Augmented reality (AR) and virtual reality (VR) are already making inroads in retail. Lowe’s, Wayfair and Design With Reach, for example, use these technologies to help customers visualize how furniture and other design changes will look in their homes.
AR’s ability to bring ratings and reviews, long a staple of e-Commerce, into the brick-and-mortar environment presents an exciting prospect, according to Pano Anthos, Managing Director of XRC Labs. “Customers walk into a store and we’re blind as bats,” he said during a session at the 2017 Retail Innovation Conference. “We don’t know if the product stinks or falls apart in five minutes, or anything about where it comes from. Everyone online looks at ratings and reviews, so why not in the store? AR provides the first wave of that potential by having the digitization of ratings and reviews dropped onto your phone.”
Despite these real-world use cases, opinion remains sharply divided about the ultimate value of AR and VR, as well as how much — and how quickly — retailers should invest in the technology. Members of the RetailWire BrainTrust recently debated the technologies’ merits:
Art Suriano, CEO, The TSi Company
I can see the strongest benefits of AR and VR technology being the ability to have an idea of what the furniture will look like before I purchase it. Retailers today are being inundated with so many new technological “must-haves.” They have to carefully pick and choose the ones they feel will help them achieve sales. Where is the technology needed? Why? How will it improve my sales? How could it hurt my business? These are the questions the retailers must answer before making decisions. Technology is not cheap and, with many retailers currently struggling just to survive, I’m not sure how many will be investing in as much technology as we’d like.
Paula Rosenblum, Managing Partner, RSR Research
I believe VR is the next 3-D TV. It has almost no value in retail (or anywhere else, except gaming and maybe a deathbed). AR is interesting but also seems kind of niche. Gosh, I really wish retailers would focus on actual retailing, with actual employees who know what they’re doing to create a better experience for customers. I really do.
Lee Peterson, EVP Brand, Strategy & Design, WD Partners
Depends on the brand. The idea of Home Depot having VR to show you how your room would look in a certain color, or Best Buy having VR for gaming — that works. But for a retailer like Abercrombie or Urban Outfitters or even Apple? It doesn’t make sense.
Part of the illusion retailers have about digital retail integration is that they have to have every new toy that comes along because it’s hot. This is not so. For some brands, why would you want to put a customer in a fantasy world in your store that they can very well be in at home? Why not make your store a fantasy world (or at least so interesting that consumers want to be in it) and keep them conscious — you know, feeling your brand? Re: AR/VR, tread lightly.
Cynthia Holcomb, Founder/CEO, Prefeye – Preference Science Technologies
AR and VR in-store retail applications are like movies. Great inspiration for visualizing furniture in my home and the like. But awful for clothes, since we actually wear clothes on our bodies. Seeing an AR/VR view of what a dress looks like on a shopper, in a mirror at Gap, is akin to holding the dress up to oneself and looking in the mirror. A gimmick. When it comes to apparel, an individual person needs to find out if they like how an individual garment fits, looks and feels on their body. That is why apparel, the largest category of online sales, still sees conversion rates of around 3% since 1995.
Tom Dougherty, President and CEO, Stealing Share
Absolutely. [AR and VR] must be in the plans. But don’t confuse that with current technology. The first-mover advantage will be short lived because of technological drawbacks — but make no mistake about it. It’s coming. If I were a retailer I would be investing in advancing the technology before I would put a penny into another brick-and-mortar venture.
Neil Saunders, Managing Director, GlobalData
Where VR or AR is applied to solve problems or to inspire, it will be of benefit to retail. Ashley Furniture and IKEA are already using these technologies to help consumers visualize room layouts. Their trials have been well received. I am far more skeptical about shopping in VR environments. For functional purchases like grocery, I can’t see the point: buying via a traditional web site or app is far easier. For added-value purchases, many will still want the experience and interaction of a physical environment. In this regard, VR/AR seem like technologies in search of a purpose.
Sterling Hawkins, Co-Founder, Center for Advancing Retail & Technology
This is definitely a discussion that needs to be had by vertical. If it’s not adding value, it’s not worth it. At the same time, all retailers need to be aware of the innovation and continually reassessing. We live in a world where consumers are holding more and more power in the supply chain. If a retailer’s consumers are on mobile, the retailer needs to be mobile-friendly. If a retailer’s consumers are ordering online, the retailer needs to support e-Commerce. And if a critical mass of a retailer’s consumers are in a VR shopping experience, the retailer would need to meet them there as well.
Kenneth Leung, Retail and Customer Experience Expert
There is no killer app for AR and VR, only context and use cases. Instead of starting with “What is the cool technology?,” let’s start with “What customer problem can this technology address whether they can see it now or not?” The cost of investment in AR and VR is not trivial — a retailer cannot spend more money fixing the problem than the problem itself.
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