What Is the Next Big Thing in Retail?

June 28, 2016     By : Sofia

The first intuitive answer would probably be around mobile technology, but another sheriff is showing up in town and may take the leadership sooner than expected. VR has been one of the most exciting tech advancements recently with large tech corporations and startups developing fascinating parallel reality seen in a headset.

While adoption may take a while, the conversation of opportunities for VR in retail have already started. Sanjay Mistry, Director of Architecture at Unity, a software company used by VR developers to create experiences, commented last year that the concept poses challenges, from finding early adopters to a potential to take sales from brick-and-mortar stores. “The adoption will be slow, but this is building the technology for the future,” Mistry added.

The idea of applying VR technology in retail is to bring together the best of online and physical to create the best shopping experience.

In the near future, we may see an increasing number of partnerships between large retailers and tech companies offering VR solutions to trial the option of shopping in VR. Headsets like Oculus Rift, HTC Vive, PlayStation VR and Google Cardboard will be defining the future way to browse through offerings and to shop.

VR can significantly increase the satisfaction from shopping without the hassle of standing in lines to fitting rooms and browsing through large stores for hours. Superior quality of headsets and advanced features will create a whole another reality where changing colors will not require any physical action. Opportunity to seamlessly pick and try stuff one likes will smoothen the shopping process and probably give a boost to sales once payment methods are embedded as smoothly as the opportunity to find and try exactly what you need.

Among the innovative brands that started the journey early is Topshop. Two years ago, retailer has collaborated with 3D agency Inition to allow fans of the brand to experience a virtual front-row seat at London Fashion Week.

Among the freshest examples is Swedish furniture manufacturer IKEA that in April announced the release of a pilot virtual reality app, the IKEA VR Experience, on Valve’s world leading game platform Steam. The test app, featuring a virtual kitchen experience, is the first foray from IKEA into VR technology. The launch of the app is intended to solicit consumer feedback as IKEA continues to explore the possible implications of the technology for the home.

“Virtual reality is developing quickly and in five to ten years, it will be an integrated part of people’s lives. We see that virtual reality will play a major role in the future of our customers. For instance, someday, it could be used to enable customers to try out a variety of home furnishing solutions before buying them,” said Jesper Brodin, Managing Director at IKEA of Sweden and Range & Supply Manager at IKEA Group.

Furniture makers will be especially happy with VR. Without the need to occupy rented spaces for endless designs of rooms, they will be able to let the fantasy of a customer go wild and recreate possible arrangements in their own realities with further purchasing all necessary pieces.

Not only will VR create a near-perfect and smooth shopping experience, it will allow customers to almost literally go back in time and experience fashion events of the past, events and exhibitions. For retailers, it will mean a prolonged life cycle of customized offerings to particular customers. Tommy Hilfiger, for example, made its fall 2015 catwalk show available to watch via a virtual reality experience in select stores around the world.

Different segments in retail will require various capabilities from VR technology, such as the ability to move objects in virtual reality with physical movements (Virtuix), the payment option with possible retina authentication, friendly user interface to change clothes styles and colors, and maybe features we can’t even imagine yet.

VR certainly has a potential to transform industries across the board. Some estimations suggest that VR has grown by nearly four times in the last year indicating a firm interest in the technology and its applications. And although VR can’t be considered mainstream yet, there is no doubt it will be one of the next big things in retail and beyond.

As Marc Mathieu, Samsung America Chief Marketing Officer, commented at the Cannes Lions stage recently, “VR is a completely experiential medium – you can be in your own body but also be somewhere else. We’re at one of those incredible artistic junctures.”

Automotive isn’t standing idle either. In fact, Audi has been experimenting with virtual reality starting back in 2012, when the company created Audi City, a fully digital car showroom for car shoppers to take a virtual tour and explore a car’s features via a Samsung Gear VR headset. At the time when Audi City came to Germany two years later, Luca de Meo, Member of the Board of Management for Sales at AUDI AG, commented, “Audi City is showing the way to the future of sales. We are combining the best of two worlds with this concept: new digital possibilities and even more personal customer consultation.”

While businesses may be cautious with VR, the customers appear to be ready to embrace innovation. As Forbes reported, “consumers are interested in how AI will be used in retail: 70% of US millennials, and 62% of millennials in the UK, say they would appreciate a brand or retailer using AI technology to show more interesting products. Furthermore, 72% and 64%, respectively, believe that as the technology develops, brands using AI will be able to accurately predict what they want.”

And there are already examples demonstrating the interest in AI coming from retailers. The North Face in collaboration with IBM Watson has been experimenting with AI to help customers find the perfect product. As Cal Bouchard, Senior Director of E-Commerce at The North Face, commented, “We jumped at the chance to try and harness IBM’s Watson technology to see what we could do to change online shopping. And the key word in there is ‘change’.”

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Sofia

Sofia is a contributing writer for LTP based in New York. She is a market research professional skilled in data analysis and visualization. Sofia has an extensive experience in consumer behavior studies and marketing analytics. She is passionate about disruptive startups with innovative business models that are having a powerful impact on the industries.

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