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Creating ROI in the future of AR/VR in Retail: How Retailers are using VR/AR to achieve growth, profitability, and customer experience goals. Hear directly from retailers and the tech companies they’re working with to uncover best practices, new technology and new ideas that are shaping the future of how we buy.
Our Retail & eCommerce Committee is inviting speakers for a Webinar we are planning for May. Please email email@example.com if you’re interested to present! Let us know if you’re also interested in Sponsoring this webinar.
The Committee’s mission is to provide awareness and education for Retailers on how to utilize VR/AR technology to interact, transact and educate customers. Integrating this technology into a consumer-focused strategy can help increase customer experience and growth while reducing churn and returns. Moreover, this technology can be utilized to help retail employees retain information, use as a guided selling tool with customers and prepare for certain situations that are hard to duplicate in real life to limit risks to themselves or the company.
The VR retail market is expected to rise to $1.6B by 2025, and AR could reach $30B in sales. The retail industry is expected to spend $1B in 2017 on VR/AR solutions. Driven by a 5-year CAGR of 240%, forecasts show that retail could become the top industry for VR/AR spending by 2020.
Join our Committee and representatives from tech, startups, retailers, and other industry leaders testing new forms of AR and VR used in-store and out-of-store to enhance and analyze purchase behavior. More info here
It’s easy for consumers to shop online for products and services they already know, but much commerce is still offline because people want to “try before they buy.” New technologies have emerged to close the gap, but whether consumers will be able to enjoy them depends on public policy.
Augmented Reality (AR) and Virtual Reality (VR) are two of the technologies which can become mainstream, extending beyond just video games, with the advent of 5G, or fifth-generation mobile networks. 5G offers speeds 10 times the current 4G with more throughput and essentially no latency, or lag time. As 5G becomes more pervasive, the technologies like AR and VR will be democratized.
While many are familiar with AR and VR from the gaming experience, these technologies can help make products on a screen more real with images that can be rotated, enlarged, and experienced interactively. By holding up the phone’s camera for example, AR superimposes the desired product into the user’s view. VR personalizes the experience for the viewer, for example, by simulating a road trip so a person can buy a car without leaving home. AkzoNobel's award-winning Visualizer mobile app, downloaded some 20 million times, allows users to virtually paint living spaces in chosen colors and gives customers the freedom to experiment with colors and make confident choices before purchasing the paint.
Ecommerce could become the top industry for VR/AR applications. The retail industry already spends over $1 billion annually on VR/AR solutions, growing by 240% according to the VR/AR Association. Industry experts, like Eric Prince of Cimmerse – a startup enabling this technology for online sales of fashion, luxury goods, home décor, and fine art, are eager for 5G because of increased speeds and capacity for more information. This translates into larger augmented and virtual reality scenes, helping retailers to offer their customers a more compelling visual experience and hence close the sale.
Prince describes how 5G would work for his clients, “Imagine a product like a full-size couch in hyper detail that you can place in your room. With 5G, we will be able to provide the couch, the room and everything in it, toss in a realistic human avatar with artificial intelligence that walks into the scene and helps end user with any information needed to complete the purchase.” The VR/AR Association’s 5G Committee notes that this experience “cannot happen unless the networks that will have to support these applications can deliver the required performance, [e.g.] latency on the order of several milliseconds.”
The US generates most AR/VR revenue today, but long term economics could favor China. The Chinese Alibaba and Tencent have made massive investments in AR/VR and are in striking range of Amazon. China is well-positioned for its Asian neighbors to adopt its platforms, and the region could account for half of all global AR/VR revenue in just 5 years, according to AR/VR analyst Tim Merel. The country that wins on platforms has a lot to do with which is first to deploy generation networks, and a slowdown in 5G deployment could harm American firms.
The US was the global leader in investment and innovation in 4G mobile networks and technologies, but China now has the edge with 5G. The US fell behind because of many missteps over the last decade, particularly in the Federal Communications Commission (FCC) failing to fill the spectrum pipeline and imposing a series of misguided internet regulations which caused network investment to fall by $1 billion consecutively between 2014 to 2016.
Fortunately, the current leaders at the FCC corrected those errors in 2017, clearing the way for the US to take the lead in 5G with policies to streamline infrastructure deployment and make more spectrum available, specifically in the 3.7 GHz band later this year. These are incremental steps toward encouraging 5G deployment to help the U.S. catch up to China, but the FCC must push forward with policies that make it easier to deploy the next generation of networks nationwide by streamlining regulatory and policy frameworks that inhibit buildout. With leadership at the federal level, states and cities can follow suit and embrace new technologies that improve people’s lives and stimulate growth.
