New technology has a history of disrupting entire industries. It creates new possibilities and shifts in behavior that transform society. And yet, it is difficult to predict how an emerging technology will evolve and if it will be accepted by the majority of people. It is easy to overestimate the future impact of novel technology that generates a lot of initial buzz and excitement (i.e. the Segway). It is also possible that the opposite occurs – where the potential of an early iteration is underestimated or overlooked.
The future impact of Virtual Reality (VR), Augmented Reality (AR), and Mixed Reality (MR), sometimes collectively called XR, has been frequently debated in recent years. While some argue that this technology is over-hyped or gimmicky, others point to its current applications and far-reaching potential.
XR technology has already been implemented in a wide range of industries, from gaming and cinema to training and remote work. In retail, it is being used for three main purposes:
1. Helping customers visualize products
Sometimes it is difficult to picture how a product will look once you bring it home, which creates uncertainty in purchase decisions. Furniture brands, such as IKEA, have recognized that this issue is especially relevant in their category, and are using XR technology to allow customers to visualize how a product looks in context. For example, augmented reality apps show you how a new chair looks as you walk around your living room.
XR technology also enables people to see many different options beyond what is available in a showroom or store. In the automobile category, cars take up a lot of space, so product assortment is limited. To solve this challenge, car brands like Audi offer 360-degree images and virtual test-drives of cars with various colors and interiors. Technology can also create a customized experience of products that do not yet exist, such as in Nike’s Maker’s Studio.
This technology is useful when trying on products (i.e. clothing and make-up) takes a lot of time and effort. For example, “magic mirrors” help customers quickly see how a product looks on them, and they have already been introduced in many retail stores. This technology especially helps online channels where customers are not able to physically try-on products.
2. Offering immersive brand experiences and more information
Immersive brand experiences create stronger brand connections, entertain customers, and make a store or online channel more engaging. With XR technology, the laws of physics do not apply, so fantastical and imaginative environments can be created to delight and entice customers. Entertainment experiences inspired by cinema, rides, and gaming can also be integrated into retail stores to increase brand engagement. Through online channels, XR technology can make the experience of digital shopping more compelling and realistic. For example, Alibaba’s virtual mall allows customers to browse aisles as if they were actually there. XR experiences also enhance a brand’s identity – such as North Face’s VR technology that allows customers to virtually explore iconic natural environments like Yosemite National Park. This experience inspires people to visit outdoor destinations and to think of North Face when they need equipment and clothing for their trip.
3. Providing additional information
Augmented Reality is also being used in retail to provide additional product information. Customers can choose if they would like to learn more by scanning a picture or using an AR app that adds an informative overlay to an environment, which can range from product details, origin, construction, customer reviews, or pricing. Stores that leverage this technology keep their space uncluttered and relaxing while still providing valuable information to those that are interested.
Barriers to Growth
As seen above, XR technology has already been implemented in retail stores to help customers visualize products, provide engaging experiences, and offer additional product information. To continue to grow, there are some barriers to overcome, including hardware, sensory integration, usefulness, and culture.
One challenge is the current hardware required for VR. While most people have their own phone (which works well for AR), not many own a Virtual Reality headset.
To encourage widespread adoption, the hardware needs to be improved and made more accessible. Currently, the technology can cause motion-sickness and is often perceived as intimidating, complicated, and expensive. Public use of VR technology also raises concerns for some people – who may feel embarrassed, vulnerable, or concerned with the hygiene of shared headsets.
In many situations, a VR or AR experience (built from images) does not compare to physically touching and seeing a product in real life. As the technology continues to be refined, these issues may be solved by improvements in headset design and interactivity.
This technology also needs to prove its usefulness to consumers. While some are already convinced, others think it is a fun but unnecessary novelty. If it is integrated into people’s daily lives, they will begin to see it as practical and relevant. This shift takes time, but is possible if the technology addresses an important need or solves a problem.
Another barrier to the growth of XR is a backlash to technology in general. We already spend our days sitting in front of a screen, socializing in virtual worlds, and absorbed in our phones. Will consumers reject this lifestyle and start to prefer real life experiences? Some people are already visiting digital detox retreats, and major tech brands have started to integrate features that limit time spent on devices. People are concerned with technology addiction, its influence on youth, and its affect on jobs and social relationships. Science fiction stories such as Ready Player One (where people spend the majority of their day in immersive VR environments) can seem concerning or amazing, depending on your perspective. Cultural acceptance is important – if something is perceived as unfashionable or unethical it will likely struggle to gain momentum.
However, as online retail grows and capabilities advance, the benefits of XR may be hard to ignore. After all, a spa-like virtual experience may be just as calming as a digital detox retreat, and immersive virtual simulations can be important tools to train surgeons and drivers in a risk-free setting. And after the senses are fully integrated into XR experiences, such as touch, gesture recognition, and movement, the line between the virtual and physical will be even more blurry – and it will be difficult to determine what “real life” even means.
Moving Towards Majority Acceptance
New devices often start out as clunky, expensive, and hard-to-use. If they can prove their worth, further investment in development can transform them into user-friendly and relatively cheap technologies – such as the computer and smartphone – and be adopted by the masses. XR technology is still in an early phase of development but has strong potential. We have already seen multiple iterations of VR headsets and glasses, and more development is expected. If barriers to growth can be overcome, there are many possibilities for XR technology to transform society as well as many retail categories. It is important to closely follow the evolution of this technology – and if possible, be a leader associated with it – so that your business or brand stays ahead of the curve.