AR and VR in retail: do shoppers buy the hype?

Close your eyes and picture the “future of shopping.” Did you envision a customer wearing goggles, head back and hands waving in the air? Be honest…

Virtual reality (VR) is projected to generate $1.8 billion for retail and marketing by 2022 and its baby cousin augmented reality (AR) already hit $3 billion in 2018. With ecommerce poised to become mobile AR’s largest revenue stream, 32% of brands and retailers plan to use AR or VR within 3 years and 45% believe AR and VR has the most potential to amplify their customer experience.

Augmented reality is particularly attractive thanks to lower costs and (relatively) easy integration with mobile apps. And consumer research suggests shoppers dig immersive experiences:

• 71% of shoppers would shop with a retailer more often if it had AR
• 61% of shoppers prefer retailers with AR over those that don’t
• 55% think shopping with AR is fun
• 68% would spend more time in a store with AR
• 71% would return more often to a store with AR
• 40% would pay more for a product they experience through AR
• 72% have made impulse purchases because of AR

While these stats are impressive, what customers say they want and what they actually use doesn’t always sync up. Novelties like virtual and augmented reality are particularly vulnerable to “one-and-done” behavior -- the “cool factor” is not enough. A recent survey of over 1000 consumers by Elastic Path reveals 56% of shoppers feel VR has received too much hype in retail, and 38% say the same of AR.

Before you add AR or VR to your digital experience strategy, consider the following:

Know your customer

Too often, shiny objects like AR and VR are adopted as innovation for innovation’s sake. A digital agency, creative CMO or other visionary builds it without consulting customers or building a solid use case.

Magic mirrors, for example, make for great press releases but fail to impress actual shoppers. Even Macy’s admits customers check out their mirrors without checking out through them.

Most customers (even your “sci-fi shopper” segment) would rather technology help them shop better and quicker than simply “engage” with a novel digital experience. Many are already using mobile phones in-store to access additional product information, reviews and cross-channel inventory. Image recognition paired with AR content can help in-store shoppers bypass clunky and complicated mobile navigation and hit-and-miss site search, or help online shoppers visualize products in real-world context.

Once you’ve closed your basic experience gaps (and if you have the budget) look for where lost revenue can be recovered through AR or VR. Lowe’s estimates $70 billion in home improvement projects are stalled because customers can’t picture the end result, so they built a suite of visualization tools to close the gap. They also understand do-it-yourselfers buy more when their educated and can safely learn how to use products such as power tools in a safe, virtual environment.

Image: RoadtoVR

Be realistic about artificial reality

AR and VR are not new, and in retail/ecommerce projects tend to land in one of two buckets: virtual try-on and see-this-item-in-a-physical-space.

For home furnishing and home improvement, the latter is approaching “table stakes” (pun intended) as nearly every major retailer has an AR experience, including Home Depot, IKEA, Lowe’s, Pottery Barn, Amazon, Build.com, Wayfair, Target, Houzz, Sherwin Williams and Macy’s. Seeing products “in context” builds confidence in a purchase and can reduce returns -- especially valuable for products that are heavy and costly to ship back or return to store.

Image: Bloomberg

Virtual try-on for apparel, shoes, jewelry and cosmetics, however, may actually increase returns by creating false confidence.

Browsers and mobile cameras rarely reflect true-to-life color, and may be misleading when trying to match fashion items to skin tones and personal preferences. Footwear may look slick through an AR app, but actual fit makes or breaks a sale for all but collectors. Fabrics feel and hang differently, and flatter and fit (or don’t) depending on variables that can’t be discerned through even the slickest digital overlays.

Image: Ardev.es

While many of today’s apparel try-on apps can collect accurate body measurements (even from a selfie), the problem lies with product data. Brands and retailers rarely (if ever) take as detailed measurements consistently across garments -- it’s simply too time consuming. A standard sizing chart is as accurate as any AR technology until this changes.

One try-before-you-buy use case that has stood the test of time is eyewear, where color and “fit” are less important than getting a feel for a style. Get Elastic covered EyeBuyDirect's Wall of Frame over a decade ago. The virtual mirror has since been adopted by other eyewear brands and merchants with success, including Glassesdirect.co.uk (below) and Warby Parker.

Will it stick?

To succeed, your AR or VR project must add value to the customer -- be it entertainment, education or utility -- and spur either a purchase, a repeat visit or positive brand impression. Research suggests customers are keen to explore brands’ and retailers’ apps and installs, but the risk is customers quickly tire of features that don’t add consistent value. To avoid falling in the “hype trap,” ensure your project is designed to meet actual customer needs, truly solves a problem, or addresses a real source of lost revenue.