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7 Reasons Why It's Still Too Early for VR in Retail

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7 reasons why it's still too early for VR in retail

A major technological revolution is underway in the retail world. Always-connected customers are craving an omnichannel experience when they’re shopping. As retailers focus on creating shopper- and experience-centric stores, they experiment with immersive technology to introduce futuristic experiences.

Before we dive in

Virtual reality is a 3D, computer-generated environment that people can explore. This technology creates an entirely artificial world where people can manipulate objects or perform a series of other actions.

VR is the most immersive experience because it blocks out the real world, making the user unaware of the environment around them. For this kind of virtual experience, customers must have special headsets which are still quite expensive.

 

Is VR the next big thing in retail?

We are constantly bombarded with news and articles about VR being the next big thing in retail and how it will soon transform the shopping experience.

But what does “soon” mean? And is that really the case?

We can’t deny that VR has arrived and we are witnessing some of the biggest companies experimenting and introducing immersive experiences for their customers. According to Spiceworks 75% of the world’s most valuable brands have created some form of virtual or augmented reality experience for customers or employees.


visualization guide


However, we’re still at the beginning of the journey. There is a need for more developments in this space. The technology does not live up to customer expectations and is not accessible enough to become mainstream yet. According to research from Perkins Coie, respondents identify the user experience as the top obstacle for mass adoption of VR (41%), reflecting ongoing concerns with technical limitations and performance issues, as well as bulky hardware.

We still can’t imagine shoppers at home, sitting on a sofa and putting on a headset to go shopping, which is why VR is not scalable at the moment. However, many brands and retailers experiment with this technology to attract more customers in-store and to eventually create the store of the future with limited physical space, but with unique, immersive experiences.

However, we’re still at the beginning of the journey. There is a need for more developments in this space. The technology does not live up to customer expectations and is not accessible enough to become mainstream yet. According to research from Perkins Coie, respondents identify the user experience as the top obstacle for mass adoption of VR (41%), reflecting ongoing concerns with technical limitations and performance issues, as well as bulky hardware.

Back in 2016, IKEA has introduced the Virtual Reality Kitchen Experience enabling customers to walk around real size, make-believe 3D kitchen and interact with objects. Customers were equipped with two wands, which let them navigate freely, change the color of cabinets or drawers, even cook virtually. When they collected the feedback from people on what they wanted to do more of, the most wanted feature was - meatballs. And it’s no surprise, at this point customers look on virtual reality like entertainment, and not product visualization technology and there are many reasons why is that so.

Today we want to demystify VR in retail and to help you mitigate some of the risk factors associated with this new, cutting-edge technology.

Let’s get to the bottom of this and elaborate why it’s too early for VR in retail.

 


1. Expensive equipment

The most obvious downside of VR is that it requires hardware, so it is not easily scalable until most customers don’t have such devices in their homes, which is not likely to happen any time soon due to the user experience (technical limitations and performance issues), content offering and price of the equipment. A report from IDC’s Worldwide Quarterly Augmented and Virtual Reality Headset Tracker has found that shipments of AR and VR headsets was down from last year. The report showed that shipments of VR and AR headsets were down 30.5% year over year, totaling 1.2 million units in the first quarter of 2018. The main reason for this according to IDC is that headset makers are no longer giving their products away for free (this was the case with Samsung that offered free VR headsets with its smartphones two years in a row). However, experts predict that VR headset shipments will grow from 24% in 2018 to 44.6% by 2022.

According to Statista 4.65 million VR devices were shipped in 2018 (compared with 3.7 million in 2017). Sony took the biggest piece of the pie, with 2 million VR devices.


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2. Lack of relevant content

According to Perkins Coie, the third biggest obstacle to mass adoption of VR technology (after user experience/bulky hardware and cost) is content offering (e.g. lack of quality content, amount of content available). There has to be enough compelling VR content so customers can see the value to make hardware investment. The need for high-quality and not just visually pleasing content will be more critical than ever.

