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The Future of Retail Customer Experience

While virtual reality immerses the consumer in a simulated world, and augmented reality overlays virtual elements in the real world; both technologies have the potential to revolutionize the retail industry. Many brands are looking to leverage the technologies’ immersive power to create new customer experiences. However, while there is consensus regarding the potential of these technologies, no brand truly understands how to harness them. They are never truly integrated in the customer experience, but rather simply added on. Thus, potentially becoming useless technology gimmicks that will slowly disappear, similar to the fate of 3D televisions.

Outside the retail industry however, researchers utilize virtual reality in a myriad of different ways to simulate environments and study behavioural patterns. For instance, Hershfield et al. (2011) studied the change in individuals’ saving patterns using virtual reality. When shown an age-rendered image of themselves, individuals identified with their future self and chose to postpone monetary rewards for a more comfortable retirement, therefore indicating that emotional connections can be created through virtual reality.

In the retail industry, even though many publications follow Marc Andreessen’s prediction of the death of physical retail (Rigby 2014), brick and mortar retail remains the primary way shoppers make purchases, as online purchases only account for 8.1% of all retail sales (U.S. Department of Commerce 2016). Although seemingly more convenient, online shopping is still not capable of replacing the shopping experience and customer engagement that physical stores offer.

How can brands leverage the convenience of digital shopping, the immersive experience of virtual reality, the fun of augmented reality, and the social appeal of brick and mortar shopping to create an experiential space that drives emotions? The answer is a hybrid reality that integrates them all into one, allowing customers to physically step into a world where possibilities are endless and interactions approach magical realism. Furthermore, brands will obtain better insight into consumer behaviours and buying patterns as digitized experiences offer significantly more data capture opportunities.

L’Oréal Paris is taking steps towards hybrid reality through their “Makeup Genius” application where it gives users the opportunity to virtually try makeup products and then either be directed to a store or have the products delivered directly to them. Not only did L’Oréal Paris use facial recognition and augmented reality to create a user experience that is attracting media attention, they also integrated the technologies into the shopping experience by allowing users to create profiles, make purchases, and save their favorite combinations (L'Oréal Paris 2016).

Another company that is moving towards hybrid reality is Uniqlo. They have set up “Magic Mirrors” in their San Francisco location that allow users to try on different colors of an item with the swipe of a finger. These mirrors remove some of the pain points present in the brick and mortar shopping experience through the use of augmented reality and body recognition. It also further encourages customers to come to the store where true emotional connections are possible as all five senses can be engaged. After all, a truly immersive experience should appeal to all these senses (Holition Augmented Retail 2016).

Although L’Oréal Paris and Uniqlo have still not maximized the potential of hybrid reality, they are among the pioneers that are integrating virtual, augmented, and physical experiences in their customers’ journeys. Thus, they are engaging all their customers’ senses and turning their stores into an experience that bridges both the real and the virtual worlds. Finally, although virtual and augmented reality campaigns can be flashy and attractive, customer experience designers must make sure that if the technologies are used, they must be integrated into the customer journey and add value to the holistic experience to not result in useless promotional gimmicks.

References

U.S. Department of Commerce (2016), “Quarterly Retail E-Commerce Sales,” U.S. Census Bureau News. 

Hal E. Hershfield, Daniel G. Goldstein, William F. Sharpe, Jesse Fox, Leo Yeykelis, Laura L. Carstensen, Jeremy N. Bailenson (2011), “Increasing Saving Behavior Through Age-Progressed Renderings of the Future Self,” Journal of Marketing Research, 48 (November), S23-S37.

Holition Augmented Retail (2016), “Portfolio:Uniqlo.”

L'Oréal Paris, (2016), “Makeup Genius.”

Rigby, Darrell K. (2014), “E-Commerce Is Not Eating Retail,” Harvard Business Review.


This post was originally published at ama.org. Ali Chaudhry, Britt Evers, Lauren Jaffré, Ravi Krishna Sripada, and Marc-Andre Lewis are students in Markus Giesler’s Customer Experience Design MBA elective course.