is the cost of facilitating the whole process. For a company, it becomes very costly to take a return delivery, process it through their inventory system and get it ready for sale again. It does not just add to the delivery charges but also to the inventory management and other business functions.
Using data from AR/VR initiatives to power your business:
Access to the correct data can do wonders for your business, so companies spend a lot of money identifying and generating consumer data. This data enables the company to make better business decisions and saves time and money.
With AR/VR initiatives, consumers use a device to interact with a company’s platform. The interaction must be loaded from a cloud location as it is run virtually. Hence, this opens up the opportunity for the business to get valuable data from the consumers. Data like:
- What product did the customer interact with?
- How long did they use the experience?
- Where were they when they initiated the interaction? (General location, not too specific)
- Did they try to purchase the product or not?
- And many more data points.
The company can then use this data to identify the customer’s behavior in a better way. This opens up opportunities to better plan future marketing campaigns and manage the inventory for their products (if location data is collected as part of the campaigns).
The Future of AR/VR in Retail
Both AR and VR are being adopted by businesses to showcase their products uniquely. AR-based billboards have grown significantly in recent years, enabling customers to engage better with the company and the products. Similarly, VR-based platforms are being explored by brands to create unique experiences like virtual stores and even use newer technologies like NFTs to make it possible for customers to buy, store and even access real products offline.
Other trends that businesses need to be aware of are the growing possibilities of phygital retail opportunities. Products with a physical presence and digital counterpart or interactive experiences let the users get more experiences from their actual purchase. There are opportunities for businesses to provide virtual versions of physical products. Hence, the generation more likely to interact and showcase their products on these virtual platforms can bring their physical products into these virtual worlds.
Consumers are spending more time on devices and screens than ever in the history of humans. It is also a time when internet speeds and access to smart devices are becoming more and more accessible. These devices and the rate of connectivity mean that the consumers growing up today want to experience retail differently.
They are already attending events in Fortnite and interacting with businesses in different metaverses. If you, as a retail business, are not yet looking at AR and VR as potential channels to interact with your customers, you will likely face challenges in increasing your sales. Because believe me, your competitors are going to these virtual worlds and meeting your customers there.
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Amit Ranjan
Director and Senior iOS Architect
With over two decades of award-winning experience in apps development, I have had the privilege of collaborating with leading companies in the banking, airlines, energy and retail sectors. Throughout my journey, I have consistently demonstrated a knack for creating user-centric designs tailored to a diverse clientele.
As a senior architect, I played a pivotal role in developing a cost effective app that not only met business requirements but also delivered customer satisfaction. This involved navigating clients landscape, understanding unique challenges and implementing innovative solutions.