For the EU, it may be too late to come back. While it once created the leading wireless technologies and devices, the EU regulated away incentives to invest and innovate, causing their leadership in investment to plummet and erasing the foundation of mobile R&D in the region. The EU continues to discourage innovation with the heavy-handed General Data Protection Regulation (GDPR), so onerous that many companies have stopped serving the EU altogether and consumers shop less online. The U.S. should not follow this misguided path, but instead allow consumers to try new applications, technologies to compete, and the economy to flourish.
The FCC has taken steps to enact policies to streamline wireless infrastructure rollout and unlock spectrum at the federal level. Now states and municipalities must do their part to encourage investment. This matters for retailers because the US and China are in a race for the preeminence of ecommerce platforms and applications. If US app providers don’t get 5G networks fast, there won’t be a second chance to win.
VR experts Spinview follow the mantra 'don't do VR for VR's sake' and focus on providing great business results for retailers looking to transform the consumer experience. Their in-situ environments and cutting-edge eye-tracking research gives deep analysis in a cost-effective way that has already won awards.
Co-Authors: Kris Kolo, Nathan Pettyjohn, Jordan Bloomingdale, Barry Hoffman, Danny Gordon, John Wright
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Retail is making shopping and buying easier and more fun again. For some shoppers and products alike, the full product view is really needed. Below are examples of what our Members are up to.
For the in-store experience, retailers can now leverage InContext Solutions VR simulations that let executives test store campaigns and displays with analysis and feedback from the program. This could be a game changer for high volume stores, potentially making every customer a conversion. In one example, the results showed improved KPIs: 7% increase in category sales 14% increase in private label sales; 5% increase in units per buyer; Customer ROI: $920K in incremental sales and $275K in category margin for the retailer.
In another InContext example, by referencing the sales and shopper impact data collected from Indicators, the executive team made a speedy decision about which signage strategy would meet their goals. The results showed Units per buyer and sales for key center of store categories increased within the first 12 weeks following the signage campaign implementation. Over time, the client attributed a Y1 topline increase of $1m to this campaign.
On the product side, Aisle411 3D product cloud enables 3D scanning of consumer products tailored with brand information for the full turnkey needs of a product. The 3D Product Cloud system reduces the time of creating 3D models by an average of 65-70%. Brands can easily give access to their 3D product models to app developer partners, marketing agency partners, and retail partners; for use in VR/AR commerce apps and websites. 90% of users prefer augmented reality navigation and experiences over 2D mobile app experiences.
In another example of aislle level AR, Blue Visual Effects, have been working with the Good Neighbor Pharmacy Franchise to create a fully integrated augmented store package. This includes building deeper messages via AR in all in-store signage, having AR pharmacy hosts that direct consumers to specific departments within the store, co-branded Augmented products with shelf talker callouts and instant coupon delivery based on AR actuation.
On the lighter side, Strata’s Nu Skin’s Lumi Spa app lets users use a facial massager via AR to see how the product would work. The goal of being to engage customers and provide some entertainment for social sharing.
For Audi, ZeroLight undertakes a range of projects using cutting edge display devices and techniques; it’s virtual reality experience allows users to walk around to explore the car, utilising the large "play area" of the HTC Vive. The user digitally interacts with a fully configurable 5 million polygon car with advanced lighting and effects at 90Hz with sub 20ms latency. Such high performance from the hardware is made possible by ZeroLight's highly optimised visualization solution and means a sickness-free experience for the customer.
With UrCommerce AR solution, users can view products in 3D from their mobile device. For example, they are working with the company ColorMods LLC ; using Augmented Reality to revamp their advertising initiatives, both in print and on their website. They are building out 3D models of the computers that they sell so that customers can visualize them on their phones or tablets. The company also creates posters that enable AR to showcase a product; and even allows users who like the product to purchase via in app link.
Rounding out the promising marriage between retail and AR is Auredi, an augmented reality dining platform, which combines both an in-restaurant and social experience for restaurants and patrons to utilize 3D models of dishes on mobile devices. The company has already signed up several Los Angeles restaurants in a private beta, with customers currently exploring and enjoying all the innovative features the platform offers.
