How Virtual and Augmented Reality Will Reshape Retail

 *This article was published in contribution to the new frontier of Intelligent Reality (IR). Click here to learn more about the 2022 IEEE 2nd International Conference on Intelligent Reality (ICIR).


Any retailer needs sales, and sales come from enticing customers to buy a product. But a perennial challenge for any retailer is how to display their products so that customers will buy them. One the one hand, consumers will only buy a product if they are aware of it and have seen it. On the other hand, physical floor displays are expensive to create and maintain. They are also fraught with challenges. Imagine your primary business is home decor. The individual items you sell may be compatible with a wide range of design styles. But will a fan of modern minimalism respond to a shabby chic display? Probably not. Simply by placing your product in some form of context, you could dissuade some buyers from making a purchase. Then there are logistical challenges, such as large items, or items with many variants? Can you really afford to have all 20 colors of couch available on the shop floor? Most likely not.

Traditionally, the retail market has worked around these challenges using techniques such as catalogs, product brochures, or in-home trials. But the simple truth is that a catalog or brochure cannot fully convey a product. You cannot judge how a specific couch might fit in your own home from a 2D photo on a printed page. In-home trials solve this problem, but they are incredibly expensive for the retailer, and many customers will object to non-refundable deposits that would cover the expense.

Extended reality, in the form of virtual and augmented reality, offers a new and exciting alternative. Virtual reality (VR) can be used to show any product in any virtual environment. The user can easily explore product variants and see the product in different surroundings. One of the first major retailers to explore VR was Ikea, with their VR Kitchen Experience app. The app allowed customers to explore three life-size kitchen settings, giving them the ability to change cabinet and drawer colors. Users could also change perspective to approximate the experience of using the kitchen as an adult or a child.

Augmented reality (AR) can be used to show a virtual version of a product in a real world environment. A single retail display area can be used to display a near infinite variety of virtual shopping options. Augmented reality can also be used in the consumer’s own location rather than the retail store, allowing consumers to see what a product would look like in their own real world home or office.

In addition to de-risking the shopping experience for customers, virtual and augmented reality combine all of the convenience of online shopping and virtual shopping with the advantages of a retail experience. Read on to learn more!


How retail works in virtual and augmented reality

For retail companies, Augmented Reality and Virtual Reality offer different opportunities. Both provide immersive experiences that can enhance any retail brand. Both can also be deployed in a retail store, or in online retail. Whether via a web browser or mobile app, virtual reality marketing and, or, AR solutions can enhance the customer experience. There are also emerging applications for artificial intelligence to help consumers navigate virtual, augmented and real-world commerce.

With virtual reality, the customer is fully immersed in a virtual and immersive experience. This enables novel experiences that would not be possible in the real world. For example, imagine a virtual car showroom. A small retail store could be home to an almost infinite array of virtual vehicles, with digital models of every conceivable variation in color, materials and accessories. What’s more, the experience could demonstrate exactly how anti-lock braking, airbags or other safety systems work without any risk on the part of the consumer.

With Augmented Reality, the virtual product is shown in real world surroundings. Augmented reality technology allows a 3D object to be realistically placed in any real world environment. Like virtual reality, AR technology can display an almost infinite array of product options, but unlike VR, augmented reality will place the object in the context of a real environment. Imagine a furniture store with an AR solution. Customers could select any style of couch, choose from all of the available options for materials and colors, and place each variant in their own living room. The effect will be a realistic rendering of the final product, at the correct scale, in the customer’s own home.

The potential impact of these technologies is enormous for retail companies, from a small retail store to a major retail brand, and especially for any companies with online retail. Literally every possible version of every product can be experienced by a potential customer in a highly relevant context. It is hard to overstate the opportunity for positive impact on the customer experience, but early studies have shown vast improvement in customer engagement and involvement.


Latest virtual and augmented reality developments that are changing the retail industry

Digital Transformation is everywhere, and retail is no exception. The shift towards eCommerce was well underway before its acceleration due to the COVID-19 pandemic. Tools like 5G and IoT, can be combined with immersive technology like AR VR and extended reality to deliver something truly novel. IoT devices and advanced connectivity like 5G can be used to streamline manufacturing and supply chain operations. But it can also be used to enhance retail store experiences. A virtual showroom application can be automatically triggered by an IoT sensor that detects a potential customer. AR solutions can also take advantage of data from connected sensors. Both types of immersive technology can be bolstered by ensuring that what the customer is looking for is readily available simply by using the very latest inventory data.

Most augmented reality and virtual reality experiences for retail simply enable view-in-room (or view-on-person) and try-before-you-buy experiences. While this may seem like a trivial use case, it represents two of the most logistically challenging problems for traditional retail. Shipping real goods is expensive. Real products are often damaged during delivery or use. Many customers may want to try several different products before they make a purchase. All of these issues would place a crippling burden on most retail operations, which is why you typically only see try-before-you-buy offers for premium goods.

Companies like Nike have used augmented reality and virtual reality in their physical stores, not only to show a larger range of inventory and options, but to tell a more detailed story about their products. In Nike’s case, they showcase the steps in their supply chain so customers can understand how and where products are made. Similarly, Toms, the shoe and apparel company, uses virtual reality to transport customers to Peru where they can see the impact of the company’s philanthropic efforts.


Accessibility in retail with virtual and augmented reality

When talking about accessibility, it is important to differentiate between accessibility in the sense of access to products, and accessibility in terms of making a product, service or experience usable by as many people as possible.

It is abundantly clear that augmented reality and virtual reality enhance the customer experience by providing access to a near infinite library of products in all of their variations. Whether customers use AR glasses, an AR app, or a VR headset, the accessibility to a retailer’s product range is unparalleled. Customers can pick and choose between thousands of options at relatively little incremental cost to the retailer. This type of accessibility is simply not possible without augmented reality and virtual reality. The sheer range of products that can be deployed in a virtual fitting room, virtual showroom, or AR solution is literally limitless.

As already discussed, augmented reality is particularly powerful for customers as it enables a true try-before-you-buy opportunity, often in the customer’s own home or workplace.

Virtual Reality and Augmented Reality can also offer advantages in providing inclusive access to retail experiences. Many retail spaces are poorly designed in terms of accessibility. Individuals with impaired mobility, sight, or hearing, or those with cognitive difficulties, are rarely considered in retail store layout. Accessibility can be greatly improved by offering comprehensive virtual reality or augmented reality solutions that are built with accessibility in mind. As autonomous systems become more common in retail, new approaches to improving accessibility may well emerge.


Future of the retail industry with virtual and augmented reality

What can the retail industry expect from virtual and augmented reality in the future? The most obvious answer is ever broader adoption. As augmented reality and virtual reality become more commonplace, more affordable, and better understood, their use in the retail industry will grow. Online shopping is likely to evolve and change rapidly as virtual shopping becomes commonplace. The entire retail sector is likely to be transformed, just as it was transformed by eCommerce.

There may also be new opportunities for small business owners as they learn how to use virtual reality and augmented reality to enhance the shopping experience and drive customer loyalty.

Augmented reality and virtual reality can solve some of the biggest challenges in retail business. They provide the opportunity to offer a near limitless array of products without the constraints of the cost of physical space, shipping, and delivery. But the retail industry can go further. In addition to enabling vast choice and try-before-you-buy, retailers can share more of their unique stories and experiences directly with customers. As consumers become more comfortable with the use of augmented reality and virtual reality in retail, demand will increase, and so will innovation. Within the decade, extended reality shopping will most likely become commonplace, and new and exciting applications of intelligent reality will emerge.


2022 IEEE 2nd International Conference on Intelligent Reality (ICIR)

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