The Arrival of Virtual Reality

Once again, tech gadgets were at the top of the list when it came to holiday gifts last year.  While the Apple Watch dominated the 2015 holiday period wish lists, 2016 marked the year of virtual reality headsets.  And 2017 is shaping up to be the year that virtual reality becomes affordable and available to the masses rather than just the gaming elite, with the recent launches of a range of more affordable VR gadgets as smartphones become capable of virtual displays.

As access to this shiny new electronic world is now within reach of a wider audience, businesses are getting smart and looking for ways to capitalize on this sales opportunity.  While much of the virtual reality media coverage to date has been from an entertainment perspective, trade sectors like retail are already taking a wider view, looking for opportunities to commoditize virtual worlds with virtual store shelves and 3D product views.

Alibaba, China’s ecommerce behemoth, is ahead of the game.  Its financial division recently demonstrated a payment service that works hand in hand with virtual reality shopping.  Anticipated to be launched by the end of this year, VR Pay, as the service is called, will allow virtual reality shoppers to browse through virtual reality shops and malls and pay for items just by nodding their head.  There’s no need to remove the headset and reach for their cards.  Shopping identity will be able to be verified through authenticated account logins on connected devices with passwords, or using voice identification technology designed to recognize unique voice patterns of a person.

As you can see, virtual reality is no longer the stuff of 90s sci-fi movies. These technologies can provide real opportunities to bring visual representations of goods more in line with their physical reality, which is a big benefit for mail order and e-commerce companies. For example, at its most basic level, a customer can wear his 3D glasses and simply walk around a mannequin in an online store.  He can inspect a garment in detail, from all sides.

However, that’s just the beginning.  For instance, if a customer is refurbishing her home and can‘t quite picture how a new armchair will look in her living room, she could simply upload a photo of the room.  The rendered environment could then select the right colors and virtually add the new furniture to the room.  Voila!  Instant knowledge of how the chair will look in the room, helping to encourage a purchase if she is satisfied, or additional shopping to find the perfect choice if not.

Virtual applications like these open up new possibilities for online purchases, but also present new challenges at the checkout: entering billing and delivery addresses is far from smooth sailing in a virtual space and media disruptions are to be expected.  Straightforward navigation and easy shopping also call for simplified payment processes. The integration of one-click checkouts seems perfectly suited to the virtual shopping experience. Payment with wallets such as Amazon Payments, MasterPass or PayPal Express is intended to enable payment with one-click, which includes importing billing and delivery addresses.

This is why one-click buttons are becoming more and more widespread.  By positioning them in the shopping cart or even at item level, innovative payment methods are hoping to appear on the screen as early as possible in the payment process and stay one step ahead of other payment options.  At the same time, the customer benefits as the payment process becomes easier for them.  By clicking once on Amazon Payments, MasterPass or PayPal Express, customers avoid the laborious process of entering large amounts of data since their address and preferred payment method, including card number, are already stored there.  Shopping in a virtual environment where the push of a button or the nod of a head will suffice for authorization is simply the next step.

This might seem like a giant leap for industry and consumers; however, many of the more innovative retailers have long been seeking opportunities for digital enhancement.  Many already bridge the gap between the physical store and e-commerce.  It’s not uncommon these days to walk into a store and have the option of ordering items they do not have in-store via tablet on the shop floor.  With no waiting in long lines at an order desk or the registers, this can be done at the customer’s leisure.  I don’t believe it will be long before we see this variant of online shopping offered in the changing room itself.   The customer will be able to use their virtual reality headset to view a 3D representation of a freshly ironed summer collection, while the slightly crumpled, genuine article lies limply next to them on floor.

Multichannel as a virtual shopping and payment experience can work, as long as the processes are cleverly coordinated.  They need to be straightforward, frictionless and secure for customers and retailers alike.  Merchants need to make the investment in devices and apps for virtual rooms that provide security through tokenization and encryption. Real world card payments require secure payment handling with P2PE (point-to-point encryption) certified POS terminals, which have been developed to meet today‘s data security requirements even on mobile devices like tablets and smartphones.

Whether you’re a fan of virtual reality or not, what’s clear is that virtual reality is by no means simply the stuff of movies.  It will become a new sales channel. Businesses, and the payments ecosystem supporting them, must transform in order to offer safe and easy-to-use virtual shopping experiences for customers.

As Brian Shuster, one of the initial pioneers of the Internet, recently said, “VR is arriving, and VR will not remain in the virtual realm for very long. Very soon, the difference between what is real and what is virtual will be a question whose answer will solely depend on your philosophical outlook; but in the real world, virtual reality will become more real than reality ever was.”

Ralf Gladis is the co-founder and CEO of Computop, Inc.

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