Virtual Shopping is Around the Corner, Are Retailers Ready?
Lots of virtual reality content will be hitting the market this year and this could be a driver for consumer adoption, resulting in growing demand for shopping experiences using the technology, according to a new report from the Center for Advancing Retail & Technology.
The report, Retail Innovation: U.S. Retail Technology Insights and Analysis, points out that many retailers are still finding it difficult to integrate mobile into their strategies even as the pace of technological innovation speeds up. Due to this, many retailers will be unprepared for the shift to virtual reality.
“Few people in the retail industry understand how the world has changed as technology driven innovation accelerates,” according to Gary Hawkins, CEO of the Center for Advancing Retail & Technology. “Change happens increasingly fast, especially with technologies like AR and VR which are great examples of how consumer technology adoption forces retail to adjust and adopt. Retailers need to be watching very closely because when VR hits the market adoption tipping point its going to go fast and shoppers will be expecting to be able to shop from home with a VR experience akin to what they have in the store.”
The potential impact of virtual reality on shopping is bound to be substantial, per the report. Shoppers can sit on a couch and put on a headset to go shopping from home.
Innovative companies have already started developing these solutions and working with big-name retailers in different sectors while others are in deep discussions or working towards pilots, according to the report.
Hulu, which is using virtual reality to help drive app downloads, while Rukkus is using the technology to drive sales of tickets to live sports events and IKEA customers can now explore kitchen interiors with virtual reality are examples of this.
Mr. Hawkins observes that two things need to happen for VR to explode and they are both in process.
The first of these is content creation for VR environments. Many publishers have already announced VR content programs this year and the ability to create such content is becoming more easily accessible and less expensive.
Consumer adoption also needs to reach a tipping point. A number of consumers are already being exposed to the technology via gaming. VR, however, will possibly be used more in education going forward, which will significant adoption, per Mr. Hawkins.
Also, there are already a number of headsets such as Google Cardboard which are available for less than $50 and provide a high-quality virtual reality experience using a smartphone.
“As the cost of creating VR content plummets we are going to see an explosive growth in VR and AR related shopping,” said Mr. Hawkins.
Internet of Things
Another area that is evolving quickly is the Internet of Things, as Amazon aggressively stakes a claim for home replenishment of consumables. Amazon’s Dash button along with the integration of the Dash Replenishment Service into home appliances is a palpable threat for retailers across an increasing number of product categories.
Other retailers have already started to strike back. For example, Sears recently announced a series of IoT devices under its brand names.
“The big takeaway is that the world is getting ever more challenging for retailers,” Mr. Hawkins said. “There is an innovation-implementation gap that CART is seeing develop as retailers are becoming overwhelmed by having to sort through the sheer number of new innovative solutions and capabilities to determine what to focus their limited resources on.”
The bigger picture
Store infrastructure along with the impact of technology here is an area where retailers are really paying attention, according to the report.
“We see retailers grappling with store format and operations as they think through how ecommerce will increasingly impact their business,” said Mr. Hawkins. “As ecommerce grows, do retailers continue to fulfill out of operating stores or do they set up ‘dark’ stores dedicated to ecommerce fulfillment?
“If fulfilling out of operating stores, how does the store – and outside the store – layout change,” he said. “Retailers need dedicated space for staging click and collect orders and delivery.
“How does the parking lot layout change to accommodate a growing number of click and collect orders? Retailers need to consider a growing number of changes to the brick and mortar store as the physical and digital worlds merge.”