By Debbie Hauss, Editor-in-Chief
McDonald’s knows it. Nabisco is on board. Even an under-the-radar chocolate brand called Cailler is realizing the benefits of being on the cutting edge of Virtual Reality (VR) in retail.
After listening to a presentation on VR from Groove Jones’ Dan Ferguson during the Texas A&M Retailing Summit, I admit I’m sold on it as well. Here are three reasons why:
- As visual commerce and content become more important in overall marketing strategies, Nabisco took a leap of faith when creating an Oreo video that appeared on YouTube. Bottom line: 30% of people clicked through to the content; and 80% watched the complete video. It’s hard to beat those stats! At press time, the video had more than 3.1 million views since its February 2016 publication date.
- The McDonald’s VR booth was arguably one of the most popular activities during South by Southwest (SXSW), which is a statement in and of itself. Even more impressive is that it was McDonald’s that garnered that kind of attention. “We ran 8,000 people through the McDonald’s activation,” Ferguson explained, “and it generated 129 million impressions.” It was voted the best experience at SXSW, he added. During the experience consumers were able to paint their own virtual Happy Meal box.
- To introduce Cailler chocolate to the U.S. market, Nestle invested in VR to tell the brand story to a captive audience. Via pop-ups in shopping malls and airports, the company used Samsung head sets and enticed passersby to commit just a few minutes of their time to become immersed in the brand. During the VR experience, consumers had no choice but to be completely focused on the brand story. “It was a factory tour,” said Ferguson, “and people actually stood in line for it.”
In one other example, Groove Jones created a VR campaign for Kaiser Permanente during Super Bowl 50 and “People waited in line for four hours to watch a two-minute commercial,” Ferguson said. And Audi currently is retrofitting showrooms so customer can walk in and customize their vehicle using VR, he added. “It can be a pop-up in a mall. All you need is a PC and head set.”
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A number of other retailers and businesses currently are investing in VR, including eBay, which has introduced virtual reality commerce, or v-Commerce. Fashion brands are embracing the concept as well, as reported in a Huffington Post article.
Could VR Be A Short-Term Fad? Probably Not.
That’s the first question on your mind, right? Mine too. But in fact VR could become a key component of many future activities, including cashing a check, shopping in a mall and training for a new job. “By the time my eight-year-old son is 16 he may never go to a mall because he can [do all his shopping] at home in his living room,” Ferguson stated.
So what’s holding VR back today? Mostly cost, according to Ferguson: “Content and head sets are still expensive.” A fully interactive video shoot could cost up to $1 million. A shoot could involve up to 24 cameras, he explained. But a more “guerilla style” shoot could be significantly less, possibly $75,000.
Retina scanners also will eventually reduce VR costs, Ferguson added. “It’s probably a year or two out, but once we can track where you pupil is, we can drastically reduce the cost by putting the video where you’re looking.”
Advice To Retailers: Don’t Wait
An article in the Harvard Business Review, authored by L.E.K Consulting’s Dan McKone, offered a number of tips for retailers considering VR as well as Augmented Reality (AR), including choosing the right technology, in-store vs. out-of-store use, and customer targets.
McKone noted that AR and VR startups raised $658 million in equity financing last year; and the potential for AR and VR investment in retail is close to $30 billion by 2020 (from nothing today). His final advice for retailers? “Don’t wait for a ‘killer app’ to force your hand. Deciding how to play early, and which bets to place now, will let retailers take the lead in this technology.”
