Why Retailers Should Start Thinking about Virtual Reality Right Now
Imagine shopping at the mall alongside friends and family, regardless of whether you’re in the same time zone. What if you could purchase from independent artisans in virtual street markets around the world, from the comfort of your home? That’s already possible through virtual reality (VR). Skeptics may think it’s just a flashy trend, but the technology is already starting to have a real impact on buyer behavior – and that influence is only going to grow.
Led by companies like Oculus Rift, more than $700 million was invested in the VR industry last year. Goldman Sachs recently predicted that the VR market could be worth upwards of $80 billion by 2025. With so much of the discussion focused on gaming and entertainment, innovative retailers are just starting to consider what VR means for brands. E-commerce giant Alibaba has launched its own VR research lab to integrate VR into the shopping experience. In a few years, consumers are going to expect this technology the way they now expect free shipping and returns. But smaller retailers may not have even started thinking about the nitty-gritty of converting casual online browsers into serious buyers through VR-enabled tailored checkout and in-app purchasing experiences.
Will people really want to use VR to buy stuff? Yes. You will, too.
Although VR headsets are currently a luxury item for the tech set, that’s also what everyone thought about smartphones and tablets. In a few short years, VR will revolutionize buyer behaviour the way mobile did a few years ago. For products like yachts, luxury real estate and high-end vacation rentals, companies are already using VR from companies like Matterport to let consumers see what they’re getting before they purchase. Buying a VR headset at around $1,000 to see the place up close doesn’t seem like so much when you’re using it to vet an investment that could be in the millions.
As the technology gets cheaper, all consumers are going to want the opportunity to “try before you buy.” A recent Walker Sands report shows that two-thirds of consumers are interested in a virtual shopping experience, and 35 percent say the technology would make them more open to online shopping.
Today, many still think VR adoption will be mainly about research and browsing rather than completing a purchase. That might sound familiar: After all, it was only a few years ago that people were saying, “No one will ever use their phone to buy something expensive like a plane ticket.” Deniers also claimed the main commerce opportunity for mobile devices was limited to location-based services. That lack of foresight meant many mainstream retailers are still struggling to adapt to today’s buyer. According to Internet Retailer, mobile now accounts for nearly 30 percent of all e-commerce purchases.
Beyond the click: VR means countless new ways to buy
Mobile commerce was a struggle for retailers because the smaller screens and keyboards presented a new way for buyers to interact with technology. Similarly, the way a user interacts with a VR headset offer unique opportunities: Shoppers can leverage swiping, pointing, and gesturing to fill a shopping cart or choose a payment method. The key is to work with the device’s strengths. Ever looked up online reviews of a product while you’re inspecting it in a store? VR can do that for you. Not only does it provide consumers an info-rich experience, it also helps retailers manage costs and prevent losses incurred through practices like warehousing.
Recently, MasterCard teamed up with virtual reality startup Wearality and Callaway Golf Company to demonstrate how someone could easily use a golf glove to make a purchase in a virtual experience – without ever leaving the game. And to encourage VR-based innovation, payment processor Vantiv held a hackathon last November in which the winning team created a virtual mall experience, and let shoppers pay by hand gesture or a head nod. This tech is only going to keep getting better, more innovative – and more persuasive to buyers.
New tech means new new trust and safety challenges – and solutions
New devices bring new worries, and safety will be a primary concern for both consumers and businesses as VR-commerce evolves. Online businesses already face the challenge of determining who is a legitimate shopper and who is a fraudster. Retailers need to build trust and give consumers a personal, hands-on experience, but they also need to keep their information safe. VR-commerce adds another dimension to this challenge, particularly if the goal is to make buying as frictionless as possible.
Because of its technology capabilities, VR might actually be a safer buying experience than traditional e-commerce. VR-commerce has the opportunity to adapt authentication tools like biometric authentication because it can verify who a person is by how they look and move. Shoppers using Apple Pay are already verifying their identity with their fingerprint, while security-focused heartbeat monitoring and iris scanning are on the horizon. The more widely biometric verification is incorporated into VR-commerce, the harder it will be to commit fraud – that is, until the bad guys come up with a way to fake fingerprints and iris scans.
Whether you’re a consumer or a retailer, you can benefit from technology that makes buying easier, faster and safer. When you’re thinking about whether or not VR-commerce is a lasting tool or a blip on the radar, remember that mobile commerce is projected to generate $350.64 billion this year. If you don’t think that’s exactly where VR-commerce is headed, you’re living in an alternate reality entirely.
