Retailers need a dose of virtual reality to re-engage customers - While technology has caused problems for the high street, it could also provide ...
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Retailers need a dose
of virtual reality to
re-engage customers
While technology has caused problems for the high
street, it could also provide a solution
PA G E 1
Retailers need a dose of virtual reality to re-engage customers
Traditional retailing has been in the doldrums for over 18 months Our recent research of IT directors and CIOs in retail found that 50
now, so it is perhaps no surprise that Silicon Valley arguments per cent believe immersive experiences will have the most impact
over whether or not augmented reality (AR) or virtual reality (VR) of all nascent technologies on their workplace over the next five
will be more dominant in retailing are not really getting much years . Certainly, both VR and AR have emerged as sufficiently
traction. As a Retail Research list of 2018 and 2019 company mature technologies capable of offering retailers and brands
failures testifies, market conditions are changing and rapidly piling visually engaging experiences. While brands such as The North
pressure on traditional retailing business models. Face, Volvo and Nike have been using VR over the past few years,
primarily as a PR and marketing tool, few retailers have dipped
These are testing times. And yet, as retailers morph and jostle their toe in the VR water.
for position, leading-edge technologies offer an opportunity
to re-engage those customers disillusioned with traditional There are exceptions. Alibaba launched a VR shopping experience
shopping, or indeed those lost entirely to online shopping. It’s not in 2016 with US department store Macy’s. In 2018, Amazon
necessarily about competing with online experiences, it’s about launched its own VR shopping experience with VR kiosks in India.
creating new experiences on the high street, to promote and sell Both online retailers’ projects are aimed at testing the water for
products that can be fulfilled either online or in-store. home shopping experiences, especially as VR hardware evolves
and costs fall.
According to Marc Andreessen, co-founder and general partner
of Silicon Valley venture capital firm Andreessen Horowitz, ‘the
valley’ believes that AR will be bigger than VR but Andreessen is
not so sure. He thinks that VR will be “1000 times bigger” than AR.
In retailing at least, he may have a point.
PA G E 2
Retailers need a dose of virtual reality to re-engage customers
Analysts are positive about VR
Current statistics for VR vary, although most reports are positive Global sportswear brand Adidas has also experimented with a
with Goldman Sachs forecasting that the market for AR and VR in number of similar experiences in the past, and in 2018 it set-up
retail will reach $1.6 billion by 2025. What is clear is the changing an in-store VR football experience in one of its Paris stores to help
profile of the shopper. Millennials and Gen Z have grown up with engage consumers. The interactive experience put the user at
technology and that technology has shaped their expectations, the heart of a Champions League game between Real Madrid and
which are now being projected onto the retail industry. This Bayern Munich using a headset and foot-mounted sensors. This
redefining of values, formed through experiences, is reshaping enabled the user to take free kicks and penalties.
retailing. VR and AR were initially a response to this but, as the
technology has improved, so have the use cases. It’s a great example of how the technology can be used to
promote brands, convey lifestyles and entertain consumers.
The key to this is the shift in customer profiles. Millennials are Like iconic adverts, these experiences can garner loyalty, but for
now of disposable income age and research consistently brackets retailers the technology doesn’t stop there. The challenge for
the generation as a tech-savvy group that desires experiential retailers is how to harness this to create sales by enabling great
activities and enjoys being challenged. This generation is growing access to products and buying scenarios.
in influence. The Millennial population is projected to spend $1.4
trillion shopping each year by 2020 and, according to UPS, most As retail explores increased personalisation for consumers,
of this is and will be fulfilled using mobile or online technology. So, shopping experiences will have to evolve to match different
it’s not such a leap to suggest that experiential technologies have tastes, locations and environments. VR is certainly going to be
a potentially huge role in brand and retail development. part of the mix – but that will also include AR and cashier-less
stores, such as Amazon Go. On this front, it was interesting to
As Sol Rogers on Forbes says, VR “stimulates memory to a see Walmart acquiring VR start-up Spatialand in 2018 to develop
higher degree” and “experiences that maximise the immersive retail experiences alongside its other Store No 8 tech projects.
capabilities of VR can create moments that surpass anything in
another medium”.
VR provides the next level of
customer loyalty
Last year, outdoor clothing company The North Face took this
idea to the extreme, launching a VR experience that took in-store
retail customers to Yosemite and Moab, alongside North Face
global athletes Cedar Wright and Sam Elias. Using 360 video, the
idea was to “bring people into our expeditions and spark people’s
interest in getting outdoors,” according to Aaron Carpenter, Vice
President of Marketing, The North Face. “The North Face VR
transports people to Yosemite and Moab to see the beauty and be
inspired to go see it for themselves.”
Reliability is also essential to keep transactions moving and support costs low. Devices that are purpose-built for POS are better equipped to stand up to the rigors
of the retail environment, have lower failure rates and therefore tend to deliver greater reliability.
PA G E 3Retailers need a dose of virtual reality to re-engage customers
This mixed-technology retail world looks to be the shape of retail The challenge for retailers is to fully understand the needs of
in the near future. According to recent findings by McKinsey, their customers, to create experiences that engage different age
while over 60 per cent of consumers in France, Germany, the UK groups and promote products in interesting ways that trigger
and the US had yet to encounter VR or AR applications in-store, sales and loyalty. Although it will take time and there will be no
the majority of retailers surveyed had plans to utilise a virtual one-size-fits-all solution, VR will have a significant role to play
shelf for a number of activities that they say would improve in the future of retail experiences. It may not suit every retailer,
their in-store shopping experience. When asked which AR or VR but given current industry pressures, anything that can boost
applications they would definitely or probably utilise, those that consumer engagement both in-store and online can only provide
made it easy to access additional product information or ‘virtually’ an advantage.
explore product functionality and suitability scored most highly
with consumers in all markets.
How HP can help
HP plays a leading role in helping retailers to maximise the potential of
technology, from our research that unearths vital insights to our products
that equip businesses with the means to take advantage.
Our range of VR solutions for businesses – along with our POS systems,
printing solutions, Workstations, digital signage and managed services
– equip retailers with the power to discover the limitless potential of VR
and deliver on the promise of innovation, enabling them to adapt quickly
to changing dynamics and implement solutions that can rolled out to
anywhere from a single site to the full store portfolio.
PA G E 4
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