Augmented Reality (AR) and Virtual Reality (VR) have been gaining traction in the retail landscape, increasingly attracting marketing spend. According to Digi-Capital, by 2021 the AR and VR market will reach $108 billion in revenue, bringing in $83 billion and $25 billion respectively. Within that market, as IDC predicts it, retail will become the No. 1 industry for AR/VR spending.
They are both two points of the same spectrum and aim to add similar value in retail, providing personalized and engaging experiences. While AR consists in overlaying digital content upon the real world, enriching it with interactivity, VR immerses users into an alternate reality, completely disconnected from the actual world.
Comparing the differences: Virtual Reality vs. Augmented Reality
Both technologies are meant to solve consumer problems and extend the brand’s connection to the customer through product visualization, customer experiences, and brand differentiation ‒ the most common use cases in retail.
The rise of such kind of technologies comes hand in hand with the surge of experiential retail and retailtainment. Consumers have developed an appetite for interactive shopping experiences that empower them to make better decisions faster, which is the focus AR and VR. They place entertainment at the centre of the offering, prioritizing engagement and building lasting relationships with consumers.
This is particularly relevant amongst Gen Z users (13-17 years old). Research from Sonar revealed that:
- 80% of them are more likely to visit a store that offers entertainment
- 80% are more likely to visit stores offering AR and VR technologies
- 79% are more likely to visit stores that offer interactive experiences to customize products
However, even though they might seem similar technologies, the experiences they provide differ greatly. This means brands and retailers must carefully evaluate their needs and objectives when deciding which one to adopt.
Here’s a comparison we put together to help you understand some of the main differences between AR and VR in retail:
The case for VR
Virtual Reality is seeing a slower growth due to the fact that it requires a viewing device to enjoy the experience. Therefore, it is not immediately accessible to all customers. Headsets can range from cheap options like Google Cardboard, to specialist devices such as Samsung Gear or Oculus Rift.
Because of the challenges and cost of special immersive content, VR experiences typically require a bigger investment. They are also primarily used in brick-and-mortar stores, exhibitions and showrooms, since they cannot be easily taken out of the store (yet). A costly alternative can be mailing special viewer devices to customers, like Porsche did to promote their virtual driving experience.
Many brands, including Tommy Hilfiger, Topshop or Dior, have used it to create immersive campaigns that transport the user to a different reality through 360-degree videos. Whether they take the user to the front-row or a runway show or on an adventure to a different world, such experiences forge an emotional connection between brand and consumer.
TOMS shoes came up with a “Virtual Giving Trip” that took people on a journey to Peru to experience what it’s like to give a pair of shoes to children in need.
This kind of immersion successfully made shoppers connect with the brand’s values - in this case, the core message that is “giving and receiving”. Yet, consumers had to own a VR headset or visit the store physically in order to experience it. This is why up until today, Virtual Reality has been mainly used in marketing campaigns and in-store events rather than integrated into cross-channel sales.
Alibaba is leading the revolution in VR eCommerce and erasing the line between entertainment and retail with their Buy + app. It is integrated with Alipay, so shoppers can make a payment with just a nod, without having to remove the headset.
However, this is still a very young application of VR, and the benefits and practicality for the consumer are yet to be realized.
The case for AR
Mobile Augmented Reality has found a place in shopping thanks to the widespread usage of smartphones. In a mobile-first society, everyone can adopt these experiences in their shopping habits, whether it is at home, in-store or outdoors, adding practicality and utility to the overall experience. Because it merges the physical with the digital world, it can be easily integrated in retail channels, connecting online and offline assets.
The stand-out benefit of AR is product visualization, which many retailers are already capitalizing on, letting customers see how a piece of furniture would look in a certain space or virtually try apparel on.
The online marketplace Apollo Box allows users to browse and interact with virtual 3D products in their real environment and see how they fit before purchasing. In just a few months since integrating AR tech, conversion rates boosted by 25% and time spent on the app grew by 10 minutes compared to customers not using the AR feature.
This tech lets consumers virtually customize product features and view or try them on in real time. Plus, it can also let you access additional content and product information. AR manuals, instance, are a good example of utility.
Hyundai’s “virtual guide” app uses Image Recognition to trigger interactive experiences in AR, including information about key components, 50 guides and 82 how-to videos.
You can find out more about how to use AR in retail and learn from real-world examples by downloading our free whitepaper “Augmented Reality for Retailers”.
Coming to a conclusion: Virtual Reality vs Augmented Reality
When it comes to making the decision to integrate either tech, brands and retailers should assess several things, like:
- How much are you willing to spend?
- Is it going to be a one-off campaign or an additional interactive path-to-purchase?
- Will it only be available in-store or will the customer be able to experience it anywhere?
Essentially it comes down to a case of emotional engagement versus helping facilitate an actual shopping decision.
Virtual Reality is the most immersive experience available. By detaching itself from the real world, it lets brands create experiences that can even break the laws of physics, allowing for captivating and memorable campaigns. Yet, the technology is still quite raw when it comes to retail use cases and has higher barriers to entry.
Augmented Reality, on the other hand, is a more mature technology. It adds value to the shopping experience by allowing customers to make better informed decisions in an engaging and interactive way that can be easily integrated in an omnichannel strategy.
How are you going to delight your customers? Download our guide to find more ways to enhance the whole shopping experience and face retail challenges with technology.