With Zara set to bring mannequins to life in its stores and Kantar starting up a new consultancy specifically applying virtual reality to the retail sector, it appears visual tech is enjoying another stint in the limelight.
Instinctively, as marketers our gut reaction to this is; "Why now? What problem does this help us solve?" It's a fair challenge given that retailers' are preoccupied with the threat posed by falling consumer confidence, online-only brands and retailers, as well as the continued rise of Amazon.
Despite the rapid expansion of online retail, physical stores still have a significant part to play in many aspects of the customer journey. Recent research found that 81% of UK consumers see the physical store as vital to the shopping experience.
Realising this, companies like Zara and Kantar are beginning to look at the experience more holistically. Far from simply investing in new technology for the sake of appearing innovative, VR is a strategic play for brands to create experiences that encourage people to come instore.
Youth directs the future
Put simply, shoppers aren’t spending like they used to. Generation Z (14-19 year olds) isn't going to Topshop or Zara and impulse buying a top, jeans or dress as a means of impressing their peers, or to demonstrate status. Instead they are purchasing experiences, gigs, music festivals – and sharing those moments on social media.
VR is a means of brands creating or enhancing experiences for this huge and influential group of consumers. By 2020, today’s Generation Z will be the largest group of consumers worldwide, making up 40% of the US, Europe and BRIC countries.
Popular fashion names including Tommy Hilfiger and Refinery29 have already taken steps in bringing elements like video content from the fashion show to the instore experience via VR. They are looking to address the relationship between the online and offline worlds in retail and the opportunity from joining up these shopping streams.
Giving shoppers what they want
It's not just Gen Z who are looking for new experiences. For many people who used to spend hours traipsing through shops on the high street, online shopping has been a revelation. I'm far more likely to research brands, offers and products online, only ever visiting a high street outlet to get a sense of the fit before making a final purchase.
Amazon has played a key part in this transformation towards a multichannel journey. Showrooming, whereby shoppers use a retailer or brand's physical presence to research an item they then buy online, has become more prevalent. Consumers are now in the habit of constantly comparing instore deals and products with what they find on the internet.
Our recent research into the ROBO (research online, buy offline) phenomena also supports the fact that both channels are playing a role in a customer's decision to buy. The findings show that among more than 30 of the world’s leading retailers, at least 45% of brick-and-mortar buyers are reading online reviews before purchasing products instore. Even items we may have thought of as ‘low consideration’ products are becoming popular searches.
Content remains king
While there's little opportunity for the high street to change how consumers behave, there's ample room for them to influence how consumers respond to their experiences there, both through their online and offline presence. Right now, the journey between the online and offline worlds is led by the consumer, who travels back and forth between the two via their mobile. However, new technology like VR is enabling brands to enhance instore experiences and join the dots between brands’ physical and digital stores. VR can give Gen Z the experience that they crave, by taking the shopper out of this world; to a concert venue, a celebrity interview or a live demo for example.
Crucially what consumers are looking for in the digital realm is great content. Today the content we look for to validate our purchase choices extends to social imagery, reviews, Q&As and even video.
It's then down to the brand to understand which content drives instore purchases, which improves brand perception and which inspires consumers to share among friends and family. Where the content is displayed is also important, it’s not just about the channel and segment, the experience also needs to be personal to the consumer. By bringing the digital world into closer contact with offline customers, instore behaviour becomes measurable. We can see what content they engage with, what works and what doesn't, enabling the proliferation of the right experience.
Consumers expect consistent online and offline experiences. When this doesn’t happen it’s jarring, creating cognitive dissonance. In contrast, by merging online and offline, from pixel to parking, retailers can understand consumers better. The content being generated allows them to gather deep insights into the customer experience to identify problems, faults and feed this into the supply chain to improve product quality and instore delivery.
Combining the offline and online worlds means shoppers have all the content they need at the point of sale. Tapping the true potential of VR relies on amplifying the content that drives purchases and learning from the content that highlights any room for improvement.
Interested in hearing industry leaders discuss subjects like this and sharing their use-cases? Attend the co-located IoT Tech Expo, Blockchain Expo, AI & Big Data Expo and Cyber Security & Cloud Expo World Series with upcoming events in Silicon Valley, London and Amsterdam and explore the future of enterprise technology.