See more use case and case studies here
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Technology is helping retail make shopping fun again. Shoppers no longer have to visit brick-and-mortar stores and peruse for neon "open" signs. Now your smartphone can function as a personal computer and you can have access to a digital shopping cart and register with just a few simple clicks. For the most part, retailers have done an adequate job of adapting an omniexperience model for their customers, but something was still missing. However, this changed when augmented reality (AR) arrived on the scene.
Apple (ARKit) and Google (ARCore) are facilitating this change by embedding AR technology into their respective smartphones to allow developers -- and by extension, retailers and marketers -- to create incredible AR experiences. In fact, Digital Bridge shows that 74% of consumers now expect retailers to offer some type of AR experience. AR is set to reconnect physical and digital retail.
This includes building deeper messages via AR in all in-store signage, having AR hosts that direct consumers to specific departments within a store, co-branded augmented products with shelf-talker callouts and instant coupon delivery based on AR actuation.
As far as applications go, Overstock.com updated its iOS app to allow users to view its products via augmented reality thanks to Apple's ARKit. (Full Disclosure: Overstock.com and AkzoNobel are VR/AR Association members.) This feature allows users to actually see what certain pieces of furniture might look like in their own homes or offices, much like the IKEA application. Thanks to AR, which uses visual search or image recognition, it's making it much easier for consumers to find exactly what they are looking for instead of doing traditional Google Searches. The technology also encourages customers to test the app out and pull the trigger on purchases. According to Amit Goyal, SVP of product and engineering at Overstock.com, the company has seen an increase in adoption and conversion. "The major win is the increased customer engagement in the app."
As every new technology, AR is primarily being used by the innovators and those who are ahead of the curve. But even struggling retailer Toys R Us, a company I used to work for, has tapped into the potential of AR to bring back fun and excitement into it stores and woo shoppers. Based on 2016 data, the vast majority of Toys R Us' revenue is still generated it its stores, so in-store experiences that drive foot traffic and are in line with customer expectations are essential. Although it's doubtful that Toys R Us' AR experiences will ever reach the popularity of something like Pokemon Go, the company made a smart move in creating several next-gen AR experiences for your smartphone and tablet that can be only activated in the store, making the landmark retailer a fun destination.
AkzoNobel, a Dutch company that creates paints, launched an AR app called the Visualizer, which has been downloaded 18 million times globally. The app is a great example of how AR technology can solve a specific use case. Choosing the right paint color for a room in your house can be stressful because it's hard to envision what the room will look like once it's completely painted. In order to help give you confidence in your color selection, the app allows users to see what a room could look like in a variety of different colors in real time -- all before any paint is applied to the wall.
AR solutions are not out-of-reach solutions in the retail space -- they are real, and consumers love them. In fact, 69% of customers expect to have access to AR apps from the stores they love to shop at over the next six months. The more users feel connected with the product in AR, the easier it is for them to purchase items and share fun content with friends and family online.
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NEW YORK — Augmented reality (AR) and virtual reality (VR) are already being used by retailers to enhance customer experience and those dealers that aren’t taking advantage of these nascent technologies yet should seriously consider jumping on the bandwagon, according to Cisco executives.
Some retailers don’t allow their store sales associates to use email or tablets, or even go online to check inventory, Amit Chetal, digital solutions lead at Cisco, said during an VR/AR panel discussion at the CE Week conference July 13. He classified that as a mistake. It’s important for retailers to instead “empower” their store associates by allowing them to make use of AR, VR and other technologies, and “get rid of that legacy thinking” that may be standing in the way of companies evolving and remaining competitive, he said.
By empowering store associates with all the new technological tools available, they will be able to better serve their customers and retailers will also be able to cut down on associate turnover, Chetal said. At the same time, “security is paramount” with whatever technologies companies decide to take advantage of, so that must be factored into their plans, he said.
It’s imperative for retailers to harness new digital technologies, even if they think that something like the mobile game “Pokemon Go” – which some retailers were able to capitalize on — will be just a short-term fad, Kathryn Howe, director of Retail Industry Digital Transformation-Americas at Cisco, said. It’s important for companies to “look at the disruption” to their businesses and not necessarily just “the disruptor,” she said. Retailers that were able to harness the popularity of “Pokemon Go” quickly did so because they “were ready” and “had security in place,” as well as Wi-Fi.
