We can’t deny that shopping has expanded a lot with the advent of technology. We can shop in the comfort of our home from a continent away with a click of a mouse. But can it go a step further? Can shoppers actually get to “try out” different types of merchandise without even entering a store? We firmly believe that they can if they use immersive technology.
Immersive technology has often been implied in business. For example, the gaming industry welcomed VR and AR devices with open arms. As a result, both new and old games are being adapted to the new tech. In addition, industries like healthcare, engineering, and architecture are already researching ways to use AR/VR headsets and software. With that in mind, using immersive tech in retail can’t be that far behind.
Where and How Can Retail Utilize Immersive Technology?
Many different retail businesses have already begun to use immersive technology. For instance, Lowe’s has what is called a “Holoroom” at six of its stores in the US. Shoppers can enter these rooms and put on the nearby Oculus device. Once they’re in these rooms, they can design a kitchen or a bathroom themselves. In terms of how this experience benefits the shoppers and retailers, they can both agree on a future product. The customer gets the kitchen or bathroom they want, and the retailers earn money. Naturally, people can use immersive technology to design other rooms.
Another retailer that tested these digital waters was Volvo. With the help of Microsoft, they began working on the HoloLens. This device would allow the user to design and configure their own dream car.
Finally, there’s clothing retail. Customers who want to buy a dress or a pair of pants could “try” them on without actually being in the store. They’d simply power up the AR/VR set and see how the clothes look on them.
Retail Immersive Technology Users
The global market is enormous and it keeps growing. Right now, according to Internet Retailer, there are approximately 1 billion buyers that shop online. That’s one-sixth of the entire world population.
In terms of the e-commerce software market itself, right now it sits on a decent $3 billion in revenue. Of course, this market only covers specific types of software. For example, it covers software used for web page design, online presentations, and smart apps.
With immersive technology, we expect that market to change drastically. For example, a VR headset might lead the store owners to stop using in-store displays such as mannequins. There’s even a possibility of eliminating the concept of a physical store altogether. That way, the already sizable home improvement ($160 billion) and clothing and apparel markets ($260 billion) would earn even more just by saving on not having a store.
Potential Revenue with Retail Immersive Technology
Based on our conservative estimates, by the year 2025, AR/VR retail can reach revenue of $1.6 billion. However, we do have to take a few things into account.
First off, each AR/VR retail unit would cost around $5.000. Next, we have to think about the users themselves. For example, we can assume that each user makes at least one transaction a year. Furthermore, only about 5% of online shoppers will use VR devices to buy what they need. Then we have to think about returns. We can use Demandware as our example here. Demandware is a VR retail software company. It gets up to 2% from each individual sale if the shopper uses their service. Something like that can be possible with other AR/VR sales.
These numbers might sound high for average shoppers. But we can be reasonably sure that retail immersive technology actually saves money in the long run. For instance, remodeling a kitchen has an average cost of $19.000. Similarly, the average cost of a new car is $34.000. Immersive tech saves us both time and money by letting us inspect the product in a digital 3D environment first.