This year is set to be a big one for virtual reality.
While virtual reality isn’t new (the foundations for the technology have been kicking around since the ’60s), VR has finally progressed to the point that it’s inexpensive enough for the average consumer. You can pick up Google Cardboard for as little as $15, or buy Samsung’s sturdier Gear VR for just $99 — not bad considering the lackluster VR equipment that sold for $600 and up in the 1990s.
The industry, once limited by such pricey and bulky hardware, has seen an important revival with a wave of new affordable, user-friendly devices. As a result of this increasingly pervasive tech, Deloitte Global predicts that 2016 will mark the industry’s first billion-dollar year, and Goldman Sachs estimates that VR will rake in $80 billion by 2025.
And here’s why virtual reality is so important for retailers: This latest round of headsets offer merchants a bevy of impressive new ways to share their brand's story with customers. Retailers are clamoring to experiment with this immersive, three-dimensional world as a means of standing out from the competition, attracting new customers, and boosting sales.
Some merchants are already seeing its potential as a handy tool to help them build more immersive retail experiences. Early adopters have the novelty of creating simulated experiences on their side—such as virtual fitting rooms—which helps capture the curiosity of both potential customers and the media.
Amid the onslaught of branded messaging today, companies revel at the possibility of their target audience having “alone time’’ with their brand in, quite literally, another world.
However, there’s a lot to be learned about how virtual reality, still in its early days, can be used to influence customer behaviour. But a few retail pioneers are exploring what approach works best for their brand — and here are a few examples of how retailers are experimenting to help you decide if VR is worth exploring for your business.
Creating an Emotional Connection
What better way to give your customers lasting warm fuzzies than immersing them in the world of a boy and his favorite stuffed animal?
UK-based department store John Lewis used Google Cardboard to bring a beloved character to life in a recent holiday campaign. “Monty’s Christmas” is about a young boy named Sam and the relationship with his best friend, Monty the Penguin.
As part of a larger omni-channel campaign, John Lewis built on the concept of the child’s imagination. They created an experience called Monty’s Den in 41 stores that let both children and adults explore the story of Monty and Sam through a virtual reality headset (branded Google Cardboard headsets attached to Android smartphones). An accompanying video received 12 million views online in only three days, and the overall campaign increased sales by 5.5% over the holiday period. Having left a lasting impression, shoppers will be sure to drop in and check out what John Lewis has in store for them this holiday season.
On the other side of the spectrum, outdoor apparel company Merrell played to their customer’s fear and excitement with the first virtual trek at last year’s Sundance Film Festival. The 30-year-old company wanted to tap into a younger pool of thrill seekers with an exhibit called “TrailScape” to launch their Capra hiking boot.
The 5,000-square-foot activation was a 4D, motion-tracked, multi-sensory experience that simulated extreme landscapes like wobbly bridges and landslides using an Oculus Rift headset. Motion-capture technology placed adventurers in scenarios they wouldn’t typically encounter on a hike, which often drew squeals and shouts from visitors.
Over the course of four days, more than 750 people lined up for hours to take the trek. Merrell’s social engagement spiked by 859%, and 4,000 shoes were purchased on Merrell.com following the campaign.
Easing the Buying Decision
What happens when retailers can ease potential buyers into purchases, even if they can’t physically interact with products? Retailers who require more consideration or investment on the part of their customer can use virtual reality to make shoppers feel comfortable by removing the obstacle of an immediate commitment.
eBay Australia has partnered with retailer Myer to launch the world’s first virtual department store. The pilot project blurs the lines between online and in-store experiences and gives shoppers a glance into the future of retail.
Using a Google Cardboard headset, shoppers “enter” the department store to view more than 12,500 items and buy them online. Using a virtual reality viewer called a “shoptical”, users can peruse 3D images of products and explore the different features, colors, and materials that make up the familiar physical shopping experience.
eBay “Sight Search” lets users browse, sort, and engage items of interest by looking at an object for a few seconds. With time, the algorithm becomes more intelligent and personalizes the product selection based on past experiences, which aims to spark an increase in sales and customer retention.
This technology has the potential to drive up online shopping volumes by removing the hesitation often experienced when there is no physical interaction with a product. It will also give eBay invaluable data on what catches the customer’s eye and how they browse in a pseudo-physical space. The company will roll out the virtual reality department store in other regions based on the results of the Australian pilot.
