Augmented reality (AR) and virtual reality (VR) have the potential to shake up the customer experience by individualising retailers’ offers and enabling customers to visualise products in different settings. This is according to research and advisory company Gartner that predicts by 2020, 100 million consumers will shop in AR online and in-store.
“Retailers are under increasing pressure to explain the purpose of physical stores, and take control of the fulfilment and return process for cross-channel execution,” said Hann Gartner a Karki, principal research analyst at Gartner.
“At the same time, consumers are progressively defining the value provided by the experiences they receive from retailers. As a result of these pressures, retailers are turning to AR and VR to offer customers a unified retail experience inside and outside retail stores.”
A 2018 Gartner survey indicated that, by 2020, 46% of retailers planned to deploy either AR or VR solutions to meet customer service experience requirements.
“The impact of AR or VR in retail can be transformative,” said Karki. “Retailers can use AR as an extension of the brand experience to engage customers in immersive environments and drive revenue. For example, IKEA’s Place app enables customers to virtually ‘place’ IKEA products in their space. Additionally, AR can be used outside the store after a sale to increase customer satisfaction and improve loyalty.”
With VR’s immersive interfaces, retailers can create task efficiencies or reduce the costs associated with designing new products. They can also enhance the understanding of information through advanced graphical visualisation and simulation technologies. Pilots and implementation examples include Alibaba’s full VR shopping experience, virtual reality tours by Tesco, Adidas’ VR video to promote its outdoor clothing collection, and eBay Australia’s partnerships with Myer to create personalised stores.
Gartner highlights that 5G mobile network technology represents an opportunity to accelerate the adoption of AR and VR in stores. Its recent 5G enterprise survey indicated that AR/VR applications of 5G attract the highest expectations for becoming drivers of new revenue, across all use cases and respondents. 5G capabilities can support multiple uses cases, such as real-time rendering for immersive video, shorter download and set-up times, and extension of brands and shopping experiences beyond stores.
“Gartner expects that the implementation of 5G and AR or VR in stores will transform not only customer engagement but also the entire product management cycle of brands,” said Sylvain Fabre, senior research director at Gartner. “5G can optimise warehouse resources, enhance store traffic analytics and enable beacons that communicate with shoppers’ smartphones.”
Adding to Gartner’s insights, Anita Liu Harvey, Director of Strategy at Barclaycard said: “As consumers demand more personalised experiences, the retail industry must use technology to transform the customer experience and remain relevant in a competitive market.
“Some brands have already started to take advantage of this. For example, this year Zara introduced an augmented reality experience at selected stores, creating a new-age, futuristic take on window dressing. These stores have turned their shop windows into holograms showcasing some of their latest products, which you can buy on your smartphone with the click of a button.
“It’s clear that consumers also expect the customer experience to be seamless from end-to-end. As such, customers are signaling for a more convenient and almost ‘invisible’ payment process. From biometrics to contactless coffee cups, consumers have never had more choice about how they want to pay. It’s therefore crucial that retailers take personalisation seriously throughout the whole customer experience, including the payment journey.
“Furthermore, as consumers increasingly shop online, AR, VR and related technologies offer retailers the opportunity to overcome some of the new challenges facing the industry – in particular, the volume of returns. Our research found that shoppers return £7bn of purchases every year, leading to a ‘Phantom Economy’ of revenue that ultimately cannot be recognised. By implementing technology such as virtual fitting rooms, retailers could offer shoppers the opportunity to virtually ‘try before they buy’, reducing the number of returns they receive and boosting their bottom line.”
