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How AR/VR Can Create A ‘Wow’ Experience At Retail

Sales start rockin’ when AR comes a’knockin’ 10/04/2017 10:45:00 AM

Many CE retailers sell virtual reality (VR) glasses by brands such as Oculus, Samsung (Gear) and even Microsoft (HoloLens). But VR technology can help customers envision in the store what their entertainment systems could look like in their homes. 

But VR is not the only altered reality technology available.  Augmented reality (AR) is a simpler and less expensive alternative that does not require users to wear glasses. Instead, they can use their cell phones or other devices like tablets to add virtual objects into their views.

As the use of VR and AR grows, more and more applications are being utilized at retail to enable customers to get a better preview of the products that are buying.  According to one study, retail enterprise usage of VR/AR software will represent a $1.6 billion expenditure in 2025.  That may seem like a lot, but it pales in comparison to the forecasted $19 billion expenditure by the entertainment industry.

Virtual Reality + Glasses
VR is meant to be an immersive technology, with the goal being to minimize other sensory input for the user. VR glasses (also referred to as goggles or visors) eliminate other visual inputs, and often control auditory inputs as well. The result is that the user is transported into another world. This is obviously great for video games, but there are a number of retailers who are using it appropriately on the salesfloor.
  
One of the largest retailers using VR is Lowe’s.
  In many Lowe’s stores there is a virtual kitchen display, which is actually a blank corner with only some basic wooden fixtures.  But once the customer puts on the VR glasses, they can mix-and-match the countertops, cabinets and appliances in virtual reality by using their fingers to choose from a menu of options.

In addition to Lowe’s, IKEA has also developed a Virtual Home Experience, which is a VR station, in many of its stores. 

Since the glasses (and of course the software platform) can be quite expensive (a pair of glasses can run between $2,000 and $3,000), it really only makes financial sense for VR technology to be used to sell high-ticket items and services such as a kitchen remodel.

Besides customer-facing experiences, some retailers are using VR to improve their operations, especially by creating multi-faceted store environments without having to step foot into the store itself.  For example:

* Store design:  VR can be used to create fixture designs and produce a floor plan from a bird’s-eye perspective;

* Testing point-of-sale materials: P.O.S. and end-cap designs can be tested in VR and eye-tracking data can be overlaid;

 * Virtual presentations. Different designs and P.O.S. materials can be presented to committees or other decision-making parties in different regions to get their input.

Augmented Reality Without Glasses
AR is different than VR in that it is meant to interact with reality, therefore external visual and sonic inputs must be part of the overall experience (instead of being eliminated as with VR). AR simply uses a smartphone or tablet to create the environment rather than glasses. This of course can be cheaper for the retailer as there is no real hardware costs – the customer can get the AR experience through an app on their own mobile device.

There have been a number of AR pilots rolled out by various online and offline retailers. Among them:

eBay/Myers Virtual Store
In 2016, eBay partnered with Australian department store chain Myers to create a virtual store using AR technology.  They provided customers with iOS and Android apps to download and gave away 20,000 “Shopticals” – in this case Google Cardboard headsets. (The Google Cardboard headsets creates a free alternative to expensive VR glasses by incorporating the users’ cell phones.)

Within the virtual store the user can access several product categories including electronics and women's apparel. Users select a category and the experience is built around it. As the user explores, chooses, or rejects items, it trains the algorithm to personalize the product recommendations.  One hundred of Myers’ top products are viewable in 3D, with the remaining 12,500 shown in 2D.

IKEA AR App
Recently, IKEA has released its own AR app to help customers at home visualize what new furniture pieces might look like in their abodes.  Users can easily access IKEA products on their mobile devices, point them at the considered locations in their homes, and see 3D renderings of their new living spaces.  Images seem relatively accurate in terms of scale and color. 

This is the second such app from IKEA. The chain’s previous effort had a similar 3D experience but required the physical paper catalog for it to work properly. Other retailers like Lowe’s and Pottery Barn have also released AR apps, but they all require Google Tango-enabled devices.

Other AR Use Cases
The most common use of AR technology is to give the customer an idea of what home entertainment products such as large-screen TVs would look like in their homes, and also whether the products would match with their existing furniture. AR can also be used to preview paint colors and wallpaper as well.

There are also many applications in the fashion and cosmetics retail space.  So-called “magic mirrors” allow the customer to preview what certain garments would look like without actually trying them on.  In addition, there a number of apps that will preview how a particular shade of lipstick or eyeshadow would look like without actually applying it.  This could save a lot of time (not to mention demo products) for the both the customer and the store associate.

Aside from the conversion rate benefits of making consumers feel comfortable about a purchase, AR can also help reduce return rates by helping to prevent consumers from making erroneous purchases that cause buyer’s remorse.

Here are some more examples of AR apps at retail:

* Memomi, a smart mirror technology company for the fashion and fashion accessories industry;

* Neiman Marcus has been testing an apparel app;

* Sephora has a virtual makeup app; and

* Jura lets you try on virtual watches.

Noah Herschman is a Microsoft retail industry senior architect with over 30 years’ experience in CE retail, including stints at Tweeter, Amazon, Staples China, eBay, DHgate and Groupon Goods Asia. His partner ShiSh Shridhar has worked at Microsoft for more than 20 years, currently as retail industry lead for data and analytics. Together they are creating technical solutions that are sophisticated in design and specifically targeted to improve businesses by engaging customers, empowering employees, optimizing operations and transforming products.

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