Ar and Vr in Retail and Consumer Products
[pic 1]AR and VR in Retail and Consumer ProductsFinal assignmentDmitry Orishchenko | Technology and Innovation Management | 23 July 2017Retail Market DynamicsRetailers nowadays live in unprecedented competitive environment. Customers more and more prefer online shopping, economic growth is low in many parts of the world, and of course globalization which requires continuous technological advancement of the marketplace – all that raise questions around the future of traditional retail.In addition, recent trend is mass move to mobile. Smartphones are always with us, unlike laptops, let alone, desktop computers; mobile applications become increasingly user-friendly; and mobile payment safety and simplicity improved dramatically. Today smartphone covers all three steps of shopping: research, shopping itself and payment. As per PwC report[1], mobile as a shopping channel has been steadily growing during recent years, taking the share of PC shopping.At the same time, in-store shopping returned to growth in 2016 (Exhibit 1). Why is that? Is death of brick-and-mortar retail a myth? Another report[2] confirms that majority of people still prefer physical store to shop, they value the ability to physically try the product before purchasing, the store experience itself. Hence the differences in types of products which people prefer to by online versus in-store (Exhibit 2). Books, movies, music are more in the online bucket now, whereas grocery and furniture are still bought in brick-and-mortar shops mainly. Clothes, footwear, jewelry are in the middle but still mostly purchased physically.
Latent NeedsWhy does in-store retail hold its dominating position despite obvious advantages of online? Why do people still spend their time and efforts going to the shop instead of buying sitting in the sofa in several clicks?Discovery – It’s easy to buy online familiar products from known manufacturers, but dealing with new brands it’s worthwhile to go and try. Website photos are not enough to evaluate the product fully, let alone pictures on the mobile version.Experience – Shopping is more than consumerism. Buying in person implies high emotional aspect, like meeting with friends, changing the environment, appearance.Service – People value personal assistance in the buying process, they often need someone to help with their choice. With regards to furniture, usually personal assistance is absolutely necessary to calculate how, say, the wardrobe fits into customer’s bedroom.Speed – It may sound strange, but often to buy in brick-and-mortar shop is faster than online since you don’t need to wait for delivery, and cheaper since you don’t pay for delivery (and for return shipment if you want to return or replace the product)[3].Those are just a few critical needs which online shopping cannot satisfy with the current level of technology, but even in-store experience can be elevated on the new level by developing technologies – customers just don’t know yet.VR and ARVirtual Reality (VR) and Augmented Reality (AR) are two technologies gaining increasing popularity in different areas of life. The first allows full immersion into artificial space making user feel like they are experiencing the simulated reality, while the latter as follows from the name, adds visual content over the real world surroundings making actual reality more meaningful through the ability to interact with it[4].