Discussions about the future of retail often end up sounding like science fiction. But thanks to the COVID-19 pandemic, we’ve seen retail trends initially forecast as being years away accelerate straight to the present day.
Where ecommerce was once purely about speed and convenience (as mastered by the likes of Amazon) we’re now seeing a shift to consumers prioritizing immersive experiences that put the customer front and center.
Enter: Virtual shopping.
‘Virtual shopping’ is a phrase used to describe the growth of VR (Virtual Reality) and AR (Augmented Reality) assisted ecommerce experiences. Rather than browsing through a static product catalog, virtual retailing reimagines the online shopping experience using 3D renderings of the real-life in-store environment.
Online customers get to ‘walk’ around a store, enjoy product displays, and complete purchases the way they normally would – all from the comfort of their home. It’s a unique fusion between the immersive nature of physical retail and the ease of shopping online.
Some brands have used virtual shopping platforms to experiment with new value-added services. Offerings such as live video chats with store associates, interactive quizzes and games, and even social shopping with friends are designed to make the experience of shopping online as frictionless as possible.
It’s easy to dismiss virtual shopping as a fun novelty, rather than a serious tool for enhancing the customer experience. A still emerging trend, the majority of virtual shopping experiences belong to high-end brands able to experiment with new retail ventures. But the rising popularity of VR and AR technologies – as well as the disruption to brick-and-mortar stores caused by the COVID-19 pandemic – has turned virtual reality shopping into a viable long-term offering that all retailers should be paying attention to.
Despite being hyped up for years in advance, early VR/AR experiences were clunky at best. VR headsets came with a high price tag, and experiences were limited by the cost of development. High-profile failures by the likes of Google Glass showed that most consumers didn’t see a role for AR in their daily lives.
Fast-forward to 2021, and the picture looks very different. Last year, the consumer sector accounted for the largest share of VR and AR spending at 53%. Thanks to the rise of Snapchat and games such as Pokemon Go, AR has gained widespread currency with consumers. It’s estimated that 75% of the global population will be frequent users of AR by 2025, while 94% of AR shoppers say they plan to keep using it in the future.
In sum, virtual retailing coincides with more willingness by consumers to experiment with new shopping technologies. Combined with the rise of mobile shopping and greater omnichannel connectivity, it’s easy to see why virtual retailing is the next level of experiential retail.
Ecommerce has seen rapid growth due to offering a convenient, self-directed way of shopping. Consumers can place an order at any time of the day or night, without needing to contend with long checkout lines or busy sales assistants.
But even the most seamless ecommerce experience struggles to match the fun of browsing in-person. The lack of one-on-one engagement with customer care representatives can leave the brand experience feeling clinical at best, designed for efficiency rather than enjoyment.
This is why despite the rise in online retail sales, many consumers still prefer to do the bulk of their shopping in-store. Shopkick’s recent study found that 70% of consumers rate the ability to try on, touch, and see physical products as their favorite part of the in-store experience, followed by in-person interactions with sales associates (41%). According to Raydiant’s 2021 study, 47% of respondents estimate they’ve spent over 51% of their shopping budget in physical locations so far this year.
Virtual showrooms offer brands a way to fill the divide between shopping as either a utility or a recreational activity. It gives consumers all the convenience of purchasing via an online store – but with the human touch that we associate with the in-store experience.
Brick and mortar retail has been dealt a rough hand over the past 18 months. Lockdowns caused by the COVID-19 pandemic have led to record store closures. And while the United States has entered a ‘new normal’ in the wake of the pandemic, the threat of fresh restrictions persists due to the Delta variant.
It’s no secret that the biggest pandemic success stories in the retail industry have come from brands who’ve pivoted to ecommerce. So, it’s important that retailers continue to look for new ways to connect with their customers and enhance the shopping experience – especially those that complement your offline efforts.
Virtual shopping offers customers a fresh retail experience that combines responsive customer service with the connectivity of digital, making it a brilliant way to engage customers and achieve a true omnichannel experience.
The pandemic has led to an acceleration in online shoppers using alternative delivery methods to home delivery, such as BOPIS and curbside pick-up. Combined with the rise of ship-from-store fulfillment strategies, this has put physical retail stores under a lot of strain.
While store-based fulfillment helps to lower last-mile delivery times to local customers, it does have some serious drawbacks. Having fulfillment activities take place on the shop floor can negatively impact the in-store customer experience. And if you don’t have an area that’s purpose-built for carrying out fulfillment activities, this could end up being much more costly and inefficient.
Moreover, O2O (online-to-offline) retail puts a lot of pressure on store locations to carry high volumes of stock to meet the demands of online orders. This makes accurate inventory reporting difficult and increases the likelihood of stock-outs or excess inventory piling up.
Virtual shopping helps you to take pressure off your store network by allowing consumers to browse products the way they would in-store – including getting assistance from store associates. If customers are more comfortable opting for home delivery, this removes the need to carry large amounts of inventory.
