Chris Hutchins's avatar

Chris Hutchins

December 13, 2016

Localized VR Shopping Experiences: The Future of Retail?


Retailers are leveraging Virtual Reality in innovative, resonant ways. Translated VR experiences may be the next frontier for global e-commerce.

Chris Hutchins's avatar

Chris Hutchins

December 13, 2016

We’ll soon live in a world where you’ll be able to stride into a department store, try on as many clothes as you like, never have to worry about the store having your size in stock, accessorize to your heart’s content, and make your purchase without ever pulling out your credit card—and all without ever leaving your living room.

Such virtual shopping experiences are on the horizon, thanks to ever-increasing investments in Virtual Reality (VR) platforms. Unlike innovative Augmented Reality (AR) retail technologies—in which product information is presented in real-time on a device screen, a la the wildly popular Pokémon Go game on your child’s smartphone—VR delivers a far more immersive experience through VR headsets. These experiences place consumers in convincing virtual settings.

Immersive VR-powered video games and short films are scoring all the press coverage these days, but other industries have been eying this new frontier of entertainment for years, and are now developing groundbreaking retail experiences that are dazzling and delighting—and driving buying behavior—for consumers around the world.

2016: The Year of VR

We're in the nascent days of this technology, but 2016 represented a meaningful leap forward for consumer VR. The "big three" VR platforms-Facebook-owned Oculus Rift, HTC Vive and PlayStation VR-launched this year with robust marketing pushes, which delivered high visibility in particular consumer verticals.

Of the bunch, the PlayStation VR platform offers the lowest financial barrier of entry: $399 US for the VR headset, and another $299 for a PlayStation 4 console to power it. The Oculus and HTC headset products are comparatively far pricier, and must be connected to more expensive, high-powered PCs to properly work. (To be fair, these costlier platforms deliver experiences with higher fidelity than the PlayStation product.)

These systems are finding their ways into brick-and-mortar stores, along with ambitious “demo stations” to showcase their capabilities. More than 700 Best Buy retail stores now have areas dedicated to the technology, and have provided over 300,000 demos so far this year. Sony, the manufacturer of the PlayStation VR, claims to have presented another 300,000 demos to consumers, as well.

Smartphone-based VR experiences, which have the greatest adoption rates due to their low cost, have grown exponentially in popularity over the past year.

Early Days, Intense Interest

Beyond in-home use, the future of VR is bright, if a bit hazy. In January, a Goldman Sachs report presented several compelling insights about the VR/AR space. For instance: at least $3.5 billion in venture capital investments were made in VR/AR during 2014 and 2015. Real estate companies like Sotheby’s are leveraging VR to showcase luxury homes, which could disrupt commissions by as much as $52 billion.

Further, the report estimated that VR/AR retail would be worth $1.6 billion by 2025, with at least 33 million users. Other key industries, such as real estate, healthcare and engineering, would be worth $2.6 billion, $5.1 billion and $4.7 billion, respectively.

That's powerful growth for a technology still in its earliest days of adoption. VR and AR "have the potential to become the next big computing platform," Goldman Sachs analysts wrote, "and as we saw with the PC and smartphone, we expect new markets to be created and existing markets to be disrupted." The development of this technology may "be as game-changing as the advent of the PC," they reported.

Consumer interest in VR shopping applications is certainly high. An Ericsson ConsumerLab report indicated that consumers are keen to see products in real sizes and forms when shopping online—something immersive VR experiences can deliver quite easily.

A recent Nielsen survey of 8,000 consumers revealed that a whopping 25% of the U.S. adult population (aged 18 to 54) will use or buy VR technology in the next year. These consumers are a retailer’s dream come true: they consume content from five more television networks than the average consumer, they spend 8% more time watching television and they spend 7% more time online.

They also adopt new products and services more quickly than average, are often brand advocates, and are willing to spend more on products than their peers.

VR’s Viability

If you follow trends in this space, you know that industry leaders are already exploring this cutting-edge frontier. These days, you can design your next kitchen using an IKEA VR experience. A handful of Lowe’s stores feature VR “Holorooms” to help customers visualize their home-improvement projects. Last year, a South Korean North Face retail location offered customers a dogsled VR experience set in the arctic, with a fast-paced real-life twist.

Even car manufacturers are launching VR experiences that put shoppers in the driver’s seat—and empower them to try out performance and interior packages—without ever climbing into a car.

The opportunity is particularly compelling for retailers, and not just brick-and-mortar businesses. Last month, the Chinese e-commerce conglomerate Alibaba showcased an ultra-ambitious VR shopping experience for its mainland China customers called Buy+. Rather than requiring consumers to use one of the pricey VR headsets, Buy+ needs only a smartphone and cardboard headset to function. (Alibaba customers can purchase a headset for about 15 cents.)

