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VR is disrupting the retail industry – but not in the way you might think

This article was sourced from LinkedIn. Article by Mark Hardy.

In this series, retail experts at Shoptalk discuss the most pressing issues facing their industries today. Write your own #Shoptalk17 article here.

Virtual reality is being talked about a lot right now. Depending on who’s doing the talking, VR is either on its way to change the future as we know it, or it’s on a path toward another 90’s era extinction. Whether or not VR will make its way into consumer’s living rooms any time soon remains to be seen—in the gaming world, it’s an amazing technology but comes at a hefty price. In other industries, however, VR has already made waves when it comes to creating a learning space. We’ve seen how VR can help doctors practice medical procedures without the risk; how it can take children into the solar system; and how it helps people in different cities, countries or continents view real estate without hopping on a plane.

For those of us in the retail space, virtual commerce–or “v-commerce”–is a term you can’t get away from. We’re seeing clothing companies using it to try out virtual dressing rooms, or as a way to bring shoppers into the store with VR marketing campaigns. It’s very possible consumers will be able to shop for their weekly groceries all within a virtual space, much like they shop online now, but with the ability to actually pick up products and walk around a virtual store. This has huge potential for home décor, as we’ve seen with Ikea, and for making large purchases that wouldn’t normally be purchased online.

Where VR shines

While much of what we read is focused on the consumer-facing side of VR’s capabilities, where VR is making the most headway right now is actually in the nitty-gritty aspects of business processes. Let me explain.

We know that brick and mortar retail is in a difficult place right now. Warren Buffet just let go of most of his stock in Walmart. The market value for many huge retailers remains on the decrease, and for CPG companies the center store continues to dwindle amid the organic food movement. By merging or acquiring, companies are hoping to stay afloat, but that doesn’t do anything to fundamentally change the way manufacturers and retailers do business.

That’s where VR has an enormous amount of potential. Virtual’s ability to fully immerse users within a totally different space allows for a risk-free environment to create and collaborate without the normal risks associated with making business decisions, ie time and money. Zero-based budgeting has been making a comeback in the retail sector, which means companies just don’t have the resources they used to. As a result, they need a change agent that will allow them to be more agile. VR allows teams to go over new in-store ideas and visualize changes within a hyper-realistic virtual store, and then test those concepts through virtual walk-throughs. Traditional methods like mock stores and purchase intent data still have their place, but VR technology can help quickly supplement necessary change on tight budgets.

Plus, as technology has improved we’ve seen more and more CPG and retail teams that don’t even work in the same city, much less the same building. Communication often suffers when there’s no face to face interaction. So imagine how much more effective it would be to collaborate with coworkers within a virtual meeting room, or to have all team members view a 3D video of a virtual store concept, and then make changes to it in real time. These types of interactions are all possible with VR technology.

So while sexy headlines like “VR That is Out of This World” and “VR survey says US consumers are starting to believe the hype” are totally legit, the consumer-facing side of VR is still in the works. The ideas behind VR for entertainment are awesome, and virtual commerce is not far away. But business applications for changing the financial equation at retail are where VR is really shining right now, and that’s where we’re seeing real, tangible change from a technology standpoint. When companies can learn what resonates with shoppers, create concepts that will create loyal customers, and save money doing it, VR doesn’t seem so futuristic—it’s here and now.

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BCR team
The BCR Advisory team are a national represented firm with its main office located in Sydney. It is a boutique corporate advisory, recovery and insolvency firm that specialise in the SME market. The team’s reputation is built on their extensive experience within the industry as well as their fresh and innovative approach to problem solving for distressed business owners.Let us know what you thought about this article by leaving a comment below. Alternatively, you can get in touch with the BCR Advisory through our contact page.