New consumer experiences merge realities
Technology and proven business models are being combined to ensure convenient and meaningful retail shopping
Shopaholics around the world in the past few years have enjoyed increasingly convenient lives. As competition becomes fiercer for an ever diversifying range of products, retailers are looking for more creative, quicker ways to engage with their customers.
The battle that physical retailers are fighting against online giants is increasingly daunting, and social media marketing and digital branding have played a large part in keeping the fight for brick and mortar alive up till now.
However, there are new powers at play. China has been the world leader in experimenting with emerging technologies, such as augmented reality and virtual reality, as the latest artillery pieces in this massive economic game of thrones, which was worth $25 billion on Singles Day last year.
So what is the difference between AR and VR, and why do they have the power to potentially tip the balance back in favor of shopping centers and high-street retailers?
Virtual reality involves a computer-generated environment accessed through a headset, by which the customer is fully immersed in a new world — for example at an exciting music concert or a relaxing holiday on the beach. Augmented reality, however, does not obstruct or replace the view or existing surroundings of the consumer, but instead merges the view of the real world with computer-generated graphical content, for example showing what an item of clothing would look like on you without having to actually wear it before purchasing. Pokemon Go mania in 2016 and the acceptance of AR with indiscriminate open arms showed retailers around the world the power that such technology could have on the way we shop.
While a few companies in the United States have been slowly experimenting with integrating AR and VR into the shopping experience, China has been blazing full steam ahead. At the end of last year, a survey by Worldpay indicated that 95 percent of Chinese respondents had had experience with using VR or AR in the previous few months. A further 84 percent agreed that the technology was important to shaping the future of shopping. Chinese millennials are rapidly growing comfortable with new technologies and are willing to experiment with it in their retail experiences.
One such shop that Chinese millennials are flocking to is JD.com. To bolster offline brick and mortar sales, AR technology has been rolled out this year in a bid to integrate online and offline shopping experiences for mainstream technophiles. Several AR-powered products have been used, consisting of a variety of makeup and dressing mirrors as well smart glasses. The ability of customers to rapidly decide whether the product is right is vital to stay ahead in the fastmoving world of high-street fashion.
For example, the 3D virtual fitting room gives shoppers the ability to try on clothes through a customized avatar matching their hair, face and body dimensions. These store features will quickly allow users to engage in multiple interactive experiences, by which they will then be able to find the right products online. It may seem counterintuitive to walk to the store only to then purchase the product online, but consumer analytics indicate that the experience of physical shopping is enough to entice buyers if the experience remains creative and engaging.
China’s mixed reality is fast spreading across the retail universe. This is in part thanks to the support of the government in its 13th Five-Year Plan (2016-20) for the economy, which has invested in research and development in the area. National competitions and conferences for AR and VR are frequent, and these enjoy a relentless stream of subsidies and incentive programs to ensure that the technology takes off. JD’s use of AR technology increased the conversion rate of purchases to 9.6 percent earlier this year, before steadying to a maintainable 7.5 percent.
Keen to avoid the 2016 boom and bust of VR technology in the West, these ventures are combined with proven business models to ensure that the VR and AR groove runs deep into the fabric of the retail experience of tomorrow.