How Will V-Commerce Arrive? Consumers Show the Way

Augmented reality (AR) and virtual reality (VR) bring the potential for entirely new shopping experiences and new kinds of added value. They are the gateways to “v-commerce,” a blend of brick-and-mortar retailing and e-commerce.

L.E.K. Consulting recently surveyed 1,000 consumers who were aware of AR and VR technology. The results offer an initial look at what consumers hope to do when they shop in augmented or virtual realities.

The time for retailers to pay attention is now. AR and VR are no longer niche or fringe interests. Nearly half (46 percent) of those surveyed said they had used either AR or VR at least once. Eleven percent reported using both.

What Consumers Want

As AR and VR technologies continue to evolve and become more commercially viable, consumers indicated they will want richer, more personal experiences.

Specifically, our early adopters said they were most interested in a handful of activities where the technology could present a compelling alternative to traditional shopping — e.g., designing a room or physical space, creating custom-designed items, or going on a virtual shopping “trip” with friends or a celebrity.

The most popular activity — designing a room or physical space — resonated with 80 percent of our early adopter group. The use case is especially practical because it’s easily supported by current smartphone technology. Some retailers are already enabling consumers to use their smartphones to browse physical or virtual showrooms and get information about furniture and decor. They can “see” configurations of furniture and home decor projected into physical spaces, and appreciate how it will work in a home setting.

Custom design, at 70 percent of our group, is a close second. Judging from nascent applications (with more compelling variants in beta-testing), we expect that consumers will soon be able to start with an image of themselves on their smartphones and then search for items like the perfect shade of makeup or an eyeglass frame that perfectly suits them. It’s an AR version of the time-honored tradition of trying things on — but much more effective because designs are custom created, not just off the shelf. The same approach works in cases where the biggest issue for consumers is how the product itself looks (e.g., jewelry, shoes).

Virtual shopping, where consumers will eventually use VR headsets to shop virtual stores, closely followed in terms of overall appeal. Consumers will in the not-too-distant future use avatars based on their measurements to “try on” clothing, or even meet up with friends who aren’t physically present. These type of applications generated strong interest, resonating with 70 percent of our early adopters despite the technology not yet being commercially available. Gaming and science fiction films have already planted the idea in consumers’ imaginations, and people are already comfortable with the idea of AI-driven personal shoppers thanks to Alexa and Siri.

AR and VR Will Help Retailers Take Customers on Powerful New Journeys

V-commerce doesn’t exist in a vacuum; it needs to be integrated across channels. It’s one more way to add to the existing toolkit and offer consumers a different angle to shopping.

The potential benefits, from a retailer’s perspective, are considerable:

• Greater consumer engagement: AR and VR can create new experiences that would otherwise not be possible, which encourage trial of new products and build both product and brand loyalty.
• Enhanced omnichannel capabilities: AR and VR integrate digital tools even more powerfully into the shopping experience itself. This is true not only in the physical store, but also for online-only retailers.
• Better conversion and bigger baskets, thanks to the ability to tell stories: AR and VR allow retailers to turn product displays into vignettes. Well-told stories have proven powerful at driving results. A customer can “see” a sofa in her own living room, and can then be shown the cushions, lamps and side tables that go with it.

The future of AR and VR in retail is still developing. However, as insights begin to emerge about the rapid evolution of consumer preferences and desires, the time to begin planning for tomorrow is now.

Dan McKone, Rob Haslehurst and Maria Steingoltz are managing directors at global management consulting firm L.E.K. Consulting.