In other cases, consumers may hesitate because of the high sticker price on a product or service. For example, In the world of travel, booking a trip can involve a lot of research and guesswork, especially when considering the financial commitment. Imagine being able to experience a taste of a travel destination before committing to the cost?
Thomas Cook, a travel industry pioneer, partnered with Samsung Gear VR to give potential vacationers visiting flagship stores in the UK, Germany, and Belgium the opportunity to explore a series of virtual holidays.
The company created 360-degree virtual reality films depicting content captured over several months from Egypt, Cyprus, Greece, New York, and Singapore. Travelers were able to experience a heli-tour in Manhattan or a visit the awe-inspiring Egyptian pyramids without leaving the store. To complement the in-store experience, Thomas Cook created an app on Android and iOS where users can use Google Cardboard headsets to view all of the content from home.
In addition to interest from the media, the “Try Before You Fly” experience generated £12,000 (about $15,600 USD) in flights and hotel bookings in the UK, a 40% return on investment in Germany, and a 180% increase in sales for New York excursions.
Building an Intelligent Testing Environment
Retailers understand the time and cost associated with concept testing in their stores.
Despite being a disruptive exercise at times, physical testing is necessary as the demand for more personalized shopping experiences continues to rise. Combining virtual environments and shopper analytics to optimize store layout, marketing displays, product packaging, and the customer journey is becoming part of intelligent retail planning.
Virtual reality provides an opportunity to accelerate testing, planning, and decision making in an effort to become more customer-centric and keep them coming back for more.
Smith Brothers, makers of the first cough drops in the U.S., used a virtual store to test a new product and packaging prior to launch. The new daytime and nighttime cough drop was slated to increase sales and distribution in drug store retailers.
The company partnered with InContext Solutions to design a virtual store to validate the new packaging and gauge expected performance of the new product. The result of the test revealed a crucial disconnect between customer perception and what the product packaging was communicating. A heat map showed the new product failed to grab shoppers’ attention on the shelf.
Photo credit: Smith Brothers
Equipped with this information, Smith Brothers was able to improve their product before incurring the cost of taking it to market.
Is Virtual Reality Right for Your Business?
You may feel tempted to jump into planning with both feet after reading how companies like Thomas Cook and Merrell are experimenting successfully with virtual reality. And while mainstream devices are making VR more accessible to you and your customers, it’s best to hold off on calling that emergency whiteboarding session until you consider how it can drive value for your business.
Take a deep breath and start by asking yourself these three questions:
Am I familiar with this technology?
Yes, you’ve read a library of articles (including this one!), but there’s no substitute for experiencing it yourself. What are the capabilities and limitations of VR? Consider the hardware and data required to provide the seamless experience expected from this technology. You may need to hire a resource (like a consulting firm or digital agency) familiar with the virtual world. Google and Facebook are developing entire departments dedicated to this channel. To start, grab yourself a Google Cardboard viewer and play around with some of the apps available.
How can my business benefit from this technology?
We’re seeing more and varied examples of the ways businesses are using virtual reality: brand storytelling, removing barriers that impact the purchasing decision, and improving the retail planning process. How does this technology tie into your current and future goals? Examine whether it’s ideally suited to streamline internal processes like training new staff, collaborating with remote teams, or testing new product prototypes. Perhaps you’re looking to set yourself apart from the competition by extending exclusive events to key customers or showcasing products. Whichever it is, take time for a gut check to ensure the potential return is worth the investment.
Does this make sense for my business?
Answer this question from both a business and customer perspective. Is your business prepared to handle a campaign that makes full use of artificial environments? The rules in this space have yet to be defined and require some testing. Do your buyer personas indicate that your customer base would respond well to a high-tech VR campaign? Before leveraging VR’s unique capabilities to create an immersive experience, ensure that it will resonate with current and would-be customers.
The Reality of Virtual Reality
VR is an adaptable technology with endless potential, and we’ve only scratched the surface. It’s important to not only consider execution, but the insights artificial environments can unearth to help you create a smarter business.
The reality is that once you’ve committed to playing in the virtual space, be prepared to push the envelope. What you expect today might be reinvented tomorrow!
About The Author
Jessica Bianchi is the Manager of Online Content at Canada Post. When she isn't helping brands build their online presence, her interests span content creation, user experience, analytics, and all things digital.