In Buy+, customers navigate aisles of virtual stores. (These stores are represented by 360° footage of real-life retail stores.) Shoppers can examine products from different angles, and even request "virtual models" to don apparel and accessories, and showcase them on a catwalk. Naturally, the platform supports the ability to purchase these products in real-time.

Some Western business reporters have called the shopping experience “lonely and surreal,” but a mere week after its debut, more than 8 million shoppers had tried Buy+. That number has surely grown considerably since mid-November.

The platform has buy-in from major U.S. retailers such as Macy’s, Target and Costco; their virtual stores are available to explore via the Buy+ platform. Retailers from Australia and Japan are also participating. Some of these companies don’t yet have a brick-and-mortar presence in the market, but will ship to mainland China addresses.

Alibaba isn’t the only Chinese e-commerce giant using VR in its engagement efforts. Alibaba rival JD.com debuted its VR shopping strategy in September.

According to Alibaba, such VR shopping experiences are most popular among young, tech-fluent audiences. Over three-fourths of Buy+ users are 36 years old or younger, the company says.

Challenges and Costs

VR's trek into mainstream shopping experiences hasn't been all unicorns and rainbows, though. Developing VR content, and supporting it in digital and physical channels, presents challenges and costs.

Indeed, as The Wall Street Journal reported last month, “VR is brand new as a consumer technology, and a challenging one at that. It imposes discomforting physical demands on users. And demonstrating the systems in retail stores requires extra resources and personnel.”

As another publication put it, the current cost of crafting a 3D VR-ready product for Alibaba’s Buy+ platform hovers at around $50. (Processes can involve rending VR products from product photos, or working from manufacturer’s CAD files.) That approach can add up quickly.

However, as processes are refined and development tools and technologies drop in price, per-product costs could drop to about $1, Alibaba says.

Endless Possibilities

These growing pains will likely pass in upcoming years, though experts insist first movers can reap PR and marketing windfalls in the short term. MotionPoint’s own Blas Giffuni, director of our Global Growth team, conceives a bright future for the medium—particularly for its out-of-home applications in e-commerce.

"Testing a product in an immersive environment before buying suddenly becomes a viable reality for e-commerce," he explains. "One of the major factors for e-commerce conversion is uncertainty: 'Is it going to fit perfectly? Is it going to look good on me?' VR could help solve some of these problems. It can also deliver insights into more real-life scenarios, such as testing a golf club product on a PGA tour golf course, or driving a vehicle in sunny conditions."

Such compelling content might also generate lifts in digital conversion rates. It’s not hard to imagine how authentic, immersive experiences might drive typical e-commerce conversion rates of 2% to 3% to something approaching the more robust brick-and-mortar store rates of between 20% and 40%.

"VR may also be able to close a strategic gap between a retailer's brick-and-mortar and e-commerce teams," Blas suggests. "Developers can leverage e-commerce conversion techniques into brick-and-mortar locations. Think about being able to do A/B tests or multivariate testing on store layouts, merchandising and promotions. Brands can generate immediate results, while reducing risk of failure due to a limited sample size, or limited persona-based data."

VR’s Future Is Global

Indeed, highly-personalized shopping experiences can become a reality for e-commerce, Blas says. Depending on a customer's geo-location, preferred language, documented shopping behavior and other metrics, VR experiences can deliver highly relevant product offerings in highly persuasive, immersive, culturally-appropriate environments.

And preferred languages and authentic cultural references will definitely-and quickly-become a key success factor for these VR shopping experiences. To move the needle in global markets (and in multilingual domestic demographics, such as Spanish-speaking U.S. Hispanic communities), VR-based commerce must be available in locally-preferred languages, and must offer locally-preferred products.

MotionPoint and its longtime translation partner have extensive experience translating database-driven content found on websites and mobile sites, in smartphone apps and multimedia experiences, and in computer software. While we haven't yet translated a VR experience for our customers, our methodology and industry-leading technologies make such localizations straightforward and efficient.

Theoretically, content from robust VR experiences-be they text- or audio-based-can be exported into industry-standard file formats, which MotionPoint's solution can parse, assign for translation, and then reassemble into a deliverable for implementation. This content can be regularly updated, to reflect current offerings in the VR experience.

And if a brand’s VR experience theoretically uses product information that’s identical to what’s found on its translated website, MotionPoint can leverage existing translations in clever tech-driven ways to drive down costs.

We recently called our solution “future-proof,” and with good reason. Our platform is omnivorous, capable of accommodating content from disparate systems available now and in the future. It doesn’t integrate with other technologies’ internal processes. And it can handle the translation of all kinds of media—from websites to PDFs to smartphone apps and beyond.

Is your company eying the bright frontiers of tech-driven retail experiences? Does it need an equally visionary partner to ensure its content is available and understandable in global markets? Contact us to learn more about our flexible, future-proof solution.

 

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