The Retail industry is now standing at the cusp of evolution: Retail 4.0, a term that signifies the fourth iteration of the industrial revolution in the retail sector. In today’s hyperconnected world, customers have more than one way to learn about a product or service and can also learn more about the competitors offering the same product. The omnipresence of products and services has become one of the critical areas of competitive advantage, where brands are vying to get customers’ attention. Retaining customer loyalty is quickly decreasing as customers tend to switch to better product/service providers with superior customer experience. So, it comes as no surprise that customer experience is an important business metric to consider and has become a strategic priority for most businesses in the industry.
For retailers to successfully navigate the modernized retail market, strategic planning and adoption of AR and VR technologies are crucial. As the retail landscape constantly evolves, it is imperative to adapt to strategies that focus more on creating seamless customer experiences across digital channels.
The integration of online and physical shopping channels ensures a cohesive and user-friendly approach, which is supported through several key technologies:
Artificial Intelligence and Machine Learning for personalizing customer experiences and streamlining inventory management by analyzing customer behavior and automating retail processes across the journey.
Big Data and Analytics enable retailers to gather and analyze customer data, improving decision-making on everything from inventory to marketing strategies.
Deploying Omnichannel Strategies— online, in-store, or through mobile—will ensure a consistent customer experience across all platforms.
Did you know that 73% of consumers say an excellent customer experience is a significant factor in placing their loyalties with a brand? (Source: PwC)
The demand for self-service options and efficient, personalized services is empowering customers with an arsenal of tools to control their shopping journey. They require quick, seamless interactions in both online and offline shopping. With the right seamless customer experience, brands can not only retain them but also convert them into brand advocates.
For retailers and mega brands, a customer journey contains several touchpoints that determine their experience across pre-purchase research, purchase, and post-purchase stages. In the pre-purchase stage, a customer is influenced by peer reviews, online or physical store decisions, or the design element of the product. In the purchase stage, a customer makes a choice to go through with the purchase or withhold the purchase for a short time. By making several decisions to buy a product and analyzing its features, a customer may feel empowered to make the purchase and would have several levels of confidence if the brand also takes an interest in a customer’s buying journey. Finally, at the post-purchase stage, the customer evaluates whether the purchase has satisfied their expectations; if not, choose any competitor that offers better offers on the same type of product.
This is where AR/VR steps in. VR refers to the creation of a computer-generated virtual world. AR, on the other hand, augments reality with computer-generated objects enriched with digital visual elements or sound.
Personalization takes a new form through AR in retail companies, as is expected by today’s customers. The demand has pushed retailers to explore new avenues to retain their focus on brands.
According to an industry survey, 60% of customers look for tailored engagement based on their previous purchase history, and 70% expect brands to personalize engagement to suit personal needs through their search experience.
There are several aspects where Augmented Reality can create new avenues of shopping for customers.
AR Solutions offers customers the ability to visualize how products will look on them or in their homes without the need for physical interaction. With AR, shoppers can use their smartphones or in-store screens to superimpose clothing and accessories onto their live image. This way, customers can see how the items look and complement their personal style.
H&M, a multinational clothing company, has created AR solutions through which customers can create holographic images of themselves, view the garments in great detail, and experience shopping in a unique way.
In the case of home furnishings, the IKEA Place app allows customers to use AR technology to see how a piece of furniture, such as a sofa or chair, will look in their homes. This move surged IKEA's customer retention and is a prime example of why retailers should adopt AR VR to elevate their customer experience.
These virtual experiences increase customers' confidence in their purchases, reduce the likelihood of product returns, and offer unparalleled convenience, resulting in increased sales.
AR VR in Retail Industry can redefine in-store experiences with interactive product displays that provide more than just a visual representation, along with more in-depth knowledge about products and promotions. Retailers are integrating AR-enabled screens and mobile apps to provide product feature insights, customer reviews, or instructional videos, turning a simple display into an interactive learning hub.
eBay and Myer store launched their VR department store, where an interactive display provided customers with an experience of the products in the 3D format, like moving around or zooming in to have a better look out for the said product.
Customers can also unlock deals or rewards through interactive content, resulting in a gamification approach to interactive displays. This increases foot traffic and store visits.
Retail stores are deploying AR markers in their offline sales locations. These markers help customers identify their position or location inside the store using location-based services such as GPS and visual recognition. With a dedicated AR-based mobile store app, customers can receive the location of a particular product instead of searching for it in every aisle.
AR overlays digital information, such as directional arrows packed with product details, offers, and promotions, onto the aisles or products in a real environment using a mobile camera. This move enhances the customer experience, as customers can save time and shop faster. It further helps businesses better engage with customers, promote specific products, and offer loyalty status based on shoppers’ locations or preferences.
Retail giants like Walmart and Kroger have AR navigation apps that enable shoppers to compile their shopping lists and get AR-guided navigation within the store.
