Using a map and asking for directions, getting an answer to a question from books in a library, writing a paper on actual paper: these are all examples of things your (grand) parents tell you of how life used to be when they grew up. You probably can’t imagine that going to a store to buy a product is something we will be telling our children and their children in the future. Could virtual reality (VR) prove you wrong?
Even though it’s expected that Virtual Reality won’t be adopted by the mass within the next five years or so, big companies like Google and Facebook expect it to be the next big thing. Facebook for instance, paid $3 billion to take over Oculus, an American Tech-company specialized in VR, and plans to invest at least another $3 billion in the upcoming technology over the next decade (Matney, 2017). Assuming it will be that next big thing in the nearby future, VR will be changing a lot of things we do in daily life, including shopping.
One of the reasons for this possible takeover is the ability to try products at home (virtually). Something current e-commerce can’t deliver and crucial for a lot of products, such as clothes, televisions and shoes. It’s not surprising 35% of the people want to shop more online if they would be able to try products virtually (Cardew, 2016). Take clothing for example. You can try them on while you’re at home and AI-assistance can better fit to your personal taste than a shop assistant. Lighting can be perfectly simulated, as well as a setting to try the clothes in.
Next to that, it will become the shopping experience with the least friction. Less friction in the customer journey will end up in more sales (Price, 2016). Think of it: you put on your VR headset, you can try whatever product from whichever retailer in the world and there are no waiting lines for either a dressing room or for the counter; meaning you can pay immediately. If you combine that with the drones Amazon is developing, which will be able to deliver within 30 minutes (Johnson, 2016), there is hardly any friction left to think of.
Of course, one could argue traditional retail will remain alongside the future VR channel. Even though VR is able to simulate products around you, it’s still a simulation. It’s not reality. VR will never be able to simulate the sound a specific stereo will play, let alone distinguish the sound from substitutes.
Next to that, shopping is something people love to do. It’s not only the product you buy, it’s also the process of buying it, which probably can’t be fully captured in a simulation.
Finally, there are lots of products people won’t need to try before buying, such as groceries or books.
So, future generations might not be laughing at the idea of going to an actual store to buy something, but they probably will still be amazed by the fact that we are going out for shopping so often. It’s arguable that high streets in big cities will be less taken over by retail stores in the future. Technology will make it so easy for us to buy products at home, that every retailer of the present will have to adopt it to their business model in order to remain competitive and become a retailer of the future.
Cardew, H. (2016), ‘How virtual reality will change the face of e-commerce’ 21 April 2016 [online], https://www.smartcompany.com.au/technology/emerging-technology/how-virtual-reality-will-change-the-face-of-e-commerce [Accessed on 10 October 2017]
Johnson, T. (2017), ‘Amazon Prime Air: The Evolution of Amazon’s Drone Delivery’ 14 July 2017 [online], https://digitalstrategy.rsm.nl//2017/10/09/big-data-in-retail-its-easier-than-you-think [Accessed on October 10 2017]
Matney, L. (2016), ‘Facebook plans to invest more than $3 billion in VR over the next decade’ 17 January 2017 [online], https://techcrunch.com/2017/01/17/facebook-plans-to-invest-more-than-3-billion-in-vr-over-the-next-decade [Accessed on 10 October 2017]
Price, S. (2016), ‘How Friction Destroys the Customer Experience’ 16 May 2016 [online], https://sessioncam.com/how-friction-destroys-the-customer-experience [Accessed on 10 October 2017]
Thanks Victor for sharing this interesting post about the essence of VR and its future capabilities.
You are totally right about the fact that the landscape of the advertising industry is changing rapidly, due to technological innovations as virtual reality features. I only don’t know if I agree with your statement that “VR won’t be adopted by the mass within the next five years”, since the virtual reality industry is already big business. It is estimated that the market will be worth $5,2bn by 2018 and industry leaders expect that VR will become a core business within advertising, mainly because the experience is unparalleled (Kean, 2015).
The question of online versus offline experience is also an interesting one. More people are going online, but the shopping streets remain busy. In my opinion, even though the e-shopping possibilities are increasing, the offline occurrence of brands will remain in the coming years. It is becoming even more important these days for fashion brands as Ace & Tate to operate an “omni-channel” marketing strategy (Maas, 2017). Therefore, the second article in the reference is an interesting one to read!
References:
Kean, A. (2015). The future of advertising: what will 2025 look like?. the Guardian. Retrieved 20 October 2017, from https://www.theguardian.com/media-network/2015/feb/16/the-future-of-advertising-what-will-2025-look-like#img-1
Maas, W. (2017). Ace & Tate wil excellente omnichannel-speler zijn. MarketingTribune. Retrieved 22 October 2017, from http://marketingtribune.nl/design/nieuws/2017/10/ace-tate-wil-excellente-omnichannel-speler-zijn/index.xml
Hi Victor,
Interesting article! I agree that the retail industry could be changed tremendously by all these new technologies and that shopping will never completely disappear because people like to do it. However, when you talk about trying on clothes for example I believe you confuse virtual reality with augmented reality. Augmented reality shows you the real world, so you as a person with computer generated graphics over that, which would be the clothes you are trying on. Virtual reality replaces the whole real world with a simulated one. Which could still be used to mimic the shopping experience of walking through a store and picking out clothes or shoes however.
Hi Victor, really good blog post and really interesting topic.
You make some interesting points. I agree with you that VR and the drone delivery will be the thing that is going to approximate traditional and online retailing to the point where they became almost the same. I also believe this futuristic way of shopping is not so near because, as you mention, people love shopping for the experience and they still want the best of both worlds (online and traditional retailing). One think I believe it supports this point is the fact that big online retailers like Amazon and Alibaba are implementing a new strategy of O2O (online to offline) by acquiring physical stores. They understand that the consumer still wants online and brick-and-mortar locations, they want choices, experiences and personalization.
However, I don’t agree with you on fact that the simulations will probably never fully captured the shopping experience. In my opinion they probably will probably do. What I think will make traditional retailing always present is the fact people many times go shopping not with the intent of buying something but just to leave their houses and go enjoy themselves. Let’s see what happens in the future and hopefully will be here to see the technology advancements in this industry. Once again, really interesting topic and post!
Hi Victor,
Very interesting take on the adoption of Virtual Realtiy in Retail and the potential implications of this.
I’m curious though. We’re starting to see big internet brands like Amazon coming out with their own actual brick and mortar “bookstores”. Ironic since they drove most bookstores out of business – but it makes you wonder. Surely they see some sort of value with interacting with customers face-to-face in order to make such a bold move.
Taking this in mind, do you still think VR would completely replace brick-and-mortar retailing? Or is there a possibility that we will start to see a new kind of brick and mortar retail space enabled by these kinds of technologies?
https://www.theguardian.com/technology/2017/may/26/amazon-new-york-bookstore