July 11, 2019
VR & AR — provide a huge differentiation opportunity for retail
While virtual reality (VR) is not a new technology until recently it has been mostly the domain of the film and gaming industry. However, recent advancements with its user interface has made it much more accessible for other industries and especially desirable for retailers and marketers looking for new and innovative ways to differentiate and improve the customer experience. Augmented Reality (AR) on the other hand is not such a newcomer. It has spent the last decade securing its place within the retail industry. The ability ‘augment’ the real world with images, text, video, graphics, etc. without obstructing the view of our own surroundings is what lends AR to such wide-scale applicability in retail.
Both VR and AR are now competitively available outside of film and gaming providing a very achievable opportunity to enhance the way your consumer experiences your brand — turning brand story-telling into brand story-living!
With AR/VR revenue expected to top $209 billion by 2022, this technology isn’t going anywhere and it behoves any retailer wishing to capitalize on their brand with an experience-based marketing opportunity.
To clarify the difference — Augmented Reality (AR) is a mix of the real world and the virtual world. It lets people interact with both worlds and distinguish clearly between both. This is generally achieved by holding a smartphone in front of you. Virtual Reality (VR) creates an entire virtual world. With VR it is hard to differentiate between what is real and what is not real. This is generally achieved by wearing a helmet or goggles.
Yihaodian’s Successful AR Application
Arguably one of the world’s most successful AR retail applications comes from China’s largest online grocery store, Yihaodian. The retailer successfully gamified the mundane experience of grocery shopping, engaging the user, and expanded to new locations (1,000 overnight!) without spending a dime on real estate. Through their clever Augmented Reality application, Yihaodian opened ‘virtual’ stores nationwide in parking lots, parks, and tourist spots. The app uses the phone’s camera to guide the user through ‘virtual aisles’. Users can then touch a product on the screen and add it to their cart. When they are done, they can arrange for the products to be sent to their home.
Audi’s Successful VR Application
The Audi Q7 reveal was the first car debut in history to take place in virtual reality. These locations in major cities are a perfect example of a fully integrated digital and virtual experience. Audi’s claim is that their city saloons assist consumers “with the aid of ground-breaking technology and state-of-the-art media facilities, visitors can experience the entire model range — several hundred million possible configurations, including all the colours, equipment/trim options and functions. All this in a limited space in the very centre of the city and true to the Audi brand pledge: vorsprung durch technik“ (Audi), of course meaning “advancement through technology.”
Audi City aspires to create interactive social spaces, similar to the concept of art galleries that inspire their clients to participate in discussion forums, exhibitions on topic related to themes such as urban development or areas of art, culture and design. The concept is aimed at creating a futuristic and emotionally engaging exchange with a new retail audience.
Upon visiting an Audi City location, visitors are greeted by Customer Relationship Managers, who can consult on the brand and advise how to digitally create a car from several hundred million potential configurations that allow customers to see it come to life. This revolutionary approach has led to a 60–70 percent increase in new car sales, with 75 percent of orders placed by first time Audi buyers and customers buying cars at 120 percent of the price due to high uptake rate of optional features. Almost 50 percent of customers in the first half of 2013 ordered vehicles at their London Audi City store without a physical test drive, having only ‘experienced’ their future car in an entirely virtual environment. A feat unimaginable only a few years ago, but not now, for an urban tech-savvy demographic.
Time-starved millennials demand a better retail experience
In order to stay relevant to a segment of the consumer market that has grown up tech savvy — well-established companies are re-evaluating marketing strategies in order to connect with the millennial consumer, who’s buying power in the US alone was recently estimated at $200 billion annually. These time-starved, urban city dwellers not only expect these kind of technological advances from companies but they also prefer highly personalized and bespoke experiences. These findings informed Fresh Design International’s recommendations to a leading motorcycle manufacturer recently for whom the agency built a proto-type, virtual reality application that, similar to Audi, allows potential motorcycle buyers to experience their own customizations virtually without the physical presence of the actual product. The success of these kinds of applications have huge implications:
So why Fresh?
Simon Wardle, Managing Director of Fresh UK said, “We are very excited to introduce Fresh Interactive Media, adding to our ever-growing portfolio of services offered. Our capacity to build sophisticated Virtual and Augmented Reality retail applications for a variety of industries, most recently in the automotive and real estate sectors, has allowed us to be at the forefront of these trending technologies, that are poised to transform the retail industry.”
With a solid background in architectural/interior design for retail and other industries, the Fresh designers are able to combine their AR and VR capabilities with their understanding of retail and built environments extending beyond the reach of their competition. Team Fresh has the creative capacity to challenge the status quo. They understand the potential of this technology and can guide a retailer on how to make unforgettable and unique experiences that will help them stand above all the rest.
Our work on St Andrews Dock is a great example of how Virtual Reality can be used in Architecture.