Appointment-based shopping used to belong to the domain of luxury retailers offering one-on-one customer service. But thanks to COVID-19 and the rising consumer anxiety about crowded stores, appointment shopping has become a useful tool to reduce overcrowding and improve customer satisfaction.
In fact, 62% of consumers reported that being able to book a time to shop in person would make them more likely to visit a store. Yet this can be challenging for retailers to coordinate, especially if it reduces store associates’ ability to multitask during busy periods.
Virtual shopping presents a much more manageable alternative by connecting online shopping with a white glove customer care approach. Customers can initiate a video call or live chat with a representative if they have questions about a product or want recommendations, which enables a much more responsive shopping experience.
A disadvantage of in-store shopping is that data isn’t available before the point of purchase. While sales history is helpful, it doesn’t explain what influenced a customer’s decision to purchase. You don’t know what other products they considered, or how many store visits it took before they made a purchase.
In short, it’s virtually impossible for retailers to personalize the in-store experience.
Ecommerce has been a game-changer because it’s possible to track the entire shopping journey from beginning to end. Merchants can track so-called ‘foot traffic’ in real-time as customers move around the website and track which products end up in the shopping cart, enabling them to create tailored recommendations accordingly. Nearly half of consumers (49%) say they’ve made an unintended purchase as a result of a recommendation.
With virtual shopping, data gathering opportunities increase even further. In a three-dimensional environment, you get to see how customers react to your merchandising efforts in a way you simply can’t measure offline. The performance of service offerings like virtual shopping assistants or AR tools can be mapped much more effectively when they’re directly integrated into the shopping experience, rather than scattered across different apps or interfaces.
Regular retail activities such as refreshing merchandise and changing mannequins can be incredibly time-consuming. But with virtual retailing, you can achieve this in just a few clicks for a more dynamic storefront.
The decision to remodel your retail space is always a major one. With the best audience research on your side, it’s still difficult to know how customers will respond until they get to experience it for themselves.
Virtual shopping gives you the ability to A/B test different store concepts with your customers – without having to go through the time and expense of changing an actual storefront. For example, you could add a customer survey to your virtual store that asks customers to rate what they think of the experience. You could also use a virtual store remodel as a pop-up teaser campaign for what lies in wait for your physical stores, helping you to drive online traffic.
As a digitally native beauty brand, Charlotte Tilbury understands the importance of engaging ecommerce experiences. They were among the first to adopt virtual shopping as a tactic to handle the ongoing difficulties presented by the COVID-19 pandemic.
Launched in time for the 2020 holiday season, their first virtual storefront – powered by virtual reality platform Obsess – was an exercise in branding as much as commerce. In addition to the usual ecommerce shopping capabilities, customers are guided around the 3D store environment by a ‘Charlotte’ avatar and have access to personalized advice and product recommendations via virtual consultations. They can even invite friends to shop alongside them via video call, creating a true social commerce experience.
They’ve since followed this up with a new store concept designed to promote their new Look of Love collection, which features the same white-glove capabilities as their store.
The parallels between virtual shopping and video gaming are plain to see, and Coach has very effectively taken advantage of this with their 3D store on the Tmall Luxury Pavilion, Alibaba’s digital platform for high-end brands.
With affluent Chinese consumers currently able to travel abroad for luxury shopping, Coach has recreated the storefront of its iconic New York City location on Fifth Avenue – with the added allure of earning loyalty points for ‘checking in’ to the store each day or sharing it with friends. Shoppers can also access exclusive content, including livestream shopping events with popular influencers and product releases only available on Alibaba.
As the pioneers of digital shopping, Chinese consumers are highly engaged by virtual experiences that offer new ways to engage with their favorite brands. Coach reported that their virtual shop had doubled the amount of time that customers spent in-store in the first two weeks – a testament to the power of virtual experiences.
Sephora has usually been ahead of the curve with its online shopping capabilities. So, it’s not surprising that virtual retailing is firmly within the beauty giant’s sights.
Due to the ongoing COVID-19 pandemic, Sephora decided to turn its annual ‘House of Beauty’ into a virtual experiential event. It features five different ‘rooms’ for customers to navigate, including a networking space for beauty fans, a home theater for tutorials, and a backyard ‘party’ set to feature some surprise guests.
Rather than a straight shopping experience, Sephoria is a retail activation designed to immerse customers in the brand’s new direction of supporting sustainable and minority-owned labels. Customers can connect virtually with founders by accessing live roundtable discussions, masterclasses, and interactive brand storytelling. Attendees have the opportunity to purchase an Experience Kit containing products and samples by featured brands, and to win additional prizes by participating in quizzes and games.
As Sephora’s first foray into virtual shopping, time will tell if Sephoria: House of Beauty marks the start of bigger investment into virtual experiences.
The rise of virtual shopping is a testament to how ecommerce is becoming as experiential as offline retail. Where online shopping was designed to remove interruptions and window dressing, it’s become clear over the course of the pandemic that consumers miss the joys of unintended product discovery. By bridging the gap between the offline and online, virtual retailing is set to change how brands approach customer loyalty and designing quality shopping experiences.