‘Returning items has never been easier, so how customers interact with your products after they receive them is just as important as giving them the right information when they’re browsing’

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Retail in Alternate Realities

‘Returning items has never been easier, so how customers interact with your products after they receive them is just as important as giving them the right information when they’re browsing’

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In 1968 Ivan Sutherland created a head-mounted display (HMD) so heavy it needed to be attached to a mechanical arm suspended from the ceiling. Nicknamed ‘The Sword of Damocles’, users could don the HMD and view the output of a computer program (a geometric shape) superimposed onto their view of the real world.

Almost 50 years later Virtual Reality (VR) and Augmented Reality (AR) technologies have more commercial potential as the technologies needed for them have gotten cheaper, smaller and more powerful (largely due to mobile phone demand which has driven down the size and cost of related hardware).

In retail and e-commerce we’re seeing an uptick in the adoption of AR & VR technologies. This post looks at how they are being used and, more importantly, is it worth it?

Whole New Worlds

Here are the main ways retailers are currently using AR and VR:

1. Online shoppers can try out the goods

Some items like clothes or home furniture do not lend themselves well to online shopping. Only having a picture to go by might be fine when you’re buying batteries, but for clothes it is a far cry from the traditional setting where you can touch, feel and try on the product before you buy.

AR is being used to help shoppers ‘see’ themselves in new clothes, or if new furniture fits in their room. It’s hardly a surprising step, but those doing it hope to see an uptick in conversion rates as they try to instil confidence in shoppers.

2. Digital ‘hooks’ in a physical environment

Everyone has a mobile device now, so why not inspire them to use it when they’re shopping? Some products can present games or other interactions when scanned with a mobile phone, and this in turn can offer customers discounts or further incentives.

A huge focus currently for retailers is moving out of silos and unifying their digital and physical offerings. Using AR ‘hooks’ in the physical environment is just another way of achieving this.

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3. Physical locations, virtual stores

Property prices are increasing constantly in urban areas, so why not stick to virtual-only shops that people can still walk to? This is what one Chinese retailer is trying, and has opened up hundreds of ‘virtual’ shops that shoppers can find (using their mobile phones) when walking around their city.

4. Improving warehouse picking and packing efficiency

Efficient picking operations mean the company saves money and customers get their goods faster. AR headsets can offer valuable time savings and help pickers work more efficiently, for example scanning items by just looking at them rather than having to use a physical scanner. All this is done using glasses that contain interfaces for the packers.

5. Post-sales support

Returning items has never been easier, so how customers interact with your products after they receive them is just as important as giving them the right information when they’re browsing. AR helps by offering customers digital manuals that can be more responsive to their needs.

6. Consistent brand experience using VR

Mail-order catalogues have been the main method for retailers to offer a ‘brand experience’ at home for over 100 years, but that could soon change with the introduction of VR stores.

In the future, by simply slipping on a headset in the comfort of your own home, you could be presented with a digital store designed by the retailer, exclusive to you (no queues or crowds to wade through). It could offer a richer, more immersive shopping experience to just the online website, perfect for customers who like to take their time and really indulge in the shopping experience.

The Reality: Does it work?

You’ll notice in the examples above a distinct lack of hard facts, and that’s because there aren’t any publicly available. It’s unclear whether using AR and VR will boost your sales, at least until results from this first wave of applications are released (or interpreted from companies’ sales reports).

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There are some figures. Mitsubishi reportedly saw a $50 million boost in sales when using their AR app (meView) to help clients visualise products in their homes. They also saved $2 million in printing costs by moving to completely digital catalogues.

On a ‘cuter’ note (unless you distrust penguins), Sunshine Aquarium in Tokyo introduced a mobile AR app which had digital penguins guide users around the city to the aquarium. This reportedly boosted ticket sales 152%.

It is clear that we are still in an initial adoption phase of these techniques in retailing and e-commerce. This means that by investing in AR or VR now, you can at least reap some benefits of being an early adopter, such as free marketing or press coverage.

Artificial or Virtual?

Most of the current examples use AR because it offers an easier starting point than VR. AR interactions can be done using mobile phones (which everyone has) whilst VR interactions require special headsets linked to powerful computers.

That’s not to say there aren’t intriguing possibilities with VR. For example, retailers could buy small physical spaces rather than department stores, and simply let customers use VR headsets in these spaces to simulate a larger store, whilst still fulfilling goods on-site using storage space that would otherwise have been used (less efficiently) for the store itself.

 

Conclusion

AR and VR are still new, and companies who adopt them do so in part because they want to take advantage of this novelty and be known as trail-blazing, ‘modern’ companies.

As a technology company ourselves, Tacit is extremely excited about the possibilities AR and VR bring to the retailing space and how they will be used in the future to improve customers’ experiences.

There are countless possibilities for using these technologies beyond the examples we’ve listed above. Our engineers are looking forward to working on some exciting new challenges…as long as they don’t have to wear the Sword of Damocles!

About Tacit Knowledge
Tacit Knowledge is a digital commerce consultancy focused on creating value for our clients by helping them consistently satisfy and delight shoppers across all channels and devices.