VR and AR represent the “fourth major computing platform,” following PCs, the Internet and mobile devices, Nathan Pettyjohn, founder of the VR/AR Association, said. He recommended that retailers “harness” these and other new technologies to their advantage because “it’s really easy to leverage what’s out there right now.” If they don’t do it now, he warned, “you’ll be left behind.”
Pettyjohn pointed to retailers including Lowe’s and Tommy Hilfiger that have already set up VR headset stations at their stores where consumers, in those two respective cases, can use the technology to see what a new kitchen will look like or feel like they’re at a fashion event where new clothes were unveiled.
Although Google Glass failed, “the technology is getting there” for more successful AR glasses and eventually there is “going to be a very elegant pair of glasses” that are probably, at least initially, going to be powered by our smartphones and that we “won’t look ridiculous” wearing, Pettyjohn said.
Store associates will be able to use those glasses to provide extra information about the products they are selling, he said. He also predicted we’ll “all have AR glasses on” in 5-10 years, and those glasses will “be able to detect millions of data points every second” as shoppers walk through stores, allowing them to receive product recommendations.
Tony Scherba, CEO and founder of San Francisco design and application development company Yeti, also urged retailers to “embrace change.” He stressed that this change “doesn’t have to be a dramatic change and can be a “step-by-step process.”
VR was also touched on later in the day at the conference, during a session called “Get in the eSports Game,” where executives at Intel, distributor/wholesaler Ingram Micro and computer maker Micro-Star International (MSI) focused on the soaring popularity of eSports, but also pointed to the increasing popularity of VR.
“ESports has exceeded every projection” and “continues to grow,” Barry Heller, client platform specialist at Intel, said, noting that his company continues to heavily invest in eSports. In addition to sponsoring eSports competitions, Intel is “continually coming out with new technologies to really take advantage in this space,” he said, pointing to his company’s powerful new processors.
He predicted that “we’ll start to see a tipping point maybe within the next five to 10 years,” in which everybody knows about eSports and the competitors become household names. “It truly is a worldwide phenomenon” that is popular among males and females, he said.
Half a billion viewers will be watching eSports competitions live within the next three years, he predicted. Intel is also investing in VR, he said, predicting that technology will be a major factor in the gaming space as well.
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You probably heard this year Alibaba topped $18B in sales in one day during the world’s biggest shopping day on its Tmall ecommerce platform. In comparison, combined Black Friday and Cyber Monday sales in the US in 2015 were about $14B, and that’s across all retailers.
This year on Tmall, brands & retailers got to experiment with new commerce concepts, such as VR. Shoppers got to experience shopping at Macy’s and other virtual stores and were able to discover and engage with items as if they were in the real store, including purchase by way of controlling their gaze. Alibaba integrated with Alipay to allow customers to check out with Buy+ within the VR environment.
VRARA member VRCommerce, has built a VR ecommerce platform that integrates with the retailer's existing product catalogs. “We’ve created a seamless path for retailers to begin to experiment in VR and create incredibly immersive transformative retail experiences,” says VRCommerce CEO, Amol Sharma. The video clip showcases a few of the early virtual storefronts. The user experience and UX can be completely tailored to reflect a brand and the experience desired. Example #1 shows an experience that could be inside an Apple, Samsung, AT&T or Verizon stores. Example #2 shows an interactive 360 experience inside a furniture store. Example #3 shows VR shopping inside a store like Macy's or Target.
In October, Alibaba started selling 150,000 cardboard VR headsets for 1 yuan (about $0.15). This enabled 8M shoppers to try out VR shopping experiences with brands like Costco, Macy’s, Procter & Gamble, and Target. Other brands, including Target, CostCo, and Tokyo Otaku Mode, are also doing virtual shopping experiences with Alibaba.
Alibaba claims this gives consumers a chance to more deeply engage with the product, to understand it better, and to do it in a famous’ store environment, saying, “it is a new tool to move the relationship with their consumers beyond a highly transactional one where speed and efficiency count most, and allow the brand to create stronger bond" (Mike Evans, Alibaba’s President).
In offline B&M retail, Alibaba created a Pokémon-Go-like augmented reality mobile game — “Catch The Tmall Cat” — to drive traffic to the offline stores of partner retailers like Starbucks and Suning and increase sales; players could “capture” discount codes to use in stores.
Come meet VRARA, VRCommerce, and other VRARA members at the NRF Retail Show in NYC in Jan. More info here.
