Virtual Reality: The Potential Impact on Commerce

When it comes to virtual reality (VR), the retail market is finally getting its footing. Many believe v-commerce has the potential to become “the next major disruptor” in the retail space, with companies like Tommy Hilfiger, eBay, and Volvo banking on its potential for enhancing the customer shopping experience. Whether searching for a shirt, car, or home, it’s clear that VR has the potential to make decision-making faster, easier—and more exciting—for the world’s consumer base. The only thing that isn’t clear: whether a technology that provides unnecessary “icing” on today’s digital shopping experience will actually be worth the hype. Below, I share some of the benefits and drawbacks of VR in the retail space.

It Makes Life Easier
Eight in 10 Americans already shop online. Imagine how satisfying it would be to know exactly how the product fits and feels before you even add it to your online shopping cart. At the basest level, VR makes that feeling of instant gratification a reality. It can reduce the stress of shopping online because it offers an added level of reassurance in the purchases one is making. It can even help those with social anxiety enjoy a “real” shopping experience, which they may be missing, by allowing them to shop from the comfort of home.

It’s Scalable
It’s one thing to try on clothes and shoes through virtual reality. But what about trying out a new car or house? One company, Halstead, is already doing that. By introducing 3-D displays and VR headsets into its offices this past year, it is turning the real estate buying process upside down. For the first time, it’s possible for buyers to see and explore their dream homes without even leaving their home or office. This is especially helpful for those relocating, where flying into town each time a property becomes available would be challenging. What’s more, VR can help builders market in such a way that they can find buyers while new buildings are still in the design phase. Prospects will be able to see the exact view from their bedroom window long before the foundation even sets.

It Enhances Your Brand
VR can help companies “transport customers into the heart of their brand” through sense, smell, and touch. And it works. One recruitment campaign for the U.S. Army, for instance, reports a 65 percent increase in applicants on days VR was used.

It Offers LOTS of Data
VR works hand-in-hand with other new technology like Big Data, machine learning, drones, and gaze control to offer your company a wealth of information about customer buying habits. Imagine knowing exactly where customers look when they first come into your store … which objects they touch, and how long they spend before choosing to purchase it.

It Will Expand Our World—And What We Sell In It
Topshop recently enabled a few lucky customers to experience its autumn / winter catwalk at Fashion Week through VR. These lucky few were able to rub elbows with big name celebrities and experience exactly what it felt like to be at the high-profile event. Imagine if artists starting offering the same experience, marketing “VR” access to their concerts, the filming of movies, or other star-studded experiences. Not only would it widen their potential audience pool, it would offer their fans a much richer, memorable experience than seeing a show from the theater or stadium.

So—VR sounds amazing. What could possibly be the downside for VR in the retail market? The following are just a few things to keep in mind when implementing a VR strategy in your company.

It’s Expensive—For Companies and Customers Alike
Fifty-five percent of those surveyed said that VR could impact their buying decisions, but at the moment the cost of purchasing a VR headset might prevent them from trying. Most Americans today do not own VR goggles, and the price of creating VR experiences is staggering. Just one of Halstead’s virtual property tours (noted above) costs a whopping $100,000 to make, and months to build. That means SMEs—and low- to middle-income people—could be priced out of the VR game, at least initially.

It’s Not Necessary
Although VR clearly makes shopping more fun and exciting, it is not actually needed to keep the retail market going. As noted above, most Americans are already shopping comfortably online. At most, VR offers a way for companies to connect more deeply with their consumer base and draw in early adopters curious about the VR experience.

It’s Not Perfect
Many VR head sets are still not completely glitch free. Some cause dizziness and nausea, which is not ideal in ensuring a positive customer experience.

All of that said, VR’s promise for the retail market is huge as we look forward. It’s been predicted that 200 million headsets will be sold by 2020, and the cost and quality will only get better as more industries find ways to incorporate VR into their overall business strategy. And though it isn’t crucial to the retail market (yet), VR does hold tremendous income potential. Sometimes that’s all it takes to be a winner in today’s digital marketplace.

After 12 years of running technology companies including a CEO appointment at the age of 28, I traded the corner office for a chance to drive the discussion on how the digital economy is going to forever change how business is done. I'm an MBA, adjunct business professor and 4x author of best-selling business books including "The Millennial CEO" and "The New Rules of Customer Engagement." Pianist, soccer fan, husband and father, not in that order. Oh and for work...I'm the Co-CEO of V3B and President of Broadsuite Media group, a family of marketing and media agencies that help companies be found, seen and heard in a cluttered digital world. I also give keynote speeches around the world on the topics such as marketing and technology.

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