 


3. Low vs. High Poly Assets

Let’s clear things up - A low poly asset is a 3D polygon mesh that has a small number of polygons, so it often appears blocky and lacks detail, but it still demonstrates the basic shape. High poly assets, on the other hand, have an enormous amount of polygons, which in conjunction with physically based materials can generate photo-realistic look. At this stage, VR technologies mostly utilize low to medium poly assets. When it comes to retail, and especially industries that rely heavily on visual senses like furniture industry, high poly, photorealistic visuals are a must if you want to shift the purchasing journey online. Low poly assets can’t instill confidence for purchasing decision.


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Low vs. High Poly

 


4. Omnichannel VR - Easier said than done

The store of the future will be a blend of digital and physical world, combining the convenience benefits of e-commerce with the product exploration benefits of brick-and-mortar. Traditional retailers have realized the importance of digital merchandising and the power of first digital impression, while pure-plays found out that even having a small, gallery-like store can have a significant impact on the business (i.e. earlier this year La-Z boy acquired Joybird, and Interior Define opened its first physical store).


Businesses today need to be aware that multichannel does not equate to omnichannel. The omnichannel challenge which many companies struggle with today is about having a consistent and relevant content across all of their channels.

As illustrated above, the main business challenge with VR is that wide user adoption is not expected to be seen in the foreseeable future. One of the main obstacles here is the expensive headset equipment. We can all agree that a scenario in which shoppers can be at home, sitting on a couch and put on a headset to go shopping still something that we can’t quite imagine. Even though companies invest heavily in making this a reality, the process will take some time. For now, companies experiment with immersive experiences powered by VR technology in-store to create the store of the future.

 


5. Customers are not impressed by meaningless interactions

Forget about the ‘wow’ factor. Customers are looking for relevant shopping experiences. If you use VR to create pointless interactions, you will damage your brand, and you will lose customers. Take care of the basics first and then experiment with immersive technologies. If you are ready to launch a VR experience, make sure it’s relevant and worthwhile. If you want to use VR to sell more and to visualize products, you have to create relevant, engaging experiences to ease customers’ decision-making process. Otherwise, customers will use your VR only for fun, but it won’t help you sell more.

 


6. Is your target audience ready for VR?

Gen Z is the most passionate generation for all things VR. But the question is: Are they your target audience and do they have the purchasing power needed for your industry? If you are a furniture retailer, then Gen Z is far from your target because they are not the decision-makers when it comes to furniture. As time passes by, consumers who grew up during an era of rapid technological development like Millenials and Gen Z will be the leading decision-making generation with the highest purchasing power. That will be the time to offer immersive shopping experiences to grab customers’ attention.

 


7. Brand image vs. ROI

VR is still in the experimental phase (especially in retail), so it is more suitable for brand image programs, rather than measurable results and ROI. Currently, it is more brand-centric than customer-centric. It will be interesting to see how things will develop in the future. At this stage, from a technology ROI standpoint, VR is more suitable for branding initiatives and marketing programs centered around creating buzz.

Two years ago, one of the world’s largest e-commerce companies for furniture, home furnishings, and decor - Wayfair opened an innovation lab - Wayfair Next - to develop and refine interactive 3D experiences. One of their first experiments with VR was Patio Playground, an app that lets customers get a virtual view of how furniture might look by using it to enhance an outdoor setting. Their second VR app - IdeaSpace - enables customers to explore a variety of unique spaces and shop in an interactive environment. Thanks to their constant investment in new technologies Wayfair has been recognized by Fast Company as one of the Top 10 Most Innovative Companies in AR/VR. A few days ago they announced the launch of Wayfair Spaces, an interior design and room planning app that invites consumers to explore professionally designed rooms and visualize products in their homes at scale through mixed reality. For starters, there are several hundred products to choose from, with plans of adding more in the future. For now it’s just a visualization app, with no e-commerce component. Aside from the constant technology innovations, this year they’ve finally embraced the power of omnichannel, opening their first physical store a few months ago.


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Source: Wayfair Technology Blog

The bottom line is - VR is in a stage of hype. Big players experiment with the technology, and the smaller companies follow. We can’t deny that there is significant potential for VR in retail.
However, there is a need for more relevant content, more use cases, and better assets quality to make sense for customers to buy VR headset thus paving the way for VR to become mainstream.

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About Author

Bili V
Bili V

The person behind the Cylindo blog. Excited about the future of technology and retail.

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