Augmented Reality + Virtual Reality Shopping, the Savior of the Department Store or its Death Knell?

With the advent of e-Commerce, mobile devices, the Hololens, and Oculus, large department stores are becoming a dying business model (See Sports Authority and Barnes & Noble). When the world is just a click away at the comfort of your own home, it's easy to surmise how eCommerce will erode away on brick-n-mortar retail.

However, retail stores still have one key advantage that e-Commerce doesn't, "instant redemption" - being able to try on clothes without the hassle of returning them to sender provides a level of instant gratification, that consumer's value the most.  This is a crucial factor for shoppers. In Ripen's e-Commerce survey of 1,235 American shoppers, 30.8% highlighted seeing and feeling the item in person as their primary factor for not shopping online. 29.9% of shoppers cited instant gratification as the cause for buying at brick-n-mortar.

With increasing emergence of augmented and virtual reality technology, it's easy to envision how the big box retail store could be reduced to rooms featuring augmented reality mirrors.

This new technology could consolidate the buying pattern - instead of hunting and gathering for outfits, shoppers would stand in front of a virtual mirror and scroll through the seasonal inventory for the latest styles and fashions projected onto the customer's reflection.

Once the user made their selections, they can try the actual clothing on and complete the purchase. This satisfies the customer's need for tactile feel for the fabric before the purchase is made.

 Timberland's Augmented Reality "Magic Mirror" Campaign.

Timberland's Augmented Reality "Magic Mirror" Campaign.

Augmented reality mirrors was first implemented by Timberland, when they created the Magic Mirror Augmented Reality campaign over two years ago. During the 2015 CES Convention in Las Vegas, Toshiba released the Virtual Fitting Room, where you create an avatar of yourself to model outfits. The customer can then survey their social network for second opinions before making the purchase on their mobile device.

Concepts like the Virtual Fitting Room is taking the next leap for virtual e-commerce, but still fails to satiate the customer's need for instant gratification and trustworthy payment platforms, this remains the major pain point for e-Commerce retail.

 Ripen's e-Commerce survey of 1,235 American Shoppers on their preference of offline purchases over e-commerce

Ripen's e-Commerce survey of 1,235 American Shoppers on their preference of offline purchases over e-commerce

For augmented or virtual reality shopping to exceed gimmickry and truly shift the shopping experience, the more trustworthy retail store must merge with the convenience of eCommerce models, combining its already inherent advantages of securer payments and instant gratification with the expedience, convenience, instant price comparisons and bottomless inventories of eCommerce.

Department stores already have e-Commerce storefronts (Macy's and Nordstrom's), but suffer major pain points in fitting, shipping, and rigid return policies. All of these issues can be resolved through augmented reality technology. Furthermore, it's less likely that traditional department stores would make such a radical shift with their proven business model.  After all, they still own 92% of retail commerce.

It's more feasible that one of the larger, more technologically adept e-Commerce players like, Amazon, Microsoft, Google, or Facebook would be more suited to revolutionize the retail department store experience with augmented or virtual reality. With Google's whiff on Google Glass, the emergence of Microsoft's HoloLens, and Facebook's mass market launch of Oculus Rift, the e-commerce retail market is primed for this next big innovation.

However, until instant gratification is resolved, e-Commerce will still remain second fiddle to traditional department stores. Realizing this, Amadeus consulting has developed the technology that will close this gap and innovate the e-Commerce/department store retailer space in the future.


David Baur-Ray,

Digital Marketing Director

 

Commentary Response Questions:

Could/would you make purchase decisions solely off your phone, without any sort of tactile measurement, whatsoever? How conceivable is this future for you?

Sources:

Stock Images by , Adobe Stock Photos

Graph by Ripen e-CommerceAgency-http://www.ripenecommerce.com/blog/ecommerce_survey

Research article on Risk and Convenience and Internet Shopping Behavior - https://www.researchgate.net/profile/Sanjog_Misra/publication/220420287_On_risk_convenience_and_Internet_shopping_behavior/links/0c9605293fe02049cb000000.pdf

Rethinking Retail by Futurist Speaker, Thomas Frey - http://www.futuristspeaker.com/business-trends/rethinking-retail-and-18-examples-of-change/

Toshiba's Virtual Fitting Room - https://www.youtube.com/watch?v=GNoqlVzbLgY

Timberland's Magic Mirror - https://www.youtube.com/watch?v=gz5ynrfJSDM

The Problem with Google Glass and Everything Else You Missed - http://gizmodo.com/the-problem-with-google-glass-and-everything-else-you-1692021376

Oculus Rift's Price, Launch and Date - http://fortune.com/2016/01/06/oculus-rift-price-launch-date/

Microsoft Hololens - https://www.microsoft.com/microsoft-hololens/en-us