Retail is struggling. That process started before COVID-19, leading more shoppers to the already popular world of eCommerce.
While online retail certainly brings convenience, speed and choice, there are still elements of in-person shopping that the online experience struggles to replicate. Simple things like trying on clothes and makeup or being able to hold a physical product,
This is where extended reality (XR) can enhance the next wave of retail. XR is the collective term for various immersive technologies including augmented reality (AR), virtual reality (VR) and mixed reality (MR). It also represents the future of retail, combining the ease and convenience of digital shopping with the advantages of the physical environment. With the sector forecast to reach $17.8 billion in value in the next five years, now is the time to embrace the benefits of the new technology.
Why is XR so important to the future of retail?
Customer expectations are higher than ever, and the onus is now on retailers to provide a memorable experience that encourages repeat customers and increased sales. XR provides the tools to build a greater experience, quicker purchases, fewer returns, and improved brand efficiency. It allows consumers to engage interact with your products in a tangible, yet virtual environment.
One example is Shopify AR – a digital store add-on It allows the shopper to create a 3D version of a product on their device, which they can then view from all angles, giving the shopper a better sense of the product. According to Shopify data, this boosts purchasing confidence, increasing conversion rates by up to 250%.
How can retail brands embrace XR?
AR can bring the world of eCommerce to life whilst retaining convenience. It enables users to try on clothes, makeup and even take a glimpse into remodelling their homes. L’Oréal, for example, uses AI and AR technology to let consumers ‘try on’ makeup products from their devices by superimposing the selected makeup onto an image.
It’s highly likely you’ve heard of ‘the Metaverse’ – a virtual world, where people can interact, play, attend events and work. What you might not be aware of are the potential opportunities it opens for retailers. According to a recent study by JP Morgan, $54 billion is spent on virtual goods every year, which is why a number of major brands including Nike, Ralph Lauren and Coca-Cola are making big investments in AR and XR.
Fast fashion brand Forever 21 has seen significant results with a virtual store in the platform Roblox. Launched in 2021, the virtual store, which sells outfits for avatars, was so successful the brand has created physical items to mirror those sold in the virtual store.
Shoppable media platforms, such as Aibuy, turn advertising into a shoppable experience. With such technology, shoppers can complete their purchase directly from an ad or social media content, without having to leave the platform. This not only adds an interactive element to your content but also shortens the path to purchase. According to an Impact.com report, eight in 10 businesses believe that commerce content will contribute to a larger portion of their publishing revenue in the future and 45% have seen a higher total revenue since introduction.
Overcoming the XR challenges
The first challenge that retailers are going to face is the price of XR. However, the cost of implementation isn’t necessarily as high as some would think. Whilst VR and MR require expensive equipment and a lot of development to position a brand, AR remains relatively easier to adopt – even more so if you create a filter for social media.
There is also the issue of market readiness, with many retailers seeing XR as more of a gimmick. But the success XR has had in boosting conversion rates is hard to argue with. As consumer interest continues to rise with 22.5% of global consumers looking to invest in a standalone VR headset over the next two years, it’s becoming apparent that this is a growing trend.
How to bring XR into your retail future
There’s no one-size-fits-all solution to adopting XR. But one thing stands, as the world of XR grows, now is the time to move. Brands should consider the solutions that are right for them, and the time and resources needed to leverage this technology.
Importantly, as brands embrace XR, they must stay focused on customer experience. Don’t introduce XR simply because it’s on-trend, instead, tailor any experiential solutions to solve problems or enhance the journey. Brands that adopt XR to add a more tangible, engaging aspect to their online offerings, will resonate with consumers and leave them with a lasting impression.