As we discussed recently, one of AR's killer apps is going to be local discovery. Geotagged data will drive AR's graphical overlays for things like nearby sales, retail layouts, events, restaurant openings and friends' social status updates.
During a recent BIA/Kelsey podcast, an analyst roundable batted around these scenerios and what they could mean for consumers, local media companies and startups in the VR and AR sectors. This will continue to be a big topic: As we've said, AR will come later but be bigger.
See the video roundtable below, set to play at the right point, and stay tuned for lots more commentary on this topic. That includes our San Francisco event next month.
I had the opportunity to present to an audience at LSA 16 this week, discussing how VR and AR is being used by retailers and brands. During the presentation I demonstrated three augmented reality solutions, followed by a summary of existing executions within the retail and brand market. There are many more implementations in market than I was able to cover, but the below post provides a taste of this fast growing segment of VR and AR.
Both augmented reality – which can be described as overlaying hyper-local digital content on the real world through a mobile device or headset, and virtual reality – which can be described as full immersion into a stereoscopic, 3D, 360 degree environment with a VR headset, are showing strong signs of being able to drive local commerce. Here are three examples video demos that will spark your imagination on what's possible.
3D Animated Cat in AR:
This first example is quite amazing, and was developed by Google. As you see, a 3D, animated augmented reality cat is navigating his way around real world obstacles. He walks in front of you as you move. He jumps on chairs, on tables, then back to the floor. And as you get close to him with the device, he paws at the screen. As you see this, you start to imagine that this cat, could be anything, or any-one, you want it to be. If I wanted to follow Taylor Swift for example, along her shopping path through Bloomingdales, I could! The technology exists today. In this demo, you can see that this new prototype device, powered by Google's Project Tango technology has depth sensing, and 3D mesh point cloud technology that’s processing data in real time. And even better, it’s coming to mass market this summer, when Lenovo is launching a Tango powered Android phone.
3D Augmented Reality Furniture Placement:
This next demo was created by Elementals, a company based in Singapore, which allows you to place furniture in a real world environment, change the color, move the furniture around, and essentially, get comfortable with how it will look in your own home.
In-Store Navigation in Augmented Reality
This next demo is a device screen capture taken inside a Best Buy store. Augmented Reality allows a user to experience in-store navigation, and discovery, like never before. By creating a 3D map of the store with a Project Tango device, we are then able to overlay contextual data about what products are where, and add rewards and discovery mechanisms that allow for a really unique experience you can only get in-store.
These three examples are augmented reality, which is inherently location-based. In that, the device needs to know where I am, within centimeters of accuracy. It also has the potential for influencing purchase behavior in a local capacity.
There are many different approaches to how both AR and VR are influencing retail purchase intent, and brand building.
AR and VR strategies for retailers and brands typically fall into 1 of 4 categories:
- Pre-planning a shopping trip - using augmented reality or virtual reality to allow for a more informed purchase, and therefore, as shoppers go-in-store, they convert into buyers at higher levels
- Marketing - brands are creating an emotional attachment to a brand or product through VR - driving a shopper to a buying experience.
- Enterprise store planning - using VR to allow merchandisers and shopper marketing teams to experience new designs, and test with shoppers before building out an entire new store layout.
- In-Store Engagement - navigating the store with augmented reality, getting product information in-store using AR, and creating rewards and game based incentives for visiting certain areas of the store.
9 more examples of existing AR and VR deployments fueling local commerce:
Sephora- testing augmented reality videos that play at strategic places in-store when using your mobile app, creating digital and physical engagement while educating shoppers so they make confident purchase decision.
Bud Light - using VR to take you to Bud Light branded parties and concerts. You feel like you're in another place, and it's being brought to you buy Bud Light.
Lowe's - working with Elementals based in Singapore on furniture and appliance placement in your home through augmented reality. They’re also working with Marxent for VR experiences in-store.
- Tommy Hilfiger – let’s you go in-store, and experience being at their latest runway show in VR.
- Walgreens and Best Buy - working with Aisle411, based in St. Louis, on in-store augmented reality navigation
- Dacor - working with Pair based in Washington, DC to showcase their appliances in AR
- Prizmiq - based in Seattle is building the largest 3D models of products for use in VR and AR.
- Incontext - based in Chicago, is creating Virtual reality stores and shelves to plan store layouts more efficiently.