Retail stores often face the struggle of a shortage of staff compared to the number of customers seeking assistance. With AR shopping assistants acting as virtual guides, retail businesses can overcome staff shortage issues or disgruntled customers due to lack of attention. Customers can integrate these assistants in their mobile apps or through in-store devices and make more informed purchasing decisions. With AR-enabled devices, customers can view product details reviews with the help of assistants who also facilitate virtual try-ons.
AR/VR in the retail industry also helps employees take training in a virtual environment. Through encased VR glasses or AR mobile apps, employees can learn about product placement, simulate communication with customers, and de-escalate a situation through a given script for more seamless training.
Walmart, for example, has employed VR for its employee training purposes and equipped its staff with immersive training and skills retention, which has resulted in higher satisfaction rates and reduced training time.
AR systems allow for real-time barcode scanning, indoor navigation, and seamless data integration. Employees can check the management stock of goods and inventory in a chaotic warehouse. This type of immersive training can enable staff to aid customers through the entire purchasing journey with in-depth knowledge, connecting them with the right products.
With the creation of virtual stores, customers can explore the replica of a store from the comfort of their own homes, complete with interactive displays to browse products and make purchases in a new way. Using VR headsets, customers can enter a fully virtual store where they can shop similar to a physical store. Retailers can leverage this unique opportunity to showcase their brand’s experience and engage with customers on all channels.
Virtual stores break down geographical barriers, enabling retailers to reach a global audience and customers to shop with the store’s replica and ambiance as if they are physically present.
AR and VR in the retail industry enhance the overall customer experience through interactive and immersive product demos that nudge customers to make informed decisions across all channels. Predictive analytics are being used for demand forecasting, which, coupled with data-driven insights, will enable retail brands to create highly personalized shopping experiences, predict demand patterns, and recommend products and services tailored to individual preferences and histories.
AR and VR solutions are important in opening the doors for brands to move towards sustainability, including sustainable sourcing, packaging, and supply chain management. Retailers are employing data analytics to assess their impact on the environment and continuously improve.
With Augmented Reality Solutions, retailers can enhance a company’s brand awareness to wider audiences through mobile apps and top-of-the-line AR features to leverage marketing strategies in the competitive market. This results in longer loyalty to the brand and eventually word-of-mouth marketing as loyal customers.
Increased customer satisfaction leads to a low return rate. With an arsenal of AR VR solutions like virtual showrooms, tours, fitting rooms, and more, a customer’s journey is well-thought-out and thorough. Furthermore, personalizing the shopping journey makes customers' experiences more positive compared to a traditional retail store visit.
As AR and VR continue to evolve, there are several other technologies that not only enhance customer experiences but also pave the way for future developments, revolutionizing the way customers shop in retail stores.
AI algorithms can analyze vast amounts of customer data, including shopping history, preferences, and behavior patterns. By integrating the data with AR and VR, retailers can create highly personalized experiences for individual needs.
Machine Learning models can predict future trends and consumer demands by analyzing historical data and real-time inputs. Retailers can use these insights to create targeted marketing strategies, anticipate customer needs, and more.
The rollout of 5G technology is a significant catalyst for the widespread adoption of AR and VR in retail, as 5G networks offer significantly higher data speeds, enabling seamless streaming of high-quality AR and VR content. The enhanced capabilities of 5G allow for more sophisticated and engaging AR and VR applications, leading to richer customer experiences. Retailers can leverage these advancements to attract and retain tech-savvy consumers who seek cutting-edge shopping experiences.
The global AR in retail market size is projected to grow at a CAGR of 41.4% from 2022 to 2031, and the global VR market size is expected to grow at a CAGR of 27.5% in the same period.
(Source: Grand View Research)
As retailers explore Retail 4.0 further, it is becoming increasingly clear that AR and Virtual Reality Solutions are becoming the foundational technologies reshaping the future of retail. These immersive experiences become the norm as consumers' expectations evolve accordingly. Going further, AR/VR is going to provide the capability of blending the real world with immersive elements to make shopping more interactive, personalized, and enjoyable than ever before. Retailers need to invest in these technologies to get ahead in the competitive market and allow customers to enjoy their benefits and for businesses to leverage opportunities as they present for innovation and growth.
In the search for a reliable partner in AR/VR exploration, it can be a little overwhelming to understand where to start. Novac Immerz, a leading immersive content solutions provider, aids businesses in their digital transformation journey. Novac has a suite of AR, VR, MR, XR, 360° videos, and Digital Twins solutions and services to create an interactive storyline and simulated environments. We can help retailers embrace these technologies to be well-positioned to lead the way in Retail 4.0, creating exceptional experiences that resonate with customers and drive long-term business success.
Shanavaz, AVP, has a distinguished career and is a leading subject matter expert in the evolving landscape of AR/VR and eLearning Content Development. At Novac Immerz, the AR VR Development Company, he has played a pivotal role in launching the AR/VR business with a team of forward-thinking professionals to harness the potential of Augmented and Virtual Reality Solutions to address complex business challenges and more.
With extensive experience in roles as an inspiring trainer, meticulous designer, strategic marketer, and innovative builder, Shanavaz has consistently been at the forefront